CJR quotes Bloomberg, establishing that some of the excuses used by the Fed for refusing to negotiate for reduced payments to AIG's counterparties is a fiction.
French law didn’t stop Societe Generale and BNP Paribas SA from taking $1 billion to settle $3.5 billion of trades the same month with New York-based bond insurer Ambac Financial Group Inc., according to three people familiar with the matter. Ambac’s ability to negotiate a discount while the central bank of the world’s biggest economy didn’t adds another question for lawmakers as they examine the most contentious transaction of the government’s bailout of the U.S. banking system.28.5%? I may be missing something, but to my eye that's quite a bit less than 100%.
Question number one for Geithner, whom Bloomberg helpfully points out is testifying before Congress next week, ought to be to explain that and to justify his statement to the SIGTARP.If he's asked, and unfortunately that's a big "if", expect a blizzard of words that attempt to run out the clock on whomever is asking the question. Why is it that I doubt that he'll admit that it was a back-door bailout that provided massive benefits to banking institutions like Goldman Sachs.
AIG tried to persuade its counterparties to accept payments of 60 cents on the dollar before the New York Fed took over negotiations, according to people familiar with the matter.OPM.
Update: More from CJR on a significant effort to cover up the backdoor bailout.