Geithner-Led NY Fed Told AIG To Limit Disclosure On Bank Swaps


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 insurerís 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.

(Emphasis supplied.) Is any comment necessary?

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    Where's my pitchfork? (5.00 / 1) (#1)
    by magster on Thu Jan 07, 2010 at 01:12:28 PM EST
    I hope this is the straw that forces his resignation, and I hope the momentum for the resignation comes from Congressional Dems.

    And Obama wound up (5.00 / 1) (#8)
    by Zorba on Thu Jan 07, 2010 at 01:32:00 PM EST
    hiring this guy, anyway.  Or maybe because of......So much for "transparency."

    Right now (5.00 / 1) (#19)
    by jbindc on Thu Jan 07, 2010 at 01:41:01 PM EST
    It's Republican Darryl Issa leading the charge on this one.

    This is where the Democrats are (5.00 / 5) (#21)
    by Militarytracy on Thu Jan 07, 2010 at 01:47:17 PM EST
    very vulnerable in the upcoming elections.  I don't know how they can continue to be this stupid.  Perhaps that will finally put an end to Geithner.  We still have Larry though.

    Anything Issa is for I am against. (5.00 / 1) (#22)
    by oculus on Thu Jan 07, 2010 at 01:47:54 PM EST
    It makes them very vulnerable with the (5.00 / 2) (#24)
    by Militarytracy on Thu Jan 07, 2010 at 01:49:23 PM EST
    indies though.

    Stupidity From Team Obama (none / 0) (#43)
    by norris morris on Fri Jan 08, 2010 at 11:30:49 PM EST
    Geithner is absolutely intolerable and this hypocrisy damages any credibility the bailout pretends to have.

    Team Obama are stupid,arrogant, and horribly inexperienced.  This is exploding in their face along with the Healthcare fiasco giveaway.

    Every sneaky shtick is being exposed, and every broken promise remembered.


    Except it is sort of like (none / 0) (#3)
    by Militarytracy on Thu Jan 07, 2010 at 01:18:23 PM EST
    firing General McChrystal right now.  Hopefully Larry Summers knows how this insane plan of a thousand unnamed tentacles ends.  If we aren't going to go for an FDR style recovery I don't see us firing Boy Wonder.

    Summers is as dirty (5.00 / 2) (#25)
    by jondee on Thu Jan 07, 2010 at 02:01:52 PM EST
    and up to his elbows in it as Geithner is.

    And, as long as Americanus Imbecilus keeps believing that money = "speech", no one's EVER going to keep   these bought-and-paid-for Wall St shysters out of the Whitehouse. So maybe it's time we quit the charade and stopped pretending that this is the result of bad "leadership", when 99% of our leaders are leave-the-status-quo-in-place players.


    I want Summers gone too (none / 0) (#27)
    by Militarytracy on Thu Jan 07, 2010 at 02:15:53 PM EST
    But if Larry goes and Timmy goes then nobody will know how to keep the books that are kept :)

    One can change Treasury Secretaries (none / 0) (#34)
    by inclusiveheart on Thu Jan 07, 2010 at 03:47:57 PM EST
    and economic advisors.  This is nothing like the issues you raise with firing McChrystal.

    Remember what they said about (none / 0) (#39)
    by Militarytracy on Thu Jan 07, 2010 at 05:59:55 PM EST
    all the default swapping though and firing those loons (and these guys are part of those loons)?  They said that nobody knows how all this goes except for the people who designed it all at the top.  It was put to us that the secret information on how to not have our economy seize up again lives only in their heads :)  If you hired new Treasury wouldn't there have to be like figures written down some place that the new guy could work from?

    No - someone qualified to analyze (5.00 / 1) (#40)
    by inclusiveheart on Thu Jan 07, 2010 at 06:41:14 PM EST
    data could easily deal with going through these deals.  None of this is really as secret squirrel as some would like you to believe.  The only reason it is secret squirrel is that they don't really want you to know how bad it is.  That's all.  I believe that Geithner's role is to cover up and delay the disaster more than anything else.  That's why he is there.  An honest broker would not be inclined to do that.

    The numbers that have been floated in terms of estimates in the credit default swap market and other wild bets are sometimes thought to be as high as $70 Trillion with a "t".  That is bigger than the entire global market.  Scary as hell really.  On a certain level, it is hard not to understand why the Obama Administration might not be so keen on being the ones to unravel that mess.  BUT what is very hard to understand is why they would allow these kinds of wild bets to continue to be made.  That's the real problem.  It is now obvious that Obama and his team have no desire to prevent further investment along these lines which is, imo, incredibly dangerous policy.


    Geithner (none / 0) (#44)
    by norris morris on Fri Jan 08, 2010 at 11:34:15 PM EST
    Inclusiveheart this is truly scary.

    Imo also a deal Obama approves of which is disheartening to say the least.


