Free Republic

the bogey man known as “systemic risk” to gain advantage over the other creditors . ... In order for the OTC casino to work, the derivatives contracts had to be given special priority in bankruptcy. Speculative derivative instruments such as credit default swaps (CDS), which caused the failure and government bailout of American International Group, could never exist in significant size were in not for the safe harbor from bankruptcy for derivatives created by Congress in the 1980s and 1990s. Members of Congress from both parties were paid very well for their treachery. ... The intellectual author of the “systemic...

The FSOC’s decision to expand the too-big-to-fail designation to nonbank firms will be seen as the most damaging action taken under Dodd-Frank. It was no surprise that the Financial Stability Oversight Council (FSOC) decided last week to cite a number of nonbank firms as systemically significant, placing them in line for greater regulatory scrutiny by the Federal Reserve. What was a surprise is that — in the midst of a huge outcry in Congress about banks that are too big to fail (TBTF) — neither Congress nor the administration asked the FSOC to stop the designation process until the too-big-to-fail...

Former American International Group (AIG) CEO Hank Greenberg accused the Obama administration Wednesday of threatening the company not to join a class action lawsuit that he has brought against the federal government over the terms of the 2008 AIG bailout. Minutes of an AIG Board of Directors' meeting in January 2013 appear to support Greenberg's claim. Frances Bivens, the lawyer who represents the U.S. Treasury in the case, warned AIG's board that if it joined the lawsuit, the company could face "another wave of congressional investigations" and public embarrassment. Greenberg, who had left AIG by the time of the 2008...

While American taxpayers bail out failing companies via the $700 billion Troubled Asset Relief Program (TARP), behind the scenes the Obama Treasury Department is awarding their top executives with millions of dollars in raises even though Congress passed a law forbidding it. It’s an inconceivable scheme that rewards bad behavior with big bucks from taxpayers who have no say in the matter. In fact, the U.S. Treasury was forced by Congress to create rules against it yet a new federal audit reveals the agency repeatedly violates them to enrich the very people responsible for the companies’ failures (and need for...

Even as it runs ads thanking America for a $182 billion bailout, insurer AIG might join a lawsuit claiming that shareholders were unfairly hurt by the terms of the federal rescue that kept it out of bankruptcy four years ago.

<p>WASHINGTON -- The Treasury Department said Monday that it would sell its remaining ownership stake in insurance giant American International Group, effectively ending one of the largest bailouts of the financial crisis and turning a profit for taxpayers.</p> <p>The sale of the Treasury's remaining 234 million shares -- 15.9% of the company -- would add to the $15.1 billion in profit the government already has made on the bailout. The Treasury would still hold warrants in AIG after the stock sale.</p>

Soros increases his stake in AIG By Laurie Bennett November 18, 2012 at 5:56am One of the likely beneficiaries of the government-backed recovery of American International Group: billionaire George Soros. Soros Fund Management has upped its investment in AIG, bringing its holdings to 15.2 million shares, worth $484 million. The fund last week reported AIG as its third largest investment (after Micron and Lucent). Soros is a longtime supporter of liberal causes and Democratic politicians. In the last election, he gave $1 million to the major super PAC supporting President Obama’s re-election, and another $1 million to American Bridge 21st...

We talk a lot about the lies this Administration tells about the economy, but last week, we got a whopper. Here's the president on the campaign trail talking about TARP. “We got back every dime we used to rescue the financial system, but we also passed a historic law to end taxpayer-funded Wall Street bailouts for good. “ Every dime? I wish it were true, but unfortunately the taxpayer is still out of pocket on the bailout of the financial industry. Naturally, Fannie Mae and Freddie Mac lead the way. Together they owe taxpayers $140 billion, actually more. Remember they...

The Federal Reserve said taxpayers ended up earning $17.7 billion from the central bank's role in bailing out insurance giant American International Group Inc. On Thursday, the Federal Reserve Bank of New York, the investment management arm of the Fed, sold the last of the asset-backed securities it acquired in the multi-step bailout of AIG, which the central bank engineered in 2008 with the Treasury Department. The government pledged more than $182 billion to AIG in exchange for a 92% ownership stake as it stepped in to keep the company from filing for bankruptcy and possibly causing a global meltdown...

As the state of New York continues to carry the legal torch lit seven years ago by disgraced former Attorney General Eliot Spitzer against American International Group (AIG) and its former CEO Maurice “Hank” Greenberg, two new and startling revelations have emerged surrounding the man the New York Attorney General’s office has put at the tip of its prosecutorial spear, David Ellenhorn.

LJUBLJANA: American International Gro-up Inc ( AIG) Chief Executive Officer Robert Benmosche said Europe's debt crisis shows governments worldwide must accept that people will have to work more years as life expectancies increase. "Retirement ages will have to move to 70, 80 years old," Benmosche, who turned 68 last week, said during a weekend interview at his seaside villa in Dubrovnik, Croatia. "That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth." The crisis, now in its third year, threatens to destroy Europe's 17-nation currency union as...

