Time to Get Geithner under Oath on AIG

Edward Liddy, AIG’s CEO, will testify before Barney Frank’s committee tomorrow (10AM, CSPAN3, and yes, we’ll be liveblogging it).

But after reading the letter Andrew Cuomo just sent to Chairman Barney, I think the guy we need under oath is Tim Geithner. After all, over the weekend Geither allowed himself to be convinced that AIG had to pay out its retention bonuses. But today, we learn the following:

  • [Cuomo’s] Office has reviewed the legal opinion that AIG obtained from its own counsel, and it is not at all clear that these lawyers even considered the argument that it is only by the grace of American taxpayers that members of Financial Products even have jobs, let alone a pool of retention bonus money.
  • AIG was able to bargain with its Financial Products employees since these employees have agreed to take salaries of $ I for 2009 in exchange for receiving their retention bonus packages. The fact that AIG engaged in this negotiation flies in the face of AIG’s assertion that it had no choice but to make these lavish multi-million dollar bonus payments.
  • [N]umerous individuals who received large "retention" bonuses are no longer at the firm [including one person whose bonus of $4.6 million made him one of the top seven receipients of bonuses].
  • [T]he contracts under which AIG decided to make these payments … contain a provision that required most individuals’ bonuses to be 100% of their 2007 bonuses.

Now, presumably, Tim Geithner knew all these details from his conversations with Liddy over the weekend. Hell, he should know the details from when, as NY Fed President, he negotiated the bailout last year.

Yet he came to the American people and claimed we simply had to pay these bonuses. Why?

93 replies
  1. Nola Sue says:

    I know your question is rhetorical. But let me toss in a reply: Because, to paraphrase, we have a government of Wall Street, by Wall Street, for Wall Street.

    Which is why we have Summers & Geithner.

    (Thanks for your excellent job with the sunshine, Marcy.)

    • prostratedragon says:

      Well. But wouldn’t it be good to start getting that established in a concrete way? To me, Geithner’s actions have been clearly unsatisfactory on their face, but there’s a lot of mystery there that needs to be cleared up as well.

      Why would he come with a case that’s so easily challengeable, the hallmark of a pretext? We know from recent leaks and whatnot that at least some of the “bankers” and “traders” are reconfigured extortionists. So, is Geithner their boy, or their hostage? If the latter, then we’ve got a much bigger problem than merely whether he stays at Treasury, imo. But getting him up before an aggressive Congress would be a good way to start finding out.

      • Nola Sue says:

        Absolutely. I agree completely with ALL continuing efforts at sunlight, including time with Geithner under oath.

        My lament stems from how saddened I am by how deep this all goes. I’ve long believed the worst, but I still couldn’t fathom it.

        Change we could believe in, right?

  2. bmaz says:

    Now, presumably, Tim Geithner knew all these details from his conversations with Liddy over the weekend. Hell, he should know the details from when, as NY Fed President he negotiated the bailout last year.

    There you go. Word.

    • sptatt says:

      It’s beginning to seem as if Obama’s not nearly as smart as I thought he was, and considerably politically less clean. Guess we just fell for the hope a dope.

  3. Minnesotachuck says:

    This just in via RSS from the Dealbook blog at the Gray Lady, entitled “Seven Sad Truths About A.I.G.” Here’s #5:

    5. The even greater outrage (yes, there is more) is that the government repurchased at notional value $62 billion worth of securities to unwind A.I.G.’s now infamous book of credit default swaps. This was despite the fact that these were collateralized at about 57 percent of that value. . . This represents a pure wealth transfer from U.S. taxpayers to these banks. Goldman Sachs alone received approximately $5.5 billion in excess value. These payments were another back door bailout that the government should justify. . . As an aside, A.I.G. was quite clever to release this information on Sunday so it would be masked by the outrage over the bonuses.

    I’m going to take a walk around the block. To cool off.

    • Minnesotachuck says:

      More from Dealbook: “Adding Up A.I.G.’s Backdoor Bailouts”:

      Of the $170 billion in government funds used to prop up American International Group, a large chunk has gone to buy soured securities — at full price — from big banks such as Goldman Sachs. . . Though it was somewhat lost amid the public howls of protest over the $165 million in bonuses A.I.G. just paid to employees, A.I.G. also released previously confidential information about how some of its bailout money was used. Part of the cash went to buy securities from banks, which allowed A.I.G. to rip up derivative contracts that were threatening to bring down the firm. . . A.I.G., under the direction of the government, decided to purchase the toxic securities at par, or full value, instead of at current market prices.

