Restart Those "Geithner Goes" Office Pools

Whoever, in the first round, got a date in 2010, for when Secretary of the Treasury Timothy Geithner takes a hike, forced or otherwise, may be looking a bit more optimistic today;



Geithner’s New York Fed Told AIG to Limit Swaps Disclosure Share Business Exchange

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.”

Oh, Timmy, you didn't do that ...

Oh, Timmy, Timmy, Timmy ...

There's little refuge out there, Timmy.

Henry Blodget;

Bloomberg unearths more details on the nauseating bailout of AIG and the 100-cents-on-the-dollar payouts to Goldman, et al.

Once again, Tim Geithner was in charge.

Barry Ritholtz;

Between Summers and Geithner, it appears that President Obama has made the exact same mistake that one George W. Bush did: Instead of filling his administration’s most important posts with his own people, he reached back to prior admins (Cheney, Rumsfeld, etc) and loaded up on incompetent retreads.

Barack W. Obama indeed . . .

Felix Salmon points out another fact that Timmy, probably, would like to bury;

Michael Corkery also points out that all of this secrecy coincided with Geithner’s nomination to be Treasury secretary, which makes the whole thing stink much more: was Geithner deliberately trying to keep anything potentially damaging secret for the sake of his own personal career progression?

And, Edward Harrison, writing on Naked Capitalism, just lets it all out;

Let me add a few words to Yves’ last post because I don’t think she was explicit enough about what’s going on here. This was looting and a cover-up plain and simple.

[snip]

He was on the job when these firms levered up and took reckless risks that endangered our financial system. For him to absolve himself of responsibility is a disgrace. And to add insult to injury, we now learn that he urged a systemically important company to withhold evidence of his looting of taxpayers.

Tim Geithner must go

Now, we wait, to see what Congress does, and if they will go after Geithner, and, for that matter, Heistin' Hank Paulson, for their total scam rip-off of the Treasury, the citizens, the country.

And, for those holding squares, say, in Spring (the Obama White House will want to get this off the radar well before the Fall Midterms), you're sitting pretty ...


Bonus Riffs

Susie Madrak: Geithner to AIG: Let's Keep This Under Our Hat, Okay?

Cynthia Kouril: Geithner’s New York Fed Ordered AIG to Violate Securities Law in 2008

Breaking! ... Obama Takes Action, Siezes AIG's March Madness Office Pools and Brackets

Blame?

This Didn't Make The 11PM News ...

Greed Has A Name ...

In A Nutshell ...

They should have a big, confetti-falling, band-playing, ribbon-cutting ceremony at 30 Rockefeller Center in the coming days.

Perhaps to distance themselves from their own folly, their front-row cheering of the Wall Street Meltdown, General Electric will be changing the name of its' flagship business channel, giving it a dose of "truth in advertising".

No, they don't need to do esoteric, like Xe.

In fact, they can keep the same call letters, CNBC.

Just now, they translate to Can Not Be Credible.

For CNBC's Mark Haines to say to someone (and elected member of Congress, to boot), criticizing the Wall Street Meltdown, the naked, obscene raping of the financial system, to the point of complete ruin, that the steps to correct it are "Witch Huntery", says, in the nutshell, how in-the-tank Can Not Be Credible is, and how screwed the "media" really is (or, how screwed we really are).

Rep. Sherman (D-CA) vs. CNBC's Mark Haines



"What do people on Main Street know about running a financial system?"

Well, Mister Mark Haines, we don't have to look back to sepia-colored history, to turn that question around on you, and ask "What do people on Wall Street know about running a financial system?"

Hilzoy, over on Obsidian Wings, in fact, illustrates that point rather well;

A couple of years ago, it would have been hyperbole to suggest that we would all be better off if the senior executives at all our major financial firms were people picked entirely at random out of the phone book. Now, it's arguably true. People picked at random would, admittedly, be likely not to have been to business school. They might not know a lot about futures or derivatives or put options. But so what? At least they might have been more likely to know that they were clueless, and a few of them might have had the common sense to ask questions like: will housing prices really go up indefinitely?

In any case, what's the worst they could have done? Bankrupted their companies with ludicrously risky gambles that fell apart once markets went south? Destroyed trillions of dollars in value? Brought the world financial system to the brink of collapse? Left taxpayers across the globe on the hook for trillions of dollars? Bankrupted entire countries?

Oh, right.

And Now, We Come To The Sanity Clause

It may, or may not, be accidental, that news of the long-awaited Geithner-created, Obama Administration plans for the failed banks, stocked to the brim with those "toxic assets", was leaked out, just as March Madness was getting underway.