    The role of Timothy Geithner (5.00 / 2) (#32)
    by christinep on Thu Jan 07, 2010 at 02:59:35 PM EST
    As we heard from Sen Chris Dodd yesterday, noone is irreplaceable. Of all the appointments made in this Administration, the Geithner appointment always struck me as the most troubling. You know: The ole' fox in the henhouse. Early on, it seemed to me that Geithner would either be the goat or reflect any positive results upward. It also seemed that Geithner's very specific role was to quiet Wall Street at the outset so that they didn't take a collective flying leap and leave the Administration stranded. It was a version of the soft sell: He (Geithner) is as close to you as you could have prayed for in this Administration--so, work with him to avoid an alternative, a real regulator.  That was, and probably still is, my take on that hold-your-nose appointment. He is the "good guy" to them and "the bad guy" to the populist base--an excellent application of leverage/triangulation/whatever you want to call it today.  Meanwhile, Lawrence Summers--he of the acerbic personality, but also of the brilliant mind--moves in the background.  What do we have? Well, it does seem that the combo has steered the economy (beginning at the important macro level) through and away from the shoals into clearer, more promising waters within less than a year. The real problem, obviously, is the gamble they seemed to have placed that jobs would catch up this spring. I certainly hope so! The other problem, equally obvious, is Geithner himself--so, if my guess is correct, he can go if the pressure gets too great because he has filled his role well. He may be very replaceable very fast.

    Unlike firing the General though (none / 0) (#4)
    by Militarytracy on Thu Jan 07, 2010 at 01:20:29 PM EST
    It would be a huge morale boost for the troops.  

    Do we = equal "troops" or are (none / 0) (#5)
    by oculus on Thu Jan 07, 2010 at 01:22:10 PM EST
    you referring to U.S. Treasury Dept. employees?

    The whole country who isn't wealthy (5.00 / 1) (#6)
    by Militarytracy on Thu Jan 07, 2010 at 01:24:34 PM EST
    is sadly the troops I speak of, cuz Timmy boy is not on your side.  You can take your main street and shove it....the whole thing as far as he's concerned :)

    He takes orders from above. (5.00 / 2) (#7)
    by oculus on Thu Jan 07, 2010 at 01:30:15 PM EST
    I keep saying that (5.00 / 2) (#10)
    by Militarytracy on Thu Jan 07, 2010 at 01:34:03 PM EST
    but Orange tells me that I'm some sort of fanatic for calling Obama a corporatist Hamilton Project construct running around with skin on it.  And it still sticks in my head from Obama's book that he dissed FDR solutions.  I don't know what the man anchors his economic solutions to then if not to the people.

    There you go again with the self- (5.00 / 2) (#12)
    by oculus on Thu Jan 07, 2010 at 01:36:06 PM EST
    flagellation.  Booman.  DK.  Just read Digby and Greenwald and be done with it.

    How can you hope to stay fully in touch (none / 0) (#14)
    by Militarytracy on Thu Jan 07, 2010 at 01:38:08 PM EST
    if you don't ever read the stoopid?

    That was my theory before W's (5.00 / 1) (#17)
    by oculus on Thu Jan 07, 2010 at 01:39:51 PM EST
    second term.  Used to read Free Republic and Little Green Footballs.  Too stressful.

    And that is why (5.00 / 2) (#18)
    by Zorba on Thu Jan 07, 2010 at 01:40:50 PM EST
    I so very rarely even visit the Big Orange any more, although I certainly used to (and I've got a User ID under 50,000).  Can't go against the Revealed Orange Conventional Wisdom any more, if you ever really could- just ask Armando about that.  ;-)

    I hear (5.00 / 1) (#20)
    by CST on Thu Jan 07, 2010 at 01:45:35 PM EST
    Chris Dodd is available for hire :)

    I hear he knows a thing or two (5.00 / 0) (#23)
    by Militarytracy on Thu Jan 07, 2010 at 01:48:45 PM EST
    about banking in the new world order :)

    Thats what worries me... (5.00 / 1) (#30)
    by kdog on Thu Jan 07, 2010 at 02:25:11 PM EST
    the guy in charge of banking in the senate during this whole mess is not the guy I want in charge of the Treasury.

    I nominate Dadler.


    Whatever motives one imputes to Obama (5.00 / 1) (#29)
    by Coral on Thu Jan 07, 2010 at 02:24:44 PM EST
    it is very difficult to come up with an explanation of his financial and health insurance reform policy that shows him to be any kind of political wizard. No matter what his aims, he has been inept.

    His handlers, though, do have agendas, none of which are progressive.

    Congressional Democrats also have agendas. Many of them, however unintelligent in terms of understanding the issues, are extremely shrewd about what they need to do to be re-elected.

    Unless a president can harness all these tigers, his policy initiatives are doomed -- either to outright failure (like Clinton's 1994 health reform attempt) or to the law of unintended consequences that will do considerable harm to their historical reputation.

