Who got the AIG payouts? Reuters reports that a number of large US and foreign banks got $50 billion from the insurance giant.
Where, oh where, did AIG’s bailout billions go? That question may reverberate even louder through the halls of government in the week ahead now that a partial list of beneficiaries has been published.
The Wall Street Journal reported on Friday that about $50 billion of more than $173 billion that the U.S. government has poured into American International Group Inc since last fall has been paid to at least two dozen U.S. and foreign financial institutions.
The newspaper reported that some of the banks paid by AIG since the insurer started getting taxpayer funds were: Goldman Sachs Group Inc, Deutsche Bank AG, Merrill Lynch, Societe Generale, Calyon, Barclays Plc, Rabobank, Danske, HSBC, Royal Bank of Scotland, Banco Santander, Morgan Stanley, Wachovia, Bank of America, and Lloyds Banking Group.
From Wikipedia:
In climbing, belaying is the technique of controlling the rope so that a falling climber does not fall very far. While this task is typically assigned to a belayer, self-belaying is also possible as an advanced technical climbing technique. The term belay is also used to mean the place where the belayer is anchored; this would typically be a ledge, but may instead be a hanging belay, where the belayer is suspended from anchors in the rock. …
The person climbing is said to be on belay when one of these belaying methods is being used. Belaying is a critical part of the climbing system. By using a correct belaying method, the belayer can hold the entire weight of the climber by using relatively little force, and can easily arrest even a long fall. By using a mixture of belaying angle and hand-grip on the rope, a climber can be lowered gently by the belayer to a safe point where climbing can be resumed.
And then there’s climbing without belays, like Alexander Huber.
embedded by Embedded VideoYouTube Direkt
My dictionary says that belay can also be a command: “Used in the imperative as an order to stop: Belay there!”
I recently read somewhere(Belmont Club?) that AIG insures the Congressional Retiement Trust, so AIG will never be allowed to fall.
When lead climbing, you have to climb above your belayer. Pushing a rope doesn’t work well. You need an anchor point above you to be belayed, but you haven’t reached that high yet. The solution is to put in “protection” (anchor points, little spring loaded levers cramed into cracks) as you climb, and run the rope through them. You try to put in a new piece of protection every ten feet or so. That way, if you fall, you never fall more than twenty feet before the rope catches you.
But there’s a danger. If you fall hard enough, the shock can pull out the protection. Then you fall another twenty feet until the next piece of protection catches the rope. Or get’s pulled out itself by the jolt.
The worst case is when each piece of protection pulls out in turn as the load comes onto it, and the lead climber keeps falling, and gaining momentum, until there’s no protection left, just a man falling through thin air towards the nearest rocky ledge. It’s called a zipper.
Belay with me a while
Why won’t ya bemonia
I’ll only delay ya while
As I defloor ya
“I began by emptying all the water that remained in my bottles, and along with those I had already used, placed them in my haul bags, to turn them into makeshift crash mats. The trick was to half unscrew their lids, so the air would escape neither fast nor slow. That way they would neither crumple too quickly nor cause me to bounce over the edge. I positioned the portaledge below the first part of the pitch. If nothing else, this took my mind off the rock beneath, and might even turn a break into a sprain. Lastly I emptied out the water from the bladder I carried on my back like a rucksack, inflating it instead. I knew I’d be too busy to drink. It would save a little more weight, and being inflated meant it might protect my spine.
It’s all an illusion.”
Well is it, or isn’t it?
Of course it went to them. Where else would it have gone, in AIG’s cash account? All those “creditors” were/are counterparties in AIG underwritten CDS trades. Why is anyone acting like it’s a surprise that the govt put money into AIG to preclude AIG’s demise, thereby triggering a massive chain reaction leading to financial Armageddon? But then, when was the AP known for its financial analysis?
Had AIG gone down in September, the world economy would have gone with it in one fell swoop. Since then, it’s just more robbing Peter to pay Paul via AIG. Read Roubini’s last piece if you want to see how broken the US financial system is, and how hard everybody in Washington is working to act like it’s not. Roubini seems to be the only one willing to say so publicly.