Perhaps they were looking for a "Cinderella Story" run with it, however, the early reviews coming in show it getting bounced, in the first round.

Nobel Prize winner Paul Krugman was brought to "Despair" over it, citing "The zombie ideas have won";

The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.

[Snip]

But it’s immediately obvious, if you think about it, that these funds will have skewed incentives. In effect, Treasury will be creating — deliberately! — the functional equivalent of Texas S&Ls in the 1980s: financial operations with very little capital but lots of government-guaranteed liabilities. For the private investors, this is an open invitation to play heads I win, tails the taxpayers lose. So sure, these investors will be ready to pay high prices for toxic waste. After all, the stuff might be worth something; and if it isn’t, that’s someone else’s problem.

A few hours later, Krugman, still despaired, added;

Why am I so vehement about this? Because I’m afraid that this will be the administration’s only shot — that if the first bank plan is an abject failure, it won’t have the political capital for a second. So it’s just horrifying that Obama — and yes, the buck stops there — has decided to base his financial plan on the fantasy that a bit of financial hocus-pocus will turn the clock back to 2006.

Economist James K. Galbraith;

If I'm right and the mortgages are largely trash, then the Geithner plan is a Rube Goldberg device for shifting inevitable losses from the banks to the Treasury, preserving the big banks and their incumbent management in all their dysfunctional glory. The cost will be continued vast over-capacity in banking, and a consequent weakening of the remaining, smaller, better- managed banks who didn't participate in the garbage-loan frenzy.

Publius, on Obsedian Wings, heralds that "This banking business may well be Obama’s Vietnam ...", while Frank Rich, today, slaps Obama upside the head, respectfully, but forcefully, pointing out that his "Katrina Moment" has arrived.

Digby, perhaps, got it down, on what Obama, Summers and Geithner must need, to either breath life into the plan, or themselves, with "Clap Louder".

Well, not only "Clap Louder", but yell, scream, jump up-and-down, louder, until it is a deafening roar, is, apparently what is needed.

After the last eight-years, "trust us" isn't going to cut it, something Glenn Greenwald got into yesterday;

This anti-anger consensus among our political elites is exactly wrong. The public rage we're finally seeing is long, long overdue, and appears to be the only force with both the ability and will to impose meaningful checks on continued kleptocratic pillaging and deep-seated corruption in virtually every branch of our establishment institutions. The worst possible thing that could happen now is for this collective rage to subside and for the public to return to its long-standing state of blissful ignorance over what the establishment is actually doing.

[Snip]

Atrios has been writing a version of the same key observation virtually every day for weeks -- that almost every plan to "solve" the financial crisis involves nothing more than transfers of enormous amounts of public money into the pockets of the same unchanged system and the same people who caused the collapse in the first place:

The issue is that [Geithner] and friends never distinguished between bailing out the system and bailing out the players. There was a way to do that, and they didn't do it.

[Snip]

The AIG scandal vividly reveals how corrupt and self-interested are the people who are still exerting primary control over this process, which is why our establishment class is so eager to demand that everyone look away. For months, Americans have been told that they must sacrifice and trust the Government to engage in extraordinary actions if they want to stave off another Great Depression, only to watch as hundreds of billions of dollars fly to the very people who are the prime culprits. As Jane Hamsher put it: "The 'populist rage' that the pundits find so unseemly is actually the appropriate response."

But Wait!

Matthew Yglesias is optimistic, and Brad DeLong weighs in on the positive side;

Q: This sounds very different from the headline of the Andrews, Dash, and Bowley article in the New York Times this morning: "Toxic Asset Plan Foresees Big Subsidies for Investors."

A: You are surprised, after the past decade, to see a New York Times story with a misleading headline?

Q: No.

A: The plan I have just described to you is the plan that was described to Andrews, Dash, and Bowley. They write of "coax[ing] investors to form partnerships with the government" and "taxpayers... would pay for the bulk of the purchases..."--that's the $30 billion from the private managers and the $150 billion from the TARP that makes up the equity tranche of the program. They write of "the Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money..."--that's the debt slice of the program. They write that "the government will provide the overwhelming bulk of the money — possibly more than 95 percent..."--that is true, but they don't say that the government gets 80% of the equity profits and what it is owed the FDIC on the debt tranche. That what Andrews, Dash, and Bowley say sounds different is a big problem: they did not explain the plan very well. Deborah Solomon in the Wall Street Journal does, I think, much better. David Cho in tomorrow morning's Washington Post is in the middle.

