Elizabeth Warren on AIG

[Thailandnotes]

Today in the Post...

http://www.washingtonpost.com/opinio...y.html?hpid=z2

[lektrode]

Re: Elizabeth Warren on AIG

yeah, this is an interesting one...

http://www.washingtonpost.com/opinio...y.html?hpid=z2

(TARP) was heavily scrutinized in the media and passionately debated on Wall Street and Main Street. Congress created a bipartisan committee — on which we served — to oversee the funds distributed through TARP. The committee conducted dozens of public hearings and produced 30 oversight reports. Compare that experience with a recent event. AIG, a massive insurance company that received $182 billion in TARP and Federal Reserve bailouts during the financial crisis, reported in February that it had earned $19.8 billion in the fourth quarter of 2011. Its profits increased a staggering $17.7 billion — from a loss of $2.2 billion a year earlier — because of special tax breaks from the Treasury Department.

i guess boy wonder timmy is really coming thru for 'the team', eh?

Yet there was no congressional debate, no front-page story, no special oversight committee. What happened?

well sure - wouldnt wanna drag this one back up now = getting too close to november....

By any reasonable definition, the company changed ownership: A controlling stake passed from its stockholders to the federal government. As such, AIG should have been limited in rolling over past losses. Beginning in 2008, however, the U.S. Treasury jumped in with a special ruling that the financial rescue did not constitute a change in ownership. AIG was thus permitted to preserve its pre-bailout losses on its books, and now the company is using those losses to show enormous profits and dodge the taxes it owes on the billions it is earning today.

This is wrong. At first glance, it may appear that the federal government comes out even because it owns AIG stock and benefits as a stakeholder. But the government owns only about 70 percent of the company, while the deal subsidizes all shareholders, including the private parties that own the remainder. Creditors also benefit because a more profitable company is less likely to default on its loans.

In addition, the special tax deal permits AIG executives to collect more. Chief executive Robert Benmosche owns millions of dollars in AIG stock options and receives an enormous direct benefit from this deal. This special tax deal also masks the true cost of TARP by increasing the value of the government’s AIG stock at the expense of future tax revenue.
The Congressional Budget Office estimated in December that even without the special break, taxpayers will lose $25 billion on AIG

SO WHERE ARE THE 'profits' ???
how in hell could AIG be ringing up billions in profits when they were bankrupted by their illegal counterparty risk trades with GS, et al, then bailed out to pay 100cents/dollar on stuff they had no right nor capital to offer in the first place - and now, while theres still 25billion outstanding they are allowed to show 'profits' while using the taxloss carryforward to pay no tax on this 'gain' ?

the truth really is stranger than fiction and only orwell could come up with this story line...

[Gnosis]

Re: Elizabeth Warren on AIG

the truth really is stranger than fiction and only orwell could come up with this story line...

He did..now we live it.
Kinda puts a "FIRE" in my belly. Yours too?

[lektrode]

Re: Elizabeth Warren on AIG

He did..now we live it.
Kinda puts a "FIRE" in my belly. Yours too?

uh huh - please pass the prilosec...

and here's another example, from chuck h smith:

http://www.oftwominds.com/blogmar12/...-grab3-12.html

Welcome to the United States of Orwell, Part 4: "Consumer Protection" Just Another Federal Reserve Power Grab (March 29, 2012)

How to mask yet another Federal Reserve power grab? Call it "consumer protection." This is truly Orwellian: the latest and greatest Executive Branch/Federal Reserve power grab is labeled "consumer protection." I am indebted to correspondent Jim S. who seems to be one of the few Americans to have actually sorted through this monstronsity and gleaned its true nature: an unprecedented extension of Executive (i.e. Imperial Presidency) and Federal Reserve power.
Let's start by recalling that the Federal Reserve is a consortium of private banks. Calling a private consortium of banks the "Federal Reserve" is the original Orwellian misdirection, for there is nothing "Federal" about the Federal Reserve. It is not a government agency.
Now guess who will fund and control this vast new bureaucracy of "consumer protection"? Yes, the private consortium known as the Federal Reserve. "The Consumer Financial Protection Bureau (CFPB) will be an independent unit located inside and funded by the United States Federal Reserve. It will write and enforce bank rules, conduct bank examinations, monitor and report on markets, as well as collect and track consumer complaints."
Since managing the money supply and interest rates is the ultimate "consumer protection," we can ask how well the Fed managed those tasks in the past 15 years: alas, their management has been catastrophic for the nation and the middle class, which has been gutted by their policies of serial bubble blowing, leveraged speculation and bank predation.
The very last private consortium any sane person would select to run a Consumer Financial Protection Bureau would be the privately owned parasites of the Federal Reserve. Doesn't the vast, sprawling bureaucracy of the Federal government already have agencies experienced in regulating consumer protection? Why do we "need" to consolidate all financial consumer data and regulation under the control of a non-government consortium that has amply proven itself to be the enabler and enforcer of institutionalized bank predation, embezzlement and fraud?
This is beyond bizarre. If we had to assign the task of protecting consumers to a privately owned consortium, then we'd be better off giving the task to IBM. But the bank-owned toadies in Congress handed all this power to the Federal Reserve. One wonders how it is legal that a private consortium now has power over all financial data in the U.S.
Here is Jim's summary:

You are more than familiar with the Shadow Banking System running parallel, black-box-like to the Federal Reserve System...no regulation, no accounting, notional hypothecation upon notional re-hypothecations accounting for leverages to the Moon, and in the end, essentially infinite debt. The CFPB represents to me a complete, contained Shadow US Government System established by the Dems and the Fed right under our very noses. One of the profound things I have not completely conveyed is what I see as the invisibility cloak and impenetrable shield the CFPB has for total immunity from evaluation, oversight, attack, etc.

The CFPB is funded by the FED with any amount of money it asks for and is completely unaccountable as to how it uses it...unlimited funding. The CFPB is answerable to no entity regarding its deliberations, decisions with the full force of law, disclosure of agendas.

lots more to this at: http://www.oftwominds.com/blogmar12/...-grab3-12.html

[Polish_Silver]

Re: Elizabeth Warren on AIG

I think Liz has blinders on. She's worried about collecting 35% off of 17 billion profits. Peanuts!
What about the estimated $7 trillion the deal is costing tax payer, and no concessions such as :

1) executive bonuses (and perhaps salary) clawed back since 2000 (start of housing bubble)
2) share holders and bond holders should have had 90% losses (thier companies were supposedly bankrupt!)
3) all middle and high executives kicked out , no compensation at all. (leadership should be punished for such malfeasance)

The justification for bailout was to protect depositors and preserve continuity in the payments system, not to enrich or
help wall street continue with business as usual. The bailout