{"id":3151,"date":"2010-01-07T15:19:31","date_gmt":"2010-01-07T20:19:31","guid":{"rendered":"http:\/\/www.jasetaro.com\/blog\/?p=3151"},"modified":"2010-01-07T15:19:31","modified_gmt":"2010-01-07T20:19:31","slug":"bloomberg-geithners-fed-told-aig-to-limit-swaps-disclosure","status":"publish","type":"post","link":"https:\/\/www.jasetaro.com\/blog\/2010\/01\/07\/bloomberg-geithners-fed-told-aig-to-limit-swaps-disclosure\/","title":{"rendered":"Bloomberg: Geithner’s Fed Told AIG to Limit Swaps Disclosure"},"content":{"rendered":"

In a sane world Tim Geithner’s tax troubles would have kept him from being confirmed as Treasury Secretary. Unfortunately, we don’t live sane and those tax troubles pale in comparison to what we’re learning<\/a> about the Geithner led Federal Reserve Bank of New York’s role in the AIG bailout:<\/p>\n

The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer\u2019s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.<\/p>\n

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.<\/p>\n

The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a \u201cbackdoor bailout\u201d of financial firms.<\/p>\n

\u201cIt appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,\u201d said Issa, a California Republican. Taxpayers \u201cdeserve full and complete disclosure under our nation\u2019s securities laws, not the withholding of politically inconvenient information.\u201d President Barack Obama selected Geithner as Treasury secretary, a post he took last year.<\/p><\/blockquote>\n

One would think, given these revelations, that Secretary Geithner would be cleaning out his desk now, but this administration’s commitment to transparency, and honest government I wouldn’t hold my breath…As Jim Geraghty notes<\/a>:<\/p>\n

AIG’s liquidity crisis hits in September 2008. The Federal Reserve comes in to rescue them with a credit line of $85 billion, and the big, powerful banks received full cash for their credit-default swaps. But because that aspect of the rescue would be a giant p.r. headache, suggesting that the taxpayer was stepping in to make sure Goldman Sachs and the others didn’t lose anything in their deal, Geithner and his team chose to simply not disclose it to the public.<\/p><\/blockquote>\n

Bottom line Congressional Democrats and the media have invested a fair amount of time in demonizing AIG and its management and criticizing their bonuses. What we’re slowly learning though is that the problem wasn’t AIG, it was the sneaky and underhanded way that\u00a0 Geithner and the Federal Reserve Bank of New York decided to cover their tracks by using AIG as a money-laundering device to bailout politically-connected private institutions.<\/p>\n","protected":false},"excerpt":{"rendered":"

In a sane world Tim Geithner’s tax troubles would have kept him from being confirmed as Treasury Secretary. Unfortunately, we don’t live sane and those tax troubles pale in comparison to what we’re learning about the Geithner led Federal Reserve Bank of New York’s role in the AIG bailout: The Federal Reserve Bank of New […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[616,7],"tags":[128,166,953,506,177],"class_list":{"0":"post-3151","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-culture-of-corruption","7":"category-politics","8":"tag-aig","9":"tag-bailout","10":"tag-federal-reserve-bank-of-new-york","11":"tag-tim-geithner","12":"tag-treasury-department","13":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pfpI7-OP","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":3011,"url":"https:\/\/www.jasetaro.com\/blog\/2009\/11\/19\/wsj-geithner-under-fire-amid-frustration-on-economy\/","url_meta":{"origin":3151,"position":0},"title":"WSJ: Geithner Under Fire Amid Frustration on Economy","author":"Jeff","date":"November 19, 2009","format":false,"excerpt":"Normally I'd say the calls for Treasury Secretary Tim Geithner's resignation were just hot air but given the recent disclosures about his role in AIG bailout while President of the New York Federal Reserve Bank, I suspect this is more than just normal political blustering: Snowballing frustration about the economy\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1622,"url":"https:\/\/www.jasetaro.com\/blog\/2009\/03\/06\/sydney-morning-herald-geithners-incompetent\/","url_meta":{"origin":3151,"position":1},"title":"Sydney Morning Herald: Geithner’s Incompetent","author":"Jeff","date":"March 6, 2009","format":false,"excerpt":"I wrote earlier that I believe the Obama Administration's wanton destruction of our economy was the result of simple inexperience or incompetence rather than malice. Tomorrow's Sydney Morning Herald seems to support that conclusion: When Barack Obama announced his champion to rescue the world from economic ruin, it was the\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1800,"url":"https:\/\/www.jasetaro.com\/blog\/2009\/03\/25\/idiot-geithner-speaks-dollar-sinks\/","url_meta":{"origin":3151,"position":2},"title":"Idiot: Geithner Speaks, Dollar Sinks","author":"Jeff","date":"March 25, 2009","format":false,"excerpt":"In remarks before Council on Foreign Relations today Treasury Secretary Tim Geithner said the U.S. is open to an SDR linked currency... Geithner later clarified his remarks by saying that \"the dollar remains the world's dominant reserve currency\" and that that is likely to continue for some time, but the\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2300,"url":"https:\/\/www.jasetaro.com\/blog\/2009\/06\/03\/were-healthy-banks-forced-forced-to-surrender-ownership-stakes-to-government\/","url_meta":{"origin":3151,"position":3},"title":"Were Healthy Banks Forced Forced to Surrender Ownership Stakes to Government?","author":"Jeff","date":"June 3, 2009","format":false,"excerpt":"Were Healthy Banks Forced Forced to Surrender Ownership Stakes to Government? It's question that needs to be answered... From reading this CNSNews.com piece it would seem at least a few \"healthy\" banks were forced into surrendering ownership stakes to the government: Last October, then-Treasury Secretary Henry Paulson ordered nine banks\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1785,"url":"https:\/\/www.jasetaro.com\/blog\/2009\/03\/24\/obama-administration-seeks-broad-power-to-seize-firms\/","url_meta":{"origin":3151,"position":4},"title":"Obama Administration Seeks Broad Power to Seize Firms","author":"Jeff","date":"March 24, 2009","format":false,"excerpt":"This is rather frightening, the Obama administration is not only seeking broad power to regulate risk on Wall Street, they're also seeking the broad power to seize companies that the Treasury Department thinks may represent a risk to our economy if they fail: Treasury Secretary Timothy F. Geithner is set\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1828,"url":"https:\/\/www.jasetaro.com\/blog\/2009\/03\/27\/john-shadegg-geithner-needs-to-explain-shift\/","url_meta":{"origin":3151,"position":5},"title":"John Shadegg: Geithner Needs to Explain Shift","author":"Jeff","date":"March 27, 2009","format":false,"excerpt":"Congressman John Shadegg (R-AZ) wants to know why Treasure Secretary Tim Geithner isn't facing tough questions over his apparent change in positions on China\u2019s request to abandon the dollar as the global currency: (CNSNews.com) \u2013 An Arizona congressman wants to know why Treasury Secretary Timothy Geithner isn\u2019t facing tough questions\u2026","rel":"","context":"In "Education"","block_context":{"text":"Education","link":"https:\/\/www.jasetaro.com\/blog\/category\/education\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/posts\/3151","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/comments?post=3151"}],"version-history":[{"count":0,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/posts\/3151\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/media?parent=3151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/categories?post=3151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/tags?post=3151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}