The Golden Truth: Why Are the Taxpayers Keeping AIG Alive?

Friday, February 26, 2010

Why Are the Taxpayers Keeping AIG Alive?

AIG posts $8.9 billion loss...NEW YORK (Reuters) - American International Group Inc (NYSE:AIG - News) reported a quarterly loss of $8.9 billion on Friday and warned that it may need additional U.S. government support, even as it tries to pay back taxpayers after a $182.3 billion bailout.

Here's the news release: LET AIG FAIL

The degree of corruption here involving Henry Paulson, Ben Bernanke, Tim Geithner, Larry Summers, Lloyd Blankfein and others smells worse than a broken sewage holding tank in New York City in the heat and humidity of August.

And here's an AIG spokesman spewing forth massive lies: "We think the combination of strategic asset sales and reviving businesses will generate sufficient funds to repay the taxpayer, mooting the need to pursue the previously contemplated life insurance securitization," AIG spokesman Mark Herr said.

Let me be clear about this: nearly every significant asset sale tee'd up by AIG has either failed or has fallen far short of the originally estimated sales value. AIG has NO HOPE of EVER repaying Taxpayer money used to keep AIG and Goldman Sachs, et al alive.

It's clear to me, and probably most people, that the decision to save AIG was based on the decision to indirectly bailout Goldman Sachs, and other Wall Street banks. Recall that the ex-CEO of GS was the Secretary of Treasury and the then-head of the NY Fed, Tim Geithner, is Robert Rubin's robot - Rubin being the former Co-Chairman of GS several years ago. Anyone doubt the motive?

It's also clear to me that AIG has NO hope whatsoever to pay back any of the $182 billion owed to the Government. The Government - aka Taxpayer - owns just under 80% of AIG. Please be aware that the % of ownership is not arbitrary. One reason for this is it allows the Government to not include AIG's liabilities as part of the Government's balance sheet, even though the Government is giving billions to AIG ever quarter.

And what to do we get in return? We get to watch AIG pay its employees billions in total compensation; we get to watch AIG funnel billions to Goldman Sachs and other big banks. Now it looks like AIG will be on the hook for billions in Greek debt-relatged Credit Default Swaps, with Goldman used as the underwriting conduit for this garbage. The media has done a great job of covering this up, but it's there.

When you open the paper tomorrow and read about the growing civil unrest in California over State education budget cuts, and you start reading about the massive teacher layoffs in your own State from budget cutbacks, keep in mind how much money Obama/Geithner/Bernanke is funnelling to Wall Street, in order to keep the big banks solvent and keep the fat bonus checks flowing.

4 comments:

JoeFriday, 26 February, 2010
AIG is a fiat eating derivative monster. If you fail to feed this beast, collapse will be hard and fast.

TPTB know this and will not let it happen until they are properly positioned themselves.

Joe M.
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Dave in DenverFriday, 26 February, 2010
Yup. My commentary was strictly rhetorical backed by real numbers and facts.

Joe, you see the protests in California over education cuts?

The system is getting ready to implode and I have gut feeling we'll see citizen protests spread:

http://www.chicagotribune.com/news/education/ct-met-chicago-school-cuts-20100225,0,5046378.story
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JoeFriday, 26 February, 2010
Dave,

The whole social contract is dissolving rapidly due to an economy in shambles.

Which reminds me of what Bill H. recently said in Midas, "The system has already collapsed, all we are waiting for now is acknowledgement by panic".

Joe M.
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Harvey GeeFriday, 26 February, 2010
If your company is not doing well, why did they pay back the loan? Oh right, freeing themselves from the pay restrictions for the bonuses they just paid out only to ask for another bail out.

If they're not smart enough to forecast all these losses let them go to hell for all I care. Goldman already got their greasy hands on the money so it doesn't matter if they fail now.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.