  4. earlofhuntingdon says:

    Did Geithner even inquire? These bonuses look like golden parachutes for departing senior execs: the primary purpose is to pay them to STFU about their and the company’s wrongdoing. No leaked tapes for them about yanking grannies’ utility bills so high they can afford only cat food to eat.

    The idea that these are retention bonuses seems flimsy. Many of these actors have left already. And no board member who wants to stay out of jail would vote to continue business as usual.

    As for an orderly shut down of a business that bankrupted the company, allowing the perpetrators of the fraud to manage fixing the problems caused by their fraud will only lead to their burying evidence of their complicity. They certainly won’t point fingers at themselves or cooperate without being forced to do so.

  5. JohnB says:

    What about Eric Holder? Where is he in all of this? Conspiculously quiet, I would say…look, if he can’t find somebody to prosecute, then maybe we need another AG.
    I am truly concerned that our new Pres will be swamped by these events that they cannot and apparently will not control and get on top of and the tide of outrage will swamp what little goodwill is left after the detrius of the financial ruins flots to the surface…

    • JimWhite says:

      Here’s a very interesting passage from The Village Voice, linked yesterday by Digby:

      The other key appointment is Attorney General. A century ago, when powerful trusts distorted the market system, we had AGs who relentlessly tracked and busted them. Today’s crisis is missing, so far, an advocate as dynamic and energetic as the mortgage bankers, brokers, bundlers, raters, and quants who, in a few short years, littered the world with rotten loans, diseased CDOs, and lethal derivatives. During the Bush years, white-collar law enforcement actually dropped as FBI agents were transferred to antiterrorism. Even so, according to William Black, an effective federal litigator and regulator during the 1980s savings-and-loan scandal, by 2004, the FBI perceived an epidemic of fraud. Now a professor of law and finance at the University of Missouri–Kansas City, Black has testified to Congress about the current crisis and paints it as “control fraud” at every level. Such fraud flows from the top tiers of corporations—typically CEOs and CFOs, who control perverse compensation systems that reward cheating and volume rather than quality, and circumvent standard due diligence such as underwriting and accounting. For instance, AIGFP’s Cassano reportedly rebuffed AIG’s internal auditor.

      • phred says:

        Perhaps protecting the financial sector was a key reason behind the choice of Eric “Chiquita” Holder in the first place. That’s a connection that hadn’t really occurred to me until now. Thanks for that excerpt.

  6. earlofhuntingdon says:

    Summers is sticking to his pathetic “We are a country of laws”, and CNN is helping him sell it. “Everybody wants their pound of flesh.” (As if this were blind retribution instead of a critical matter of public policy and incredibly stupid negotiating on the government’s behalf.

    One of MSNBC and AIG’s memes is that it would be expensive too litigate. A bit rich. Another is that many of these players are in London. Last time I checked, the UK had a fairly decent common law system and reasonably well-performing financial regulators. Given the UK’s stake in rehabilitating its financial market, it would probably readily cooperate (unless they though the US would leave them somehow holding the bag). If criminal investigations are in order, there are always extradition treaties.

    • robspierre says:

      Too expensive to litigate? Relative to what? That’s what we need to ask these people.

      It would undoubtedly be cheaper–not to mention emotionally more satisfying–to just suspend due process and “show Mr. Liddy and his associates the instruments of financial transparency”. We’d get a quickie conviction, the numbers to some off-shore accounts, and some income-generating reality TV entertainment. We’d probably recover more money too.

      But that’s not how we do things. We try for justice even if it is expensive and awkward. We litigate.

      Do any of these people REALLY want to disagree on this point?

  7. bmaz says:

    We don’t even know to what degree it would actually be litigation; many, if indeed not most, compensation agreements mandate simple arbitration.

    BSL @10 – Yeah, I don’t want Cuomo either.

  8. Rayne says:

    The opposition party has been oddly quiet in many respects…

    But this afternoon on CNBC, the current ranking minority member of the Ways and Means Committee, Dave “Rubber Stamp” Camp (R-Michigan) said that the bonuses were carved out and protected by addendum(s) to the stimulus bill and embedded in it, that Republicans protested this clause.


    Wish I remember seeing any such objection; the objections I saw most frequently from the opposition party were about mice and rails-to-Disney/Vegas.

    • cbl2 says:

      have been thinking about their abject ineptitude in this case

      AIG Bonuses is a huge ‘get’ at a very dark time for them.

