Tuesday, January 26, 2010

"Thank you, sir, may I have another?"

Goldman Sachs Approached AIG To Scrap Contracts Months Before Being Paid In Full By NY Fed
Shahien Nasiripour
HuffPost Reporting
26 Jan 2010
Goldman Sachs approached AIG and expressed its willingness to cancel its insurance-like contracts with the troubled company three months before the Federal Reserve Bank of New York paid the bank in full, effectively funneling billions in taxpayer funds into Goldman's coffers, according to documents obtained by the Huffington Post.
Goldman Sachs, however, was willing to dump the swaps and simply keep those assets, rather than expecting to be paid in full via its insurance policies, according to slides from a Nov. 5, 2008, presentation for the New York Fed by asset manager BlackRock Inc.
But instead of bargaining with Goldman and AIG's other counterparties to resolve the billions of dollars in souring derivatives contracts, the regional Fed -- then led by current Treasury Secretary Timothy Geithner -- ended up paying 100 cents on the dollar for toxic assets -- "an amount far above their market value at the time," according to a scathing November 2009 report by the TARP watchdog, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

[emphasis added]
Got that? Before Geithner's NY Fed stepped in, Goldman Sachs was willing to eat its Credit Default Swaps with AIG. Then Geithner rode to the rescue - and paid Goldman 100 cents on the dollar for the "assets".
Tim Geithner is now Secretary of the Treasury???
Makes you feel all warm & fuzzy, doesn't it!

Please, Mr. Obama - your economic team is a disaster.
Start anew!... you know, "Change we can believe in!"

Stop the madness!

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