April 24, 2014

Full Text: AIG CEO Ed Liddy’s Letter to Treasury Secy Timothy Geithner on AIG Bonuses

Click for AIG Bonus Letter to Treasury

Click for AIG Bonus Letter to Treasury

More AIG Bailouts Could Add Another $200 Billion to Taxpayers’ Tab

aigtower$30 Billion over the weekend brings current total to $170 billion

An article by the Associated Press this afternoon comes the closest I’ve seen in awhile to explaining, in plain English, why the Federal Reserve and U.S. Treasury seem hellbent on propping up AIG.

AIG, the world’s largest insurer, has tens of millions of customers and operates in 130 countries.  What’s gotten them in trouble is a scam the company ran over the past few years called credit default swaps.  These CDSs were essentially insurance policies sold by AIG and bought by other financial services companies and banks.  What they were supposed to insure were the multitude of mortgage backed securities, aka, the now toxic assets.  Only AIG and other purveyors of these CDSs bet that property values would continue to rise indefinitely – meaning they would never have to pay out on the “insurance” of the underlying investments.  We know today that the bubble burst and AIG didn’t have the cash reserve to come even close to making good on all of its CDS obligations. [Read more...]

Full Text: Joint Statement on Banking System from Treasury, Federal Reserve, Other Government Regulators

Joint Statement by the Treasury, FDIC, OCC, OTS and the Federal Reserve

Washington, DC– The U.S. Department of the Treasury, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Reserve Board today issued the following joint statement:

[Read more...]

Full Text: GM & Chrysler Restructuring Plans as Submitted to U.S. Treasury Dept. Feb. 17

The following two documents were required by GM and Chrysler under terms of federal government loans totaling $18 billion made in December.  With these plans, the two automakers are asking for an additional $30 billion in loans to avoid bankruptcy.  Decisions on further federal assistance will be made by a federal task force led by Secretary of the Treasury Timothy Geithner and Chairman of the President’s National Economic Council Larry Summers.

General Motors Restructuring Plan Submitted to U.S. Dept. of the Treasury (Click for PDF)

Chrysler LLC Restructuring Plan Submitted to U.S. Dept. of the Treasury (Click for PDF)

Statement of Treasury Secretary Timothy Geithner:

“I have received restructuring reports from both General Motors and Chrysler, and they have been posted on the Treasury website. NEC Director Summers and I will be convening the President’s Task Force on Autos later this week to analyze the companies’ plans and to solicit the full range of input from across the Administration on the restructuring necessary for these companies to achieve viability.”

GM, Chrysler To Ask Treasury for More Money Today

Unknown how much more above the government’s previous commitment GM will ask for, but Bloomberg is reporting Chrysler will ask for an additional $3 billion.