      I understand they were complicit with Paulson, (like that’s ever stopped ‘em)but the fact that their oppo hasn’t figured out what Jane has figured out in her Dodd post and not to be tarring Geitner with it 24/7 really shows how anemic, inept, and scattershot their efforts are – they really miss them some Big Daddy don’t they ?

  9. AlbertFall says:

    Absolutely get Geitner under oath.

    Also, bring the AIG board of directors down under oath.

    Did they investigate why credit default swaps were mispriced?

    Clearly, AIG took in too little premium for the risk it took.

    Was that because the CDS were mispriced by mistake? Or because the execs who got bonuses wanted to drive up sales by selling them cheap?

    Either somebody at AIG was crooked, or stupid–Has the board decided which?

    And why pay a bonus to somebody crooked? Or stupid? Or both?

    • bmaz says:

      Either somebody at AIG was crooked, or stupid–Has the board decided which?

      No. They are too stupid and crooked to do that.

  10. FormerFed says:

    My natural inclination to give people a chance for a little while is rapidly dissipating in regards to the Obama Treasury, et. al. team. We need to start charging some people with breaking some laws.

    The BS on breaking contracts is especially galling. The auto workers sure changed their “contracts”. There are ways to get this done if someone in our govt. has the gonads to do it.

    • readerOfTeaLeaves says:

      Question for you: given the following facts:

      1. Geithner still doesn’t have the full staffing he needs, and it sounds like he’s very short at the level just below him, and

      2. Geithner is the person who first walked into the brokerage/banks in Sept 2008 and got the first, good look at the nature, extent, and levels of toxicity, I’m thinking that Wall Street wants Geithner’s ass on a golden platter because he’s seen their dirtiest laundry.

      If #1, then add on the fact that he’s probably been working too hard for too long.

      Am I close on any of these hunches, d’ya think?

        • readerOfTeaLeaves says:

          I suspect that JohnLopresti @38 has shed quite a bit more light than most of us realize. I’m off to listen now.

          I suspect there’s an odd mix of expertise, rarified social and financial altitudes, and far too much ego in the mix.

          But still, as I watch TheFastBlurOfEvents, it looks to me as if Wall Street wants Geithner’s ass on a platter.

          Evidently, Paulson knocked Corzine out of the #1 spot at Goldman by bringing derivatives into GS. Now add to that fact that Paulson was the guy ramming through the whole TARP with his 3 -page memo last Sept about how ‘you will not question ANYTHING that I do’, and I’d say Geithner’s getting squeezed by someone.

          Now, for all the GOP bullshit about how they didn’t have any roll in this crap, I hope Nancy Pelosi holds up that old 3 page Edict from Paulson before their dazzled eyeballs.

          • robspierre says:

            This seems overly generous to me. People do not commit heinous crimes–financial or otherwise–because they inhabit a rarified social stratum. There has to be bit of evil, a bit of the arrogance that says that “rules don’t apply to me,” a bit fo the original Lucifer spirit. And this looks like a crime.

            If Geithner is honest, his only hope for his reputation is to get all the facts out and show the world that they add up to something other than a crime. So why isn’t he doing it?

            • readerOfTeaLeaves says:

              I agree that people do *not* commit crimes simply because they inhabit a rarified social stratum. I also think that arrogance — because it has the effect of putting on subtle ‘blinders’ — is often (inadvertanly, or otherwise) a factor in bad judgment that in turn leads to bad decisions.

              I also agree that there are criminal activities going on in this market meltdown. However, I’m not yet convinced that Geithner is in any way complicit. I think it more likely that he’s overworked and has too much on his plate.

              Paulson, IMHO, was a genuinely arrogant man who made some big, big mistakes. The problem for Paulson is that his mistakes helped his pals make a tremendous amount of money, which makes his actions appear suspicious.

              I don’t yet have enough info about Geithner, other than the fact that I am convinced Wall Street is out to get him because he has a lot of dirt on them. And another staff change at the head of Treasury does not sound like a good thing right now.

              Do I agree with his economics? Quite possibly not?
              I think that he’s up against huge criminal activity, and he has to be extremely careful about what he says — the result is that he doesn’t come off well in the media.

              We’ll see over time how it all plays out.

        • jdmckay says:

          no one is close enough to Geithner’s work to check what he’s doing

          Why would you say that?

          Geithner was co-creator of TARP I. And AFAIC his work since then is pretty much the same, w/a few stylistic tweeks. I suspect everyone in Bush’s Treasury knows exactly what Timmy’s doing, as do the holdovers still there.

