Posts filed under “Legal”

iBanks Grabbed $50 Billion in AIG Bailout Cash

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.

That’s 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 government’s 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 Germany’s 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 Société Générale 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. Isn’t there some Congressmen (besides Ron Paul) who are morally offended by the Paulson plan, which is slowly becoming the Geithner plan?  Isn’t there anything that can be done?

According to the WSJ, these are the counter-party banks paid by AIG with bailout money:

Covered Counterparties
Goldman Sachs
Deutsche Bank
Merrill Lynch
Société Générale
Calyon
Barclays
Rabobank
Danske
HSBC
Royal Bank of Scotland
Banco Santander
Morgan Stanley
Wachovia
Bank of America
Lloyds Banking Group

This is simply unconscionable . . .

>

Previously:
Backdoor Bailouts for Goldman Sachs? (March 5, 2009)

http://www.ritholtz.com/blog/2009/03/backdoor-bailouts-for-goldman-sachs/

Solvent Insurer / Insolvent Insurer (March 4, 2009)

http://www.ritholtz.com/blog/2009/03/solvent-insurer-insolvent-insurer/

Top U.S., European Banks Got $50 Billion in AIG Aid
SERENA NG and CARRICK MOLLENK
WSJ, MARCH 7, 2009

http://online.wsj.com/article/SB123638394500958141.html

Category: Bailouts, Corporate Management, Finance, Legal, Markets, Politics, Really, really bad calls

Cramdown Implications

An interview with Paul Van Valkenburg of Mortgage Industry Advisory Corp. regarding the Mortgage “Cramdown” Legislation and what does it implies. (Bloomberg News)

Category: Credit, Legal, Real Estate, Video

Should Ratings Agencies Disgorge “AAA” Fees on Junk ?

A new Bloomberg column on the rating agencies: “Standard & Poor’s called for more regulation of credit-rating companies, recommending a global framework that would eliminate potential conflicts of interest, increase transparency and create an industry code of ethics. New rules should ensure ratings are independently derived and unbiased, the methodologies used are disclosed, and regulators…Read More

Category: Credit, Derivatives, Legal

Big Firm Conflict of Interest: The Penalty Box

Its fairly well known in the traditional retail investment world that the client and the advisor often have opposing, and sometimes contradictory, interests. I sometimes forget just how much so in my little world of boutique asset management (We charge about ~1%). A conversation with a couple of brokers from a large firm that I…Read More

Category: Investing, Legal, Markets

Interactive Bank Failure Map

Nice interactive map, via TheStreet.com: > > Source: Interactive Bank Failure Map Philip van Doorn TheStreet.com 02/17/09 – 11:20 AM EST http://www.thestreet.com/story/10464237/1/new-interactive-bank-failure-map.html

Category: Corporate Management, Credit, Legal, Regulation

Options for Auto Bankruptcy

> Sources: Bankruptcy Funding Solicited for Car Makers JEFFREY MCCRACKEN and JOHN D. STOLL WSJ, FEBRUARY 23, 2009, 1:16 A.M. http://online.wsj.com/article/SB123535613910745405.html

Category: Bailouts, Credit, Digital Media, Legal

Marijuana Inc.

Inside America’s Pot Industry

44:05

CNBC

Category: Legal, Video

Merrill Lynch Bonus Investigation

New York State Attorney General Andrew Cuomo is none too happy with $4 billion in recent Merrill Lynch bonuses! Enjoy: > AG Cuomo. MERpdf Publish at Scribd or explore others: Finance & Investing Business & Legal executive compensati

Category: Corporate Management, Digital Media, Legal, Markets, Wages & Income

Band-Aids for the Ailing Economy

Nice interactive timeline via Portfolio: This is 1935 – 2008; The earlier version 1865-1935 is also here

Category: Bailouts, Digital Media, Legal, Regulation

Foreclosures Exceed 250,000 For 10th Straight Month

Foreclosures Exceed 250,000 For 10th Straight Month in January; Analysis and Discussion with Realty Trac Executive Vice President Rick Sharga (First Word)


3:16
Bloomberg, February 12, 2009

Barney Frank disagrees

Category: Credit, Legal, Real Estate, Video