Turbo Timmy told AIG to hide facts from public

[Master Shake]

Jan. 7 (Bloomberg) -- 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’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

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.

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 “backdoor bailout” of financial firms.

“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” President Barack Obama selected Geithner as Treasury secretary, a post he took last year.

http://www.bloomberg.com/apps/news?p...d=aXIvW4igKV38

[Raz]

Re: Turbo Timmy told AIG to hide facts from public

My, my... that nose of his seems to only get longer and longer.:mad:




We can only hope that "He who sees no Bubbles" is also invited to the party. :mad::mad::mad:

[aaron]

Re: Turbo Timmy told AIG to hide facts from public

Time to make Tim a scapegoat. Fire him, and the peeps (including me) will be happy for a few weeks. He could be replaced with that guy from AIG with a ton of experience in collecting money from the masses and funneling it to the oligarchy. Some skills cannot be taught, they must be learned. We need a guy with more experience!

[sunskyfan]

Re: Turbo Timmy told AIG to hide facts from public

I agree and the man is Paul Volker. We need somebody who knows the FED and how it is USED and who is not in bed with Wall Street. This is a fight for the sovereignty of the United States. Perhaps the battle should start between the Treasury and the FED.

[Mega]

Re: Turbo Timmy told AIG to hide facts from public

Bloomberg has "guests" on & they are sticking it to "Timmy".....I think a "Run" might very well be on the cards!

Mike

[Raz]

Re: Turbo Timmy told AIG to hide facts from public

I agree and the man is Paul Volker. We need somebody who knows the FED and how it is USED and who is not in bed with Wall Street. This is a fight for the sovereignty of the United States. Perhaps the battle should start between the Treasury and the FED.

How right you are.

Until this Kleptocracy is overthrown the Left-Right sqabble only serves to enable these scum.
Too bad Volker is in his mid-80s; he's a true public servant.

Where are you William McChesney Martin? Your nation cries out for help!





Martin, a Democrat, was not considered a doctrinaire economist, however. Overall, he pursued flexible, non-partisan policies and believed in a degree of accommodation while maintaining the Federal Reserve's independent status within government. His cooperation at congressional hearings, skill in conciliation and negotiation, thorough knowledge of central banking, and total integrity won him respect, even from such critics as Representative Wright Patman (Democrat) of Texas, a constant foe of "tight money."

Martin earned the confidence of presidents and financiers. Eisenhower, with Senate approval, renamed him chairman in 1955 and to a full four year term in 1956. He was again named chairman in 1959, 1963, and 1967.

In December 1965, concerned over inflation from the booming economy and domestic and Vietnam War expenditures, Martin increased the discount (interest) rate and tightened the money supply against President Johnson's wishes. Despite their differences, Johnson reappointed him chairman because Martin was a symbol of sound public finance. His leadership reassured the financial community here and abroad.

Martin liked to use analogies to explain complex monetary policy. He often said, "Our purpose is to lean against the winds of deflation or inflation, whichever way they are blowing, but we do not make those winds," and "We are the people who take away the punch bowl just when the party is getting good."

[skidder]

Re: Turbo Timmy told AIG to hide facts from public

How right you are.

Until this Kleptocracy is overthrown the Left-Right sqabble only serves to enable these scum.
Too bad Volker is in his mid-80s; he's a true public servant.

Where are you William McChesney Martin? Your nation cries out for help!





Martin, a Democrat, was not considered a doctrinaire economist, however. Overall, he pursued flexible, non-partisan policies and believed in a degree of accommodation while maintaining the Federal Reserve's independent status within government. His cooperation at congressional hearings, skill in conciliation and negotiation, thorough knowledge of central banking, and total integrity won him respect, even from such critics as Representative Wright Patman (Democrat) of Texas, a constant foe of "tight money."

Martin earned the confidence of presidents and financiers. Eisenhower, with Senate approval, renamed him chairman in 1955 and to a full four year term in 1956. He was again named chairman in 1959, 1963, and 1967.

In December 1965, concerned over inflation from the booming economy and domestic and Vietnam War expenditures, Martin increased the discount (interest) rate and tightened the money supply against President Johnson's wishes. Despite their differences, Johnson reappointed him chairman because Martin was a symbol of sound public finance. His leadership reassured the financial community here and abroad.

Martin liked to use analogies to explain complex monetary policy. He often said, "Our purpose is to lean against the winds of deflation or inflation, whichever way they are blowing, but we do not make those winds," and "We are the people who take away the punch bowl just when the party is getting good."