MIAMI, Oct 29 (Reuters) - The jailed whistleblower in a landmark tax evasion case against UBS AG is accusing a top U.S. Justice Department lawyer of "criminal conduct" for thwarting his efforts to cooperate with investigations of the Swiss bank by federal regulators and the U.S. Senate. Bradley Birkenfeld, who was instrumental in exposing widespread tax evasion by wealthy American clients of UBS, detailed the alleged misconduct involving the Justice Department's Kevin Downing in a telephone interview on Thursday. A Justice Department spokesman declined to comment. The 45-year-old former UBS banker spoke to Reuters from the federal prison in Pennsylvania...

The former head of the American International Group sued the U.S. government for $25 billion on Monday, claiming officials should have bailed out AIG instead of taking it over. Maurice "Hank" Greenberg and his Starr International Company accused officials of discriminating against AIG. "The government is not empowered to trample shareholder and property rights even in the midst of a financial emergency," Starr alleges in the lawsuit, which was filed in the U.S. Court of Federal Claims in Washington, D.C. Starr also sued the Federal Reserve Bank of New York in federal district court in Manhattan. A top Treasury Department...

A Republican senator is calling on President Obama to cancel the $12.8 million in bonuses that were approved for 10 executives at the government-seized mortgage giants Fannie Mae and Freddie Mac that received a $170 billion taxpayer-funded bailout. “I am calling on the president of the United States to cancel those bonuses and explain to the American people, the taxpayers who bailed out Freddie and Fannie, why he continues to reward failure,” Sen. John Barrasso, R-Wyo., said at a news conference Tuesday. The two housing giants have received about $141 billion in taxpayer funds since the government took them over...

Three weeks ago, when discussing the failed (yes, failed) Maiden Lane 2 auction by the New York Fed, we said: 'Something quite disturbing happened during today's latest attempt by the Fed to sell $3.8 billion in face amount of Maiden Lane 2 assets: it had a busted dutch auction. In fact, the auction was so massively busted, the New York Fed managed to sell only half of the bonds for sale, or $1.898 billion in 36 Cusips of the total 73 Cusips offered for sale." Subsequently we noted the sudden radiosilence from the Fed on this issue on Twitter. To...

I’ve written several articles skewering HBO for producing political projects destined to air immediately prior to the 2012 election, where the vast majority of the cast and crew are passionate Barack Obama supporters, and where the content is aimed at the Democrat’s two favorite Republican villains… Sarah Palin and Dick Cheney. So, when I sat down to watch HBO’s Too Big to Fail, I prepared myself for the worst. What I didn’t expect was the big surprise awaiting me. Too Big to Fail, which premieres on HBO on May 23, 2011, features a star studded cast recounting the events that...

A.I.G. reported net income of $269 million for the quarter, compared with $1.78 billion a year earlier… The company noted that its continuing operations lost $1.18 billion, compared with a profit of $2.09 billion, a year earlier. The steep decline in A.I.G.’s finances comes as the insurer prepares for a major offering of the government’s shares in the company later this month… following its $182 billion bailout, which gave the government a 92 percent stake.

Countrywide’s VIP program is the first subpoena target for House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.), said a committee aide. The “Friends of Angelo” program, named for former Countrywide CEO Angelo Mozilo, has been under committee investigation since 2008 for allegedly granting generous mortgage deals to influential government officials, lawmakers and employees at Fannie Mae. “Countrywide orchestrated a deliberate and calculated effort to use relationships with people in high places in order to manipulate public policy and further their bottom line to the detriment of the American taxpayers even at the expense of its own lending standards,”...

If there is one bailout where the U.S. Treasury should be uncompromising in protecting taxpayer interests, it is the rescue of American International Group. Yet, nearly two years after its near-collapse, AIG has yet to pay any cash dividends to the Treasury on the $49 billion of public money it still has invested in the company. That fact is a jarring reminder of the big compromises the government made in shoring up AIG—and the potential conflicts the Treasury still has to navigate as it tries to exit the company. AIG is making payments on the government support provided by the...

AIG CEO: Liberals are deadbeatsThe head of the government-owned insurance company claims "culture" explains why business is better in red states By Andrew Leonard Wednesday, Feb 2, 2011 15:31 ET Could Treasury Secretary Timothy Geithner please send someone over to AIG to slap some sense into CEO Robert Benmosche? I am aware that the man is undergoing chemotherapy in a fight against cancer, but that's no excuse for the remarks he made at an insurance conference in Washington on Tuesday. According to Benmosche, cultural reasons explain why AIG's mortgage insurance subsidiary is doing better in red states than blue states...