          And from what I’ve gathered, BO has spent more time (both since inageration and before) on econ matters w/Geithner (and rest of his crew) than rest of his cabinet combined. Hard to imagine BO not only knows what he’s doing, BO thoroughly supports and endorses this stuff.

          Although the way things are starting to look in this WH, wouldn’t surprise me if BO cuts him loose at some point and distances himself from Geithner’s actions… as implausible as that seems. Kind’a reminds me of you knoW Who.

        • timbo says:

          But that means that there is no one to fall on the sword but Geithner. You gotta look a the silverlining on this sort of situation!

    • ShotoJamf says:

      My natural inclination to give people a chance for a little while is rapidly dissipating in regards to the Obama Treasury, et. al. team. We need to start charging some people with breaking some laws.

      My patience is at an end. I second the motion.

      • MarkH says:

        We need to start charging some people with breaking some laws.

        My patience is at an end.

        Good thing you’re not the guy in charge of fixing the economy, eh?

  11. Mary says:

    8 – Last I saw of him, Holder was over selling the EU on taking some GITMO detainees off his hands. He was also promising them that they, unlike defense counsel and courts here in the US, would get “full files” on the detainees.

    Re Cuomo’s letter – this is why it is so important to not have state AG’s cut off a the knees, the way Congress cut off the State AGs who wanted to go after telecoms for violations of state privacy laws in the warrantless wiretaps.

    In any event, his letter is interesting in that it makes a lot of references to what is really in the nature of equitable, versus legal, arguments. But that’s ok – equity is the heart and soul of the law. If Geithner’s crew at Treasury didn’t find any “legal” recourse you have to wonder if they bothered to look at equitable recourse, which is in part what Cuomo is referencing.

    The most reliable legal yardstick ever develope has been retained through the generations. It’s the “smell test.” AIG’s transactions don’t pass that test.

    There is “legal” recourse that IMO might apply as well, once you get the facts aligned. If NY law applies, they do have the Uniform Fraudulent Conveyances Act there, which does not rely upon any formal bankruptcy filing to have application. An example of what might be a possible application:


    Pretty importantly, the UFCA also has a nice catch all provision, for non-enumerated circumstances:


    Cases not provided for in article. In any case not provided for in this article the rules of law and equity including the law merchant, and in particular the rules relating to the law of principal and agent, and the effect of fraud, misrepresentation, duress or coercion, mistake, bankruptcy or other invalidating cause shall govern.

    I know it’s not nearly as sexy as, oh, say wiretapping a governor or disappearing a stray Canadian to Syrian torture while his children cry for him at night, but some basic grounding in equity, principal and agency, contractual defenses, unconscienability, fraud, etc – well, let’s just say the reason the law has been around for as long as it has is that it does provide avenues for you to get where you need to go.

  12. freepatriot says:

    I figured out a way to stop this

    anybody object to AIG employees paying a 110% tax rate ???

    get a $10 million bonus, YOU OWE US $11 MILLION IN TAXES, MUTHERFUCKER

    do that, and getting bonuses from AIG could cost people a fortune

    and AIG would kinda have a “human Resourses” problem

    anybody think a jury is gonna care about AIG ???

    • MarkH says:

      I figured out a way to stop this
      anybody object to AIG employees paying a 110% tax rate ???
      get a $10 million bonus, YOU OWE US $11 MILLION IN TAXES, MUTHERFUCKER

      anybody think a jury is gonna care about AIG ???

      Clearly there are some people who still WANT to trash the economy. Couldn’t possibly be Obama supporters. Must be Republicans.

  13. Mary says:

    9- the best answer for Summers is to say, “Are we prosecuting CIA torturers? Get back to me on that and you’ll answer your own question”

    But more to the point, depending on the circumstance, nullification for fraud is what happens in a nation of laws.

    Fraudulent conveyance law has been around forever, so have actual and constructive fraud as defenses to contract, so have equitable defense, etc.

  14. reader says:

    There are no ”full files” on the GitMo detainees ~ but you know that Mary ~ and if Holder doesn’t know that yet then I do wonder just what they did to him during his GitMo tour.

    I really loved that phrase ”fraudulaent conveyances” from the first I heard of it: I thought, now we may be getting somewhere honest.

  15. Citizen92 says:

    One of AIG’s subprime units settled with the Office of Thrift Supervision over inappropriate loans to some borrowers and excessive fees.

    Wilmington Finance Inc., a Plymouth, Pa.-based subsidiary of American International Group Inc., provided extensive loan-origination services for AIG Federal Savings Bank from July 2003 to May 2006.