Some would argue that Martin was one of the 1st Fed Governors to implement an international scheme to artificially bolster confidence in the dollar while increasing dollar supply. I'm not sure that dovetails with the idea that he was draining punchbowls?

http://emsnews.wordpress.com/2009/01...change-report/

[Raz]

Re: Turbo Timmy told AIG to hide facts from public

Some would argue that Martin was one of the 1st Fed Governors to implement an international scheme to artificially bolster confidence in the dollar while increasing dollar supply. I'm not sure that dovetails with the idea that he was draining punchbowls?

http://emsnews.wordpress.com/2009/01...change-report/

And some would argue that Martin was the best Central Banker (now that's possibly an oxymoron!) the United States ever had.
He was doubtless a man of integrity and gave up the likelyhood of attaining great wealth in order to serve our country.

He was operating under Bretton Woods, meaning that all other currencies were either pegged to the Dollar, or "floated" against it if their fiscal policies and/or political stability became suspect. Other CBs could manipulate currency markets and that had to be taken into account by the Fed. I certainly don't think Martin was colluding to weaken the Dollar - he had Congress and LBJ to do that for him!

There was real debate in the Late-1950s as to whether there was a Dollar Shortage.




Seems to me that based upon the (1) inflation statistics during his terms (1951-70) and (2) the anger he generated among the "easy money" crowd within his own Democratic Party, he did an outstanding job.

[skidder]

Re: Turbo Timmy told AIG to hide facts from public

And some would argue that Martin was the best Central Banker (now that's possibly an oxymoron!) the United States ever had.
He was doubtless a man of integrity and gave up the likelyhood of attaining great wealth in order to serve our country.

He was operating under Bretton Woods, meaning that all other currencies were either pegged to the Dollar, or "floated" against it if their fiscal policies and/or political stability became suspect. Other CBs could manipulate currency markets and that had to be taken into account by the Fed. I certainly don't think Martin was colluding to weaken the Dollar - he had Congress and LBJ to do that for him!

There was real debate in the Late-1950s as to whether there was a Dollar Shortage.




Seems to me that based upon the (1) inflation statistics during his terms (1951-70) and (2) the anger he generated among the "easy money" crowd within his own Democratic Party, he did an outstanding job.

Wasn't Bernanke recently on the cover of time?

Nonetheless, it certainly isn't for me to argue Martin's greatness or not. I can barely understand the fundamentals of that 3 card monte game they call Central Banking.
If you took the time to go to the report that was recently uncovered from circa 1961, you would see that the thrust of the memorandum appeared to be that of manipulation of currencies. Now, perhaps that is in the purview of central banking, maybe it's the whole point of their existence, I don't know. I was merely pointing out that more was happening behind the scenes than what was generally known at the time about his policies and that perhaps he wasn't conforming to your idea of what is in the history books.

[Rajiv]

Re: Turbo Timmy told AIG to hide facts from public

Eliot Spitzer on this matter - Tip of the Iceberg

In a December New York Times op-ed, we called for the full public release of AIG email messages, internal accounting documents and financial models generated in the last decade. Today, a Bloomberg story revealed that under Timothy Geithner’s leadership, the Federal Reserve Bank of New York told AIG to withhold details from the public about its payments to banks during the crisis. This information was discovered when emails between the company and the Fed were requested by representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The emails requested by Issa span five months beginning in November 2008. If five months of emails reveal information key to our understanding of the aftermath of the crisis, imagine what 10 years of emails could contribute to our understanding of its causes. We believe the AIG emails and other internal company documents are the ‘black box’ of the financial crisis. If we understand the failure of AIG, we will more fully understand the crisis - what caused it and more importantly how to prevent it from happening again.


The emails today detail the efforts of the Fed to suppress the disclosure of payments made to banks such as Goldman, Sachs Group for reimbursement of their credit-default swap exposure. When the Treasury Department stepped in, AIG had at least $440 billion in credit-default swaps outstanding. The Fed, led by Tim Geithner, paid Goldman, Sachs Group and other banks 100 cents on the dollar for these instruments rather than negotiating a lower rate closer to the actual value, (estimated by some to have been as little as 20 cents). In testimony to the Congressional Oversight Panel, Tim Geithner insisted it was necessary to make these payments in full, arguing that even a small downward negotiation would prove catastrophic to the financial sector. Elizabeth Warren, head of the oversight panel has repeatedly challenged repeatedly this assertion.
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[Raz]

Re: Turbo Timmy told AIG to hide facts from public

Wasn't Bernanke recently on the cover of time?

Yes, but it was the BANNER I was refering to, not Martin being on the cover. The banner read: "IS THERE ENOUGH MONEY? The Flow & Control of Credit"

Nonetheless, it certainly isn't for me to argue Martin's greatness or not. I can barely understand the fundamentals of that 3 card monte game they call Central Banking.
If you took the time to go to the report that was recently uncovered from circa 1961, you would see that the thrust of the memorandum appeared to be that of manipulation of currencies. Now, perhaps that is in the purview of central banking, maybe it's the whole point of their existence, I don't know. I was merely pointing out that more was happening behind the scenes than what was generally known at the time about his policies and that perhaps he wasn't conforming to your idea of what is in the history books.

