Reply #46: At least $52 billion was channelled by the NY Fed through Maiden Lane to big foreign banks,

[leveymg]

Goldman, BoA, and Citi, which also happened to be the Primary Dealers in the bonds markets. (See post #29) So, to recap, after Geithner allowed "fails" of Primary Dealers in the secondary markets to destroy the major U.S. market makers (Lehman), he oversaw the bailout competing Primary Dealers by funneling $52 billion through Maiden Lane (AIG) to compensate their losing positions in toxic assets. See, http://en.wikipedia.org/wiki/Maiden_Lane_Transactions

Maiden Lane II LLC is a limited liability company created when American International Group Inc. (AIG) was taken over by the U.S. government in September 2008. Since AIG's subsidiaries hold a great many residential mortgage-backed securities that are very risky, Maiden Lane II LLC was formed to purchase these RMBS. On December 12, 2008, the Federal Reserve Bank of New York began extending credit to Maiden Lane II LLC. A June 30, 2010 update to the Federal Reserve balance sheet reported the fair market value of net portfolio holdings were valued at $16,172 million.<3>

A news story dated March 16, 2009,<8> stated Maiden Lane II used billions in bailout money to purchase toxic assets, and that AIG used billions to pay other banks, including foreign banks- France's Societe Generale at $11.9 billion, Germany's Deutsche Bank at $11.8 billion, and Britain's Barclays PLC at $8.5 billion. AIG, through this fund also funneled significant bailout money to U.S. banks that had already been bailed out themselves under the Troubled Asset Relief Program. As AIG counterparties, Goldman Sachs got $12.9 billion, Bank of America got $5.2 billion, and Citigroup got $2.3 billion all at 100% on the dollar.

The March 16, 2009 article was critical of AIG's plan to pay in excess of $170 million as bonuses to AIG employees.

Instead of regulating the Primary Dealers, Tim Geithner let them run the markets into ruin in Q3 2008, and then selectively bailed them out for their losses. Tim was a real hero - man of the hour on the Street in Q1 2009, if you were Goldman, BoA, Citi, or one of the other surviving Primary Dealers, most of which are large, foreign banks. Now, that's what I call a return on investment.