    The bank, however, failed to manage and control its activities in a safe and sound manner and didn’t consider consumer-protection issues appropriately, the OTS said.

  16. Citizen92 says:

    What did AIG do with AIGFSB’s crap-pile loans underwritten by Wilmington? In portfolio? Securitize and sell to Wall Street?

    2005 HMDA data showed that AIGFSB was #27 in dollar volume for mortgage lenders doing refinancings.

    • Citizen92 says:

      Did AIG have to settle some counterparty claims using TARP funds with itself because of its AIGFSB and Wilmington loans?

  17. Mary says:

    25 – Oh, Cuomo himself – he’s a political creature, I’m not going to hang any stars on his personal door.

    The broader point of powers and facets available to state AGs and using state AGs as a check on Feds out of control was the one I was trying to make (and a vice versa application for that matter, as we did in civil liberties contexts back when our fed DOJ had a civil liberties agenda) And yes, the state guys can and do politicize faster and more publically as the downside.

    I do think that something like the actual financial payments info in such a large company isn’t something that I tend to think of as the kind of privileged info that necessarily shocking to have come out, even if he did have to use GJ subpoenas to get it. Sure, the recipients themselves may even have had confidentiality, but at some point sharholders and investors are pretty much entitled to that kind of info imo. Still, it’s not all that respectful of the GJ process, is it?

    • bmaz says:

      Oh, I agree that it is, and should be, public info because, if for no other reason, the public investment to 80% ownership. Heck, I could even be content arguing it was a justified release in the face of a GJ rule (I am assuming NY has such a rule). Just kind of pointing out what had occurred.

  18. rkilowatt says:

    Orwell’s Animal Farm ends…

    ‘The creatures outside looked from pig to man and from man to pig, and from pig to man again: but already it was impossible to say which was which.’

    The popular impulse for “change” was essentially the desire to correct rampant injustice/unfairness. Just as fast as the new leaders became effective, so they became the target of the former misleaders, whose counter-intention was to regain and keep their lordly status.

    Pigs being very intelligent, the barnyard creatures selected them to be their leaders. In turn, the pigs became targets and were successfully turned and brought under the mis-leaders’ control.

    BTW,I refer to Animal Farm the book. Movie rights were bought by the CIA and story changed. The ending, above, was too dangerous to go unchallenged by our very own mis-leaders, who were targeted and turned…

  19. prostratedragon says:

    A timeline entry (may as well throw a few out there):

    Sept. 12—15, 2008.

    AIG Scrambles to Raise Cash, Talks to Fed
    Insurer American International Group Inc., succumbing to relentless investor pressure that drove its shares down 31% on Friday alone, is pulling together a survival plan that includes selling off some of its most valuable assets, raising more capital and going to the Federal Reserve for help, people familiar with the situation said.

    The measures are aimed at staving off a downgrade by major credit-rating firms. AIG executives worried that such an action would set off a chain reaction that could be fatal to the firm. The insurer, which has already raised $20 billion in fresh capital so far this year, … [article h/t NakedCapitalism]

    So this is AIG’s first actual inroad to the feds, with the deal finalized on last Sept. 17. “The Federal Reserve” (Board of Governors [Bernanke]? New York branch [Geithner]?) brought in You Know Who and You Know Who Else as consultants.

    The Wikinvest article calls this Phase I of AIG’s bailout, but that disregards a long phony war phase that preceded it, per i.e. the $20B mentioned by WSJ. I seem to recall the insurance commissioner of New York State as involved in quite a bit of that phony war, in which you could say that AIG maybe was using a few other firms that since seem to have resolved their immediate problems as camouflage.

    All this remains impressionistic until someone, possibly me, gets around to checking out the smattering of events from spring and summer last year more thoroughly; I seem to recall that of bloggers, Yves Smith had an eye on the situation earlier than most, and sometimes also CalculatedRisk and iinm Felix Salmon and/or Barry Ritholtz, so those might be the most fruitful archives.

    • prostratedragon says:

      Looks like it’s AIG Day over at TPMuckracker, too. That period I called the phony war up above? Looks like the feds think so too:

      Zachary Roth quotes ABC:

      In Securities and Exchange Commission filings, AIG acknowledges that it is under federal scrutiny for possible fraud, and notes that it is cooperating with the government’s probe.

      Investigators are looking at statements from company leaders, who sometimes painted a sunny picture, even in the months and weeks before financial implosion.