Krugman still isn't on-board;

And a final point: I’m with Atrios here. If getting the prices of toxic assets “right” isn’t enough to rescue the banks, that doesn’t mean that we’re doomed; it means that we actually have to, you know, rescue the banks, Swedish style, rather than rely on fancy financial engineering to make the problem go away.

"I'm with Atrios?"

Actually, it's worse than that, it's "If Timmeh is wrong about the ponies in Big Shitpile then it's Mad Max for all of us."

But, this all gets put in motion, tomorrow morning, before the opening bell of trading, when Tim "What's that, Lassie? (Woof, woof!!) Timmy Geithner's in the well?!!" Geithner meets with reporters and lays it all out.

Then, we wait and see.

Either the economy starts its' Herculean rise, and money is flooding the streets like a summer cloudburst, or, it's Harry Lime time;

"...and don't be so gloomy. Remember what the man said: under the Borgias there was warfare, bloodshed and murder and they had Michelangelo, Leonardo da Vinci and the Renaissance. In Switzerland they have brotherly love, 500 years of democracy and peace. And what have they produced? The cuckoo clock! ..."

Breaking! ... Obama Takes Action, Seizes AIG's March Madness Office Pools and Brackets

Feeling a building backlash to the corporate bailouts, and the news this weekend of insurance giant A.I.G. (Always Incredibly Greedy) paying out hundreds-of-millions in bonuses, Federal Marshalls, in this country, various law enforcement in other countries, raided A.I.G. offices and seized the company's March Madness office pools and tournament bracket funds.



The order came from President Obama.

"In the last six months, AIG has received substantial sums from the U.S. Treasury. I've asked Secretary Geithner to use that leverage and pursue every legal avenue to block these March Madness pools and make the American taxpayers whole," Obama said.

A spokesperson for Treasury indicated they would follow through with the President's directive, but that Secretary Geithner was "unaware" that March Madness had begun.

Press Secretary Robert Gibbs said that President Obama ordered the action late yesterday, shortly after the NCAA Basketball Tournament selection process was completed.

"We expect this will net hundreds-of-thousands-of-dollars," a stern Gibbs announced, citing much it taxpayer money already given A.I.G. in the previously-released TARP fund bailout.

"The President found in unconscionable that public funds would be used in this manner."



Rumors are circulating in the Capital that President Obama is weighing issuing an Executive Order, to, effectively, nationalize all March Madness office pools and bracket funds, redirecting the money to possible future Stimulus Packages, or additional corporate bailouts.

Reaction to the move by President Obama, against A.I.G fell along party lines.

Speaker of the House Nancy Pelosi hailed the action, saying it was "unfathomable" that A.I.G would be running March Madness pools in light of the dire circumstances facing the company.

Pelosi stopped short of endorsing the possible nationalizing of March Madness pools, saying that "they are not on the table at this time."

Congress Eric Cantor (R-VA) slammed Obama.

"The President talks about creating, or saving jobs. Well, he just wiped out dozens of them, the people that create the squares, run around the office selling them, collecting the money, having to monitor the tournament and update the squares ... That's not change you can believe in."

Senator Richard Shelby (R-ALA) called on the President to direct General Motors, and the UAW, to downscale their March Madness office pools, to match the March Madness office pools of non-union shops.



In a scathing press release, A.I.G. Chief Edward Liddy cited he was "extremely disappointed in the President's actions" and that there may be "legal ramifications" to the seizing of A.I.G.'s March Madness office pools, citing some of the employees "may have used their own, personal funds".

When pressed by reporters, Liddy admitted that he drew in his square, University of Connecticut, to win the tournament.


Bonus "Always Incredibly Greedy" Bonus Riffs

Glenn Greenwald: The sanctity of AIG's contracts

Jane Hamsher: Who Stole Our Country, and How are We Going to Get It Back?

TBogg: Bring on the Bobs

Robert Stein: Bailout Roulette

Steve Benen: AIG'S TENTACLES...

NYT: A.I.G. Lists Which Banks It Paid With U.S. Bailout Funds

MSNBC: Obama seeking ways to block AIG bonuses ... President calls $165 million in bonuses an 'outrage to the taxpayers'

CBS News: White House May Want AIG Money Back ...Administration Investigates Ways To Retrieve Some Of The Millions AIG Used For Bonuses

Compared To What

Another rough day on the homefront, and any iota of creativity long left me, well before the noon hour.

Ahhh, but there is much percolating ...

The Cheeseburger That Sweats (or, as he decribes himself, a "harmless, lovable little fuzzball" - he must have shopped himself one helluva doctor to come up with that) has raised the stakes in his stunt, today "challenging" the President of the United States to come down to his radio studio and debate him on "the issues of the day".

Yeah, right ...

