Quantcast
Feeds: Email, RSS & Twitter

Get Our Videos By Email

 

8,300 Unique Visitors In The Past Day

 

Powered by Squarespace

 

Search The Archive Of 15,000 Videos

SEARCH THE DAILY BAIL

 

 

Hank Paulson Is A Criminal - Pass It On

"The Federal Reserve Is A Ponzi Scheme"


Get Our Videos By Email

THE FED UNDER FIRE: Must See Clip

Bernanke's Replacement: Happy Hour In Santa Cruz

Must See: National Debt Road Trip

"Of Course We're Not Going To  Payback the Chinese."

Dave Chappelle On White Collar Crime

Carlin: Wall Street Owns Washington

SLIDESHOW - Genius Signs From Irish IMF Protest

SLIDESHOW - Airport Security Cartoons - TSA

Most Recent Comments
Cartoons & Photos
SEARCH
« Taleb Says He Wouldn't Shake Geithner's Hand, Calls Bernanke "A True Charlatan," Blames Nobel Prize For Rewarding Bad Economists | Main | MUST SEE CHART: Sesame Street's Elmo Explains The National Debt »
Friday
Oct012010

Joe Kernen: "We Will Never Think About AIG Without Thinking About The Counterparties (Goldman Sachs) Who got 100 Cents On The Dollar" (NEW VIDEO)

From yesterday's Squawk Box -- runs just 2 minutes.  Joe Kernen on-air attempting to describe the Goldman Sachs vampire squid wrapped around the face of humanity.  You'll see it in the clip.

  • Joe Kernen with Andrew Ross Sorkin
  • "...Geithner of course worked at Goldman..."

Mary Thompson reports on her off-camera interview with AIG CEO Robert Benmosche.  Start watching at the 2:15 mark for comments from Joe.

 

More detail:

---

Dr. Pitchfork here.  What is all this stuff I keep reading about an "Exit Plan"? How, pray tell, does digging in deeper constitute an "exit plan"? What the headline of these AIG stories should read is "AIG Goes Bankrupt -- AGAIN." Because that's what just happened. Impossible-to-pay-down debt is getting converted into equity. And we're the lucky chumps with the equity.

This part I also found amusing:

  • "AIG said it will draw down as much as $22 billion from the Treasury’s Troubled Asset Relief Program, or TARP. The insurer will use that money to purchase $22 billion of the New York Fed’s stakes in the SPVs. AIG will then hand over these SPV interests to the Treasury. "

It's unclear if this is additional TARP money or not, but still, it's using taxpayer money to pay back the the govt. -- in this case the NY Fed.

Yet, the Treasury was never getting paid dividends on its original stake in AIG -- the preferred shares it is now converting into common.  Do we ever get that unpaid money, or did we just toss those lost payments into the good will basket?

Ah, here be my answer (from the WSJ and re-posted on the Bail):

  • "Yet, nearly two years after its near-collapse, AIG has yet to pay any cash dividends to the Treasury on the $49 billion of public money it still has invested in the company.... [T]he government believed AIG would struggle to find the cash to pay the 10% dividend rate on its preferred shares. That is why, in April 2009, the Treasury swapped $40 billion of AIG preferred shares for new, more lenient preferreds. Unlike the first set, which left the company on the hook for any unpaid dividends into the future, the new preferreds don't."

The govt., and Democrats in particular, want to call this a success story.  But I don't think the public is buying it.

 

 

---

Screenshot

From yesterday's Squawk Box -- runs just 2 minutes.  Joe Kernen on-air attempting to describe the Goldman Sachs vampire squid wrapped around the face of humanity.  You'll see it in the clip.  Watch this one.

 

 

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (9)

What is all this bullshit about an "Exit Plan"? How, pray tell, does digging in deeper constitute an "exit plan"? What the headline of these stories should read is "AIG Goes Bankrupt -- AGAIN." Because that's what just happened. Impossible-to-pay-down debt is getting converted into equity. And we're the lucky chumps with the equity.

This part I also found amusing:
"AIG said it will draw down as much as $22 billion from the Treasury’s Troubled Asset Relief Program, or TARP. The insurer will use that money to purchase $22 billion of the New York Fed’s stakes in the SPVs. AIG will then hand over these SPV interests to the Treasury. "

It's unclear if this is additional TARP money or not, but still, it's using govt (taxpayer) money to pay back the govt. -- in this case the NY Fed.

The fun with AIG just doesn't stop.
Oct 1, 2010 at 4:17 PM | Registered CommenterDr. Pitchfork
BTW, we were never getting paid back on the preferreds anyway, isn't that right? Do we ever get that money, or did we just toss those lost payments into the good will basket?
Oct 1, 2010 at 4:24 PM | Registered CommenterDr. Pitchfork
Here be my answer (from the WSJ posted on the Bail):

"Yet, nearly two years after its near-collapse, AIG has yet to pay any cash dividends to the Treasury on the $49 billion of public money it still has invested in the company.
...
the government believed AIG would struggle to find the cash to pay the 10% dividend rate on its preferred shares. That is why, in April 2009, the Treasury swapped $40 billion of AIG preferred shares for new, more lenient preferreds. Unlike the first set, which left the company on the hook for any unpaid dividends into the future, the new preferreds don't."
http://dailybail.com/home/where-are-the-aig-dividends-the-federal-reserve-is-getting-p.html

Thanks, Tim! Can I have another, please?
Oct 1, 2010 at 4:27 PM | Registered CommenterDr. Pitchfork
pitch...can you add your comments to the end of the story...below the links...above the screenshot...thanks...
Oct 1, 2010 at 4:49 PM | Registered CommenterDailyBail
TARP, the Forbidden Bipartisan Success

http://www.theatlantic.com/politics/archive/2010/09/tarp-the-forbidden-bipartisan-success/63803/

More crap from clueless journalists...
Oct 1, 2010 at 6:20 PM | Registered CommenterDailyBail
"It will cost taxpayers a fraction of that $700 billion, and may end up costing them nothing at all."

I stopped reading here, pissed at myself for reading that much.

I'm telling you, this we-paid-back-TARP bullshit accounts for 50% of the banks' marketing budgets. That's why I hammer on it the most, to the point of publicly ridiculing unwitting bank apologists.

We-had-to-have-bailouts-or-would've-been-eaten-by-lions is the biggest mental cancer in the U.S. that I have ever encountered. If we don't kill this fucker, it is GAME OVER for the good old U.S. of A. Which it may be anyway.
Oct 1, 2010 at 8:43 PM | Unregistered CommenterCheyenne
A fraction? How about ONE HALF?

$386B of the TARP has actually been disbursed. 187B has not been paid back. That's about half in my book (Pitchfork don't do decimals).

In other words, if you're looking for a talking point, it's that HALF of the TARP money lent out has never been paid back. We can play this game just as well as they can.
Oct 1, 2010 at 9:08 PM | Registered CommenterDr. Pitchfork
Good point Dr. P, don't give these fuckers an inch. And yet TARP talk ignores the Fed's bailouts, which are fucking endless. PPIP, TALF, MMCLCLMNOPQ--not to mention the doughnut window, wherein the banks get a guaranteed income stream and the right to bilk Americans at 29.9%.

On that note, and concerning TARP, I've found that most people understand the Fed's reach-around as a resonant explanation for how bankrupt companies purport to "pay back" Treasury on TARP. It makes for good narrative, too, what with the Fed showing up as a villain evil enough to sneak its name onto top center of your cash and you didn't even know it.
Oct 1, 2010 at 10:38 PM | Unregistered CommenterCheyenne

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.