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The United States taxpayer has bailed out American International Group (NYSE: AIG) to the tune of $160 billion -- so far -- but a huge chunk of that money has actually gone to a number of other firms that also received bailout money of their own.The way it works is this: A big part of what got AIG in trouble was its role as counter-party in swap transactions, providing what amounted to insurance on dodgy debts -- loans taken out by borrowers with poor credit to buy homes at inflated prices.
The bailout has allowed AIG to meet its obligations to counterparties and the result is that the United States taxpayer's money has flowed through AIG into the following companies, just to name a few:
- Goldman Sachs (NYSE: GS): $12.9 billion
- Merrill Lynch: $6.8 billion,
- Bank of America (NYSE: BAC): $5.2 billion ($12 billion including the Merrill Lynch money)
- Citigroup (NYSE: C): $2.3 billion
- Wachovia: $1.5 billion
On the topic of the money that flowed through AIG to Goldman, Citigroup, Bank of America, etc., however, I have a proposal: Why don't we make those companies also responsible for AIG's debts? After all, if we hadn't stepped in, they would have had to eat those losses. So doesn't it seem fair that they should at least be "co-signers" of sorts on our "loans" (he said with a smile) to AIG?
I say the new plan should go like this: If AIG defaults on its loans from the united States, Goldman Sachs is responsible for the first $12.9 billion in taxpayer losses -- Bank of America covers $5.2 billion, Citigroup $2.3 billion, and Wachovia $1.5 billion.
What's the problem with that?
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Reader Comments (Page 1 of 1)
3-16-2009 @ 9:49AM
sherry said...
I CAN'T BELIEVE ANY OF THIS IS HAPPENING. WE DO BUSINESS WITH BANK AMERICA AND CITY BANK BUT NOT MUCH LONGER. WHEN WE ENCURED NEW KINDS OF CHARGES, BECAUSE OF OTHER PEOPLE DEFAULTING ON CREDIT CARDS ARE HOME LOANS WHILE WE KEPT UP REGULARLY, IS ANOTHER WAY FOR THEM TO STEAL FROM OUR POCTECTS BESIDES BEING A TAX PAYER. OR WAY OF SOLVING THE PROBLEM, WE NO LONGER WITH BANK WITH BANK AMERICA, IN THE PROCESS OF GOING TO A CREDIT UNION, LOACAL OWNED BANK. ALSO, WE ARE GOING TO QUICKLY PAY DOWN THE TWO ONLY CARDS WE HAVE AND ANY THING WE MAKE PAYMENTS TO THAT BELONG TO THESE COMPANIES. FOR NOW ON, AS DR, PHIL SAYS, CASH ONLY. I AM TIED OF BEING SCREWED BE FOR I AM KISSED
3-16-2009 @ 10:51AM
M said...
So, in effect the "profits" that financial institutions are showing are in fact receipts of "trickle down" bailout cash?
Yeah, buddy - the recession is going to end in 2009 ... my arse.
3-16-2009 @ 10:58AM
ignazio50 said...
ATTENTION !!! ATTENTION !!!
MOST OF THE MONEY FROM THOSE LENDING INSTITUTIONS WENT IN THE POCKETS(BANKS)OF THE BUILDERS AND DEVELOPERS .
ALL THE ONES I KNOW ARE MILLIONAIRES AND SOME BECAME BILLIONAIRES .
A FEW OPENED UP THEIR OWN BANKS AND LENDING INSTITUTIONS TOO.
LOOK NO FURTHER! THEY HAVE ALL THE MONEY WALL STREET LOST.
3-16-2009 @ 2:09PM
TX CHL Instructor said...
If you are "too big to fail", then the price for accepting bailout money should be splitting up your company into small enough parts that individually, they are no longer "too big to fail".
Instead, the bailouts have made the recipients larger.
BTW, anybody notice that the money supply has TRIPLED in less than a year?
--
www.chl-tx.com
3-20-2009 @ 11:02AM
John Doe said...
Why should they be scrutinized for making good bets? Should the government have let AIG fail just to stop these payouts from happening?
And besides, the actual losses to the banks would be premiums paid unless not mistaken.
3-18-2009 @ 9:03AM
Charles said...
Obama got an AIG “bonus” says a report posted on http://www.pimpinturtle.com
Isn’t it time to IMPEACH THE GUY?
THE AIG CRIME RACKET IS NOW OBVIOUS TO ANYONE AND SO IS OBAMA’S ROLE.
THROW OUT THE STOOGE PATRICK FITZGERALD AND PUT IN NEW ATTORNEYS AND IMPEACH OBAMA, JAIL DODD ALL OF THEM
“Senator Barack Obama received a $101,332 bonus from American International Group in the form of political contributions according to Opensecrets.org. The two biggest Congressional recipients of bonuses from the A.I.G. are - Senators Chris Dodd and Senator Barack Obama.”
Also, Bernie Madoff is being released, because of Israel's pleas that the former Mossad agent Madoff was funneling his proceeds back to Israel to fund intelligence operations, and that Obama should release him, or Israel is going to wage war against the US.