Thanks for linking to the document, skidder.

I did take the time to go to the report, but I only had time to read about a third of it. I tried to get the guts of the message, I think that I did, but perhaps I should have read it all. I certainly didn't get any idea that it suggested weakening the Dollar but rather trying to maintain strength in the Dollar while facing the all too familliar fact of a Congress that loves to spend money.

Chairman Martin hated inflation with a passion because he saw that it defrauded working people and seemed to benefit the wealthier segments of society which owned large amounts of real estate and were also in a position to invest and speculate toward capital gains.
He was a Democrat who acted upon his principles - unlike today's phony "champions of the working man": Chris Dodd, Tim Geithner, Larry Summers.

[skidder]

Re: Turbo Timmy told AIG to hide facts from public

Yes, but it was the BANNER I was refering to, not Martin being on the cover. The banner read: "IS THERE ENOUGH MONEY? The Flow & Control of Credit"



Thanks for linking to the document, skidder.

I did take the time to go to the report, but I only had time to read about a third of it. I tried to get the guts of the message, I think that I did, but perhaps I should have read it all. I certainly didn't get any idea that it suggested weakening the Dollar but rather trying to maintain strength in the Dollar while facing the all too familliar fact of a Congress that loves to spend money.

Chairman Martin hated inflation with a passion because he saw that it defrauded working people and seemed to benefit the wealthier segments of society which owned large amounts of real estate and were also in a position to invest and speculate toward capital gains.
He was a Democrat who acted upon his principles - unlike today's phony "champions of the working man": Chris Dodd, Tim Geithner, Larry Summers.

Hey Raz, I think you did get the general gist of it so perhaps it's just a misunderstanding of mine as opposed to yours.
Here's my take on it. This document is evidence of the "original sin" if you will. That is the cover up of the dollar debasement by manipulating gold and foreign currencys.
In other words, it is a "strong dollar" policy but uses "slight of hand" techniques instead of what is actually a strong dollar policy in the age of a gold standard (that of only issuing dollars at the same rate of growth as that of the gold backing it, as I understand it).
This is the same strategy that the Clinton/Rubin team used in the 1990's, assuming that this strategy even lapsed in the prior years.
I can see a Fed Governor whose deeply held beliefs were contrary to what he was forced to do by the actions of the current administration at the time. I can't speak to any of that and have no reason to doubt your assessment of the man other than to bring up that long lost document.
My current belief is that every market is now manipulated under the guise of national security and is done vis-a-vie "dark pools", derivatives and programmed trading by the TBTF banks the US gov't has been shoveling money into hand over fist. Obviously this view is a parroting of the views of analysts I have read and not a view I came to via my personal research.
This document is about as close as I expect to come to reading a verified copy of actual Fed policy that speaks directly to one aspect of the manipulations we are witnessing today. All IMO, of course.

[Raz]

Re: Turbo Timmy told AIG to hide facts from public

...My current belief is that every market is now manipulated under the guise of national security and is done vis-a-vie "dark pools", derivatives and programmed trading by the TBTF banks the US gov't has been shoveling money into hand over fist. Obviously this view is a parroting of the views of analysts I have read and not a view I came to via my personal research. ... This document is about as close as I expect to come to reading a verified copy of actual Fed policy that speaks directly to one aspect of the manipulations we are witnessing today. All IMO, of course.

Si credo est mi credo.;)

We are living in a Kleptocracy and the only way out that I can see is a political revolution - a Third Party.
Otherwise it will continue until a complete collapse of the system. Probably within a decade or less.

[Verrocchio]

Re: Turbo Timmy told AIG to hide facts from public

Geithner has to go. Fine. He would be followed by scores of other thieves -- if... If Obama had the stones, if the government was for the people, etc.

[raja]

Re: Turbo Timmy told AIG to hide facts from public

Si credo est mi credo.;)

We are living in a Kleptocracy and the only way out that I can see is a political revolution - a Third Party.
Otherwise it will continue until a complete collapse of the system. Probably within a decade or less.

I went in my small local bank the other day to find out about getting a fixed rate RE mortgage (hoping to profit off future high interest rates). I started chatting with the loan officer as he sat behind his big desk with the Main Street, picture window view. I was shocked to hear that he expects a full-blown armed revolution by the populace of the US. That's right . . . blood in the streets. :eek: His view of Politicians was that they are basically subhuman, and so are the Financial Elite. :eek: :eek: I agree with the later, but it was surprising to hear HIM say it!

I suggested to him that Voting Out the Incumbents and Boycotting Big Banks might be a first step toward a more peaceful but effective resolution. I also told him about the Congressional Reform Act that's floating around the web.