Can you imagine the cacophany, the deafening roar, say, if someone from Air America, or, better yet, Keith Olbermann "challenged" The Commander Guy to come of their program for such a thing?

Sorry, there, El Dittohead Grande, you'll just have to be satisfied with being ridiculed, sans the POTUS giving you a gigantic ratings bonanza.

And speaking of ridiculing, the The Democratic Congressional Campaign Committee threw up a website today - I'm Sorry Rush - that is hysterical, giving the PartyofNoicans a point-and-click template to send their apologies in to the "harmless, lovable little fuzzball" (Greg Sargent reported, earlier today, and before the DCCC sent out their email announcing it, that the site ("We uncovered the secret Republican Apology Machine"), had already "nearly 150,000 visits, to which Sargent marvels, tongue firmly planted in cheek, "Amazingly, the site has gotten this number of visits despite the fact that it isn’t linked on Drudge!").

And, MediaMatters put up today their "Limbaugh Wire", where you can check for yourselves, the delusional rantings of that "harmless, lovable little fuzzbal, cheeseburger that sweats".

In other follys, Karl Rove and Harriet Miers will, finally, appear before Congress, in the matter of the firing of the U.S. Attorneys.

Yawn ...

Not that I don't want to see Rove (and Miers, and any-and-all other Bush Grindhouse cronies in cuffs and a perp walk), but I don't believe, after all this time, all this tap dancing, that either will offer anything newsworthy - nor will they be humbled and apologize for their insulting treatment of the Congress, in their longstanding refusal to comply to subpoenas.

If they need any help, or tips in how to apologize, they can ask this guy ...



Michael "Off The Hook" Steele.

All his theatrics the past few days (and month), will, probably, make a nice Wikipedia entry, one of the sub-categories detailing his short tenure as Big Cheese of the PartyofNoicans.

The Jeopardy theme music is blaring, based on numerous reports today of other, unnamed PartyofNoicans pretty pissed off with him, dissing that he's done jackshit, so far, for the party, that is, other then embarrass them.

This includes a post from Bryon York, whose cheeks still haven't come back to form, after eigth-years of sucking up to The Bush Grindhouse.

Josh Marshall was the only one to directly ask "How Long Does This Guy Last?"

Add in the tanking stock market, Jim Cramer adding his dementia, to compete with Rick Santelli, the corporate pigs at AIG, and you get a sense of something is in the air ...

Here's a classic you can use to help blow off the steam ... 

Compared To What Les McCann and Eddie Harris

Compared To What (LP Version II) - Les McCann & Eddie Harris

Top Ten Cloves: Things About Citigroup Keeping Stadium Sponsorship After Getting Government Bailout

News Item: Heckuva Bailout: Citi and AIG Still Pay Hundreds Of Millions In Sports Sponsorship

10. Instead of 'Fan Appreciation Day', now will be called 'Hank Paulson Appreciation Day'

9. Make fans give back foul balls hit in stands, because Citigroup needs to "tighten belt and save money"

8. When starting pitcher is relieved, now will be referred to as being "bailed out"

7. Soon comes evident ... Free Agent Signing Season on one hand ... Major layoffs at Citigroup on the other hand

6. Citigroup making one concession - Killing plans that would allow execs to fly to stadium in their private jets

5. "Casey at the Bat" now gets reworked to "Casey at the Bank" and it's a happy ending - Casey doesn't strike out, but walks away with billions

4. Citigroup to sub-contract parking lot to AIG... AIG hires people to vandalize cars ... AIG then sells fans new "Vandalism Insurance Policy"

3. Instead of ceremonial "first pitch", Citigroup execs will do ceremonial reenactment of receiving bailout check from Government

2. New 7th Inning stretch tradition - Players and Citigroup shakedown fans in stadium, making them fork over money to see the game finished ...

1. Using their "expertise", Citigroup to make millions ... Working on packaging troubled batting averages and selling them to investors


Bonus Bogus Bailout Riffs

Think Progress: Bailed-out companies AIG, Citibank have no plans to cancel expensive sports sponsorships

Michael Winter: Citi, AIG will continue sports sponsorships despite bailouts

Robert Reich: Citigroup Scores

Tyler Cowen: Whoops! Back to TARP after all...

Brilliant at Breakfast: So why DID we just throw a truckload of money at Citigroup then?

The Wonk Room: Citigroup Bailout: ‘A Lousy Deal For The Taxpayers’

Mark Thoma: The Citigroup Bailout


Bonus Bonus

Special Essay - Play Ball! ... Batter Up! ... Could You Please Tell Me, What Is This Thing Called Baseball?