GET THIS: Barron’s believes the blogs may be onto something (we reported here yesterday) and is picking up on this odd little story of financial swapping. It is potentially fraudulent and I suspect this issue could be the new Watergate. Geithner and Obama are not patsies no matter what they might say as this comes out. Maybe the bonuses were just hush money. I dunno, I am just sayin':
HERE IS POST EXERPT AS IT APPEARS-
Web Site Details AIG’s ‘Gift’ To Banks, Backhand To Taxpayers
If this is borne out, this one’s a game-changer. For the financial sector. For the government’s bailout plans. For the Administration’s leadership.
The website Seeking Alpha published an account Monday of a maneuver by American International Group (AIG) to: a) fraudulently capsize its balance sheet, in order to; b) force the government to pour more capital into the capsizing insurance giant, by; c) unwinding billions of dollars of credit transactions with banks that took the other side of those trades, in a way that; d) swelled those banks’ balance sheets with what was effectively a one-time gift, and; e) the Treasury knew about the scheme, and by; f) pumping the capital that AIG clamored for, gave its tacit approval.
Keep in mind, according to the Seeking Alpha account, this wasn’t a plan by AIG. This was an act: covert, at least from taxpayers – who, let’s be honest, aren’t going to understand the intricacies of sales of credit-linked notes – but overt, with the complicity of AIG executives, especially at its AIG-Financial Products unit, along with banks and Administration officials….
The result: AIG effectively transferred a huge chunk of its balance sheet to its banking counter-parties. The banks got a one-time shot-in-the-arm to their bottom line. An increasingly desperate AIG gets the capital it clamored for.”
See related post: http://sonoranalliance.com/?p=3974