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The Real Winners From The AIG Bailout

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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 04:03 PM
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The Real Winners From The AIG Bailout
from Clusterstock

Right from the start we've been told that AIG had to be bailed out to stem the systemic risk that would be created by its failure. Supposedly, if AIG went down it would set off a domino like reaction through the financial system.

Strangely, however, the public has never been able to learn who the beneficiaries of the government's bailout of AIG. The company claims the information is private, and so far the government has been going along with that line. But this morning the Wall Street Journal has heroically identified dozens of US and foreign financial insitutions that have been paid $50 billion through the bailout of AIG.

Two of the biggest winners were Goldman Sachs and Deutsche Bank, who each received upwards of $6 billion from AIG after it was bailed out. Here is the list.

* Goldman Sachs
* Deutsche Bank
* Merrill Lynch
* Socit Gnrale
* Calyon
* Barclays
* Rabobank
* Danske
* Royal Bank of Scotland
* Banco Santander
* Morgan Stanley
* Wachovia
* Bank of America
* Lloyds Banking Group
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depakid Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 04:08 PM
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1. In other words- the institutions whose MBS's were "insured" by AIG's credit default swaps
Not really a surprise.
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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 04:13 PM
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2. Yes. IOW, the money is not being used as collateral.
Instead, it's lining the pockets of those who bet big against the American markets.
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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 04:52 PM
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3. Some commentary from Barry Ritholtz:
Yesterday, in Backdoor Bailouts for Goldman Sachs?, we noted that GS, as well as Morgan Stanley, Merrill Lynch, and Deutsche Bank, were all made whole on their bad bets with AIG.

Thats right, what was misleadingly described as systemic risk turned out to be in large part little more than a counter-party bailout money for the very same people who helped cause the problem.

Only the $25 billion figure I mentioned was off by 100% the WSJ is reporting this morning it was $50 billion dollars, almost a third of $173 billion total AIG loot:

The beneficiaries of the governments bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions that have been paid roughly $50 billion since the Federal Reserve first extended aid to the insurance giant.

Among those institutions are Goldman Sachs Group Inc. and Germanys Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Socit Gnrale SA.

More than a dozen firms with smaller exposures to AIG also received payouts, including Morgan Stanley, Royal Bank of Scotland Group PLC and HSBC Holdings PLC, according to the confidential document.

Now you know why the Fed was so reluctant to reveal who the coutnerparties were.

This is a giant FUCK YOU to the American taxpayer. Isnt there some Congressmen (besides Ron Paul) who are morally offended by the Paulson plan, which is slowly becoming the Geithner plan? Isnt there anything that can be done?
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mediaman007 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-07-09 05:39 PM
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4. Be careful, those banks have 401's, 403's and probably some major
Edited on Sat Mar-07-09 05:42 PM by mediaman007
pension plans that will dry up if they don't collect the money.

The correct move is to add some transparency, so the banks aren't taking a cut before the clients get their money back.

When you think about it, it's probably why the Republicans are staying away from this. They could give a shit if your union pension goes under.
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