Breitbart:
Here is a very good summary of what helped us to get to an isolated spot on the side of the cliff:
http://directorblue.blogspot.com/2009/03/meltdown.html
h/t AJS
I had long wondered who was ultimately receiving all the AIG money. Apparently someone on the inside was none too happy about where the money was going, hence the leak to WSJ. I am guessing the American public will not be to happy to learn of this development (pouring taxpayer money into foreign banks), but perhaps the wider media will ignore the story?
AIG is not belaying.
AIG is bungee jumping.
6. Old and in the way:
You may be old and in the way now, but folks will soon realize they should have been listening to you all along.
I think you have hit the nail on the head. The sub-prime housing problem was always just the visible part of the iceberg.
http://www.youtube.com/watch?v=9pkLDEEs20U&feature=related
http://www.youtube.com/watch?v=4w9EksAo5hY
A reader points to a new species of pundit called the Collapsitarian, who are firmly convinced that the End Is Near.
John Robb, to his credit, remembers the anti-Collapsitarians, who thought that Liberal Democracy had triumphed forever, as embodied in the concept of the End of History.
As for myself, I am unconvinced that the future is heading for any kind of absorbing state. We don’t know what the future holds, because it hasn’t happened yet. But more importantly, it is still awaiting the result of our actions. What will the future will be depends in some part, upon what we decide to do. Our raw material is today. I hope I haven’t put it too tritely, but to quote David Lean’s character in Lawrence of Arabia, which interestingly enough is a commentary on fatalism, fate and Islam.
Alas Wretchard, it more depends on what we are able to do.
Our actions may not be enough. Our actions may be the wrong actions. What can we do other than our best? You have to take your best shot, whatever you think it is. Bush had to do Iraq. Paulson had to do TARP. There’ve been a lot of second-guessers ever since.
The economy is our Apollo 13. We have a lot of options and a lot of tinkering we can do, but we have to make final choices. Maybe they get back alive, maybe they don’t. Whichever, we’re still going to think about it for years, wondering if there were something else we might have tried. It’s true that maybe the best action was no action at all. Let’m all collapse and things will work out just fine. But that seems like surrender to me. If you really think so, though, make your argument now rather than later … with the recognition that someone has to be the decider.
I was opposed to the bailouts from the very beginning because bailouts reward irresponsible behavior at the expense of the responsible. That applies to individuals, businesses, and political leaders.
Bailouts only postpone the day of reckoning; they can’t prevent it. And the longer we put it off the worse it will be.
I convinced myself, at the start of game AIG, that it was a big derivatives player. Derivatives are really just an unregulated (new of course) insurance policy – aIg. Nobody can cover the quadrillions of derivatives which supposedly cancel each other out, but we can bleed USA funds to those who despise USA, foreign and domestic…
Hank Greenberg was a formidable CEO who build AIG into a colossus. Sullivan et al. sought to blame him for AIG woes. But Hank claimed otherwise, as in his written testimony to Congressman Waxman, e.g.:
“Moreover, unlike what had been true during my tenure, the majority of the credit
default swaps that AIGFP wrote in the nine months after I retired were reportedly
exposed to sub-prime mortgages. By contrast, only a handful of the credit
default swaps written over the entire prior seven years had any sub-prime
exposure at all. Based on published information from AIG, AIG net notional
exposure to Multi-Sector CDOs at June 30, 2008 amounted to $80.3 billion, of
which $57.8 billion contained sub-prime mortgage collateral. The mark-to-market
loss on this portfolio at that date amounted to $24.8 billion, of which $21.0 billion
related to securities containing sub-prime mortgage collateral. The total mark-tomarket
loss on the AIGFP portfolio as of June 30, 2008, is $25.9 billion. How did this happen? I was not there, so I cannot answer that question with precision. But reports indicate that the risk controls my team and I put in place were weakened or eliminated after my retirement. . . .
“AIG has more than $1 trillion in assets, including key AIG assets that already act as
security for the $85 billion loan facility. That security provides sufficient
protection to American taxpayers. It was not necessary to wipe out virtually all of
the shareholder value held by AIG’s millions of shareholders, including tens of
thousands of employees and many more pensioners and other Americans on
fixed incomes. Those millions of Americans could have fared better if AIG had
filed for bankruptcy protection, since they would at least have had the chance of
recouping value on their investments in AIG over the longer term. . . .”