    I am beginning to believe that the Hillary Clinton campaign theme that Obama was not yet ready for the job is the key to understanding his administration's record so far. That he could get so much out of Congress, despite the ineptitude, is a testament to how desperate we as a nation are for real action on health care.

    I also suspect that there are some players in Congress who are the unsung heroes of getting the legislation to this point.

    Schumer is high on my list. I also like Pelosi.

    The ineptness defuses any optimism (5.00 / 2) (#33)
    by Cream City on Thu Jan 07, 2010 at 03:13:32 PM EST
    for me that Geithner will be gone anytime soon.  Some of us have been calling here for him to be fired for most of the year of the Obama administration.  Of course, some of us still can't figure out how Geithner got the appointment -- thanks to those hard-hitting Dems in Congress, btw -- with his record of not paying taxes.  Reading Kornblut's book now (advertised here), though, the context (and comparisons to nominees who were not appointed) becomes more clear. . . .

    And I just read that Dorgan (5.00 / 3) (#31)
    by Militarytracy on Thu Jan 07, 2010 at 02:52:47 PM EST
    added to the hold on Bernanke's renomination until Ben tells us what he did with our money.

    I have this dream (5.00 / 1) (#38)
    by Inspector Gadget on Thu Jan 07, 2010 at 05:27:26 PM EST
    where the people of the country just stop using treasury money for life. Anything would do, just something to swap, like feathers. Leave the bankers sitting there with all their gold and currency and not a feather to their names. :)

    I can't believe what Dem's have done (5.00 / 0) (#36)
    by mmc9431 on Thu Jan 07, 2010 at 04:31:08 PM EST
    This "cozy" relationship with corporate America (that the Democrats continue to flaunt) is going to be their downfall in the coming elections. This hand holding may work in Wahington, but the majority of Americans are sick of hearing about the poor banks, pharms,and insurance industry.

    Between the bailouts and the bills, Democrats have totally forgotten their base. Instead of the New Deal, Americans are getting the Raw Deal.

    He's such a POS (none / 0) (#2)
    by Militarytracy on Thu Jan 07, 2010 at 01:16:24 PM EST
    It isn't like we didn't already know, but getting the evidence is needed.

    Well, the good thing is that a guy like Geitner (none / 0) (#9)
    by Buckeye on Thu Jan 07, 2010 at 01:33:40 PM EST
    will never be put in a position to influence economic policy.

    Whew....I know (none / 0) (#13)
    by Militarytracy on Thu Jan 07, 2010 at 01:36:40 PM EST
    And people who have seen this nation through several challenging periods, for instance Paul Volcker, will always be placed in key positions :)

    Maybe the WH leaked the info re (5.00 / 1) (#15)
    by oculus on Thu Jan 07, 2010 at 01:38:17 PM EST
    Orzag "love child" as a diversion from release of this info?

    Probably (none / 0) (#16)
    by Militarytracy on Thu Jan 07, 2010 at 01:39:50 PM EST
    And I thought all Orzag did (none / 0) (#26)
    by KeysDan on Thu Jan 07, 2010 at 02:05:15 PM EST
    in his spare time was read the Dartmouth Atlas.

    With a page turner (5.00 / 1) (#28)
    by Militarytracy on Thu Jan 07, 2010 at 02:16:29 PM EST
    Geithner is so dirty in this thing (none / 0) (#11)
    by pluege on Thu Jan 07, 2010 at 01:34:48 PM EST
    he's bound to be gone soon and he goes he will make obama look very, very bad.

    That depends. (none / 0) (#35)
    by inclusiveheart on Thu Jan 07, 2010 at 03:54:43 PM EST
    If Obama fires him and replaces him with someone who is skilled and not so ethically challenged, then he could look good.

    If, however, Obama fires him and replaces him with someone equally ethically challenged and well connected - in the fox in the hen house sense - to the people Treasury is supposed to oversee, then he'll look even worse.


    Goldman Would Have Gotten 100% No Matter What (none / 0) (#37)
    by seabe on Thu Jan 07, 2010 at 05:21:41 PM EST
    If AIG was bailed out or not, Goldman et al would have gotten the same amount of money regardless. Allowing AIG to fail wouldn't have mattered. Goldman simply would have seized the posted collateral and collected the rest of the money from its hedge counterparties.

    What's the story here?

    Who's wearing the collar, who's holding the leash? (none / 0) (#41)
    by SeeEmDee on Fri Jan 08, 2010 at 08:53:09 AM EST
    On June 6, 2008, Obama met in secret with Geithner and a whole bunch of his bankster buddies...and now he's Prez...and bankster Geithner is in charge of the bank regulation.

    Who's the boss, here? Obama? Or his buddies?

    ugggh (none / 0) (#42)
    by tworivers on Fri Jan 08, 2010 at 09:27:06 AM EST
    this story makes me sick to my stomach.

    Enough is enough.  Fire the guy already