      Meanwhile, Roth also reminds us that the Serious Fraud Office in the UK is looking at AIGFP since Feb., regarding practices under Cassano.

  20. JohnLopresti says:

    I used to have some interesting conversations with the product designer in a national insurance cluster of companies at which I worked fleetingly. He was the iconoclast in the outfit, creating most effectively his new products in the privacy of his own research space, evidently at his home, instead of trying to get work done in the office with a hundred puffing “producers” and actuaries churning out code and market predictions. It is something of an astuteness exercise, like the best traders. I learned esteem for Wall Street and respect for the Democratic Party’s frequent success with stimulating the economy in ways Wall Street enjoyed.

    Though perhaps mentioned in the prior thread on AIG, I would like to offer a link to the 45 minute interview yesterday with Terry Gross and Gretchen Morgenson. Gretchen walks the listener thru the 3-star and 2-star rating transition of AIG in the period 2005-2007, and glosses slightly the product design group leader who earned $1 million/week consulting fee from AIG even as AIG began to visualize financial collapse of mortgage based derivatives and swaps.

    At one time in my mercuric career I had chats with Steve Jobs and Steve Wozniak over a few weeks, and found Gretchen’s comments in the linked program from yesterday reminiscent. The wizards and witches of the business operate in a rarefied atmosphere which is predominantly based upon their genius, and only sometimes relates to bricks and mortar tradition. The neat thing about Morgenson’s view, I thought, was her hope to see more regulation, to remove clearinghouse certifications from the position of ultimate word on viability of a company’s portfolio. The products designers are elusive and mystical in their vaunted intellectual acrobatics. Still, I could imagine some funny questioning sequences if a few of those generously remunerated folks were to appear in congress. Geithner simply has to talk the Street’s talk, as he is from their overseer’s part of the economy. It probably would be like taking the 5th amendment, but these guys are going to have to say something about trade secrets…though the crest was passed, and now it is time to reregulate, or some such.

  21. reader says:

    Quite apart from everything else, Geithner just isn’t a good public speaker. It’s not just nerves. He is talentless in this regard. But isn’t this part of the job? Not the whole just, but surely part of the job in this day and age. To be somewhat camera friendly. He really comes across badly, empty.

    Now that I have the sense that he is lying or doesn’t have enough of a clue it looks worse to me.

  22. mookieblaylock says:

    billions, that’s chump change. The real action is the trillions that these companies are getting.Quick look over there!….there goes another trillion

  23. perris says:

    Yet he came to the American people and claimed we simply had to pay these bonuses. Why?

    because he knows the envirnment is rich with positions he is qualified and he no longer wants to have the position he now holds, yet doesn’t want to quit so is doing whatever it takes to get us to fire him, this way he can collect unemployment benefits?

  24. mamazboy says:

    Can we just say it? Geithner is an abject failure, a classic case of the fox in the henhouse. He’s been missing as a force in this whole mess probably because he’s benefited from it, or at the very least is bosom buddies with the Wall Street gang of thieves and thugs who have arranged our economic downfall. Time for Obama to take a long, hard look at this guy and get him gone.

  25. gussmith says:

    This article does not support the assertion that the bonuses are voidable. Just the opposite, it appears that the bonuses are the pay that was negotiated. One dollar plus the bonuses. Not what I want to hear so let’s get the pay status clarified.

  26. Nola Sue says:


    Is this the kiss of death? “Robert Gibbs said Tuesday that President Barack Obama has confidence in Geithner and the Treasury Department’s oversight.”

    The past 8 yrs have left a Pavlovian reaction that this must be a precursor to “buh-bye” and now things are (supposedly) different. But…

    • cbl2 says:

      uh huh – thought the very same when I heard the President express his “full confidence” in the Secretary

      just to be safe, I’ve got mid-sunday afternoon in the “resigns in the best interests of the nation’s recovery” pool

        • cbl2 says:

          my initial guess as well, but that gives the chatterati all Sunday morning to bloviate.

          p.s. has it already been reported here today that WH is waffling on releasing stress test results ?

          • phred says:

            Good point. I imagine the WH is up to their eyeballs in bloviating already, they won’t be keen on setting up a blistering chatterfest for Sunday.

            I haven’t heard anything about stress test results — what news?

      • Styve says:

        Though Brown was completely inept in the handling of the Katrina crisis, there is evidence that he was set up to take the hit for the destruction of New Orleans, as a way to neuter him for trying to get Chertoff fired soon after Chertoff approved the Dubai Ports deal, and to initiate an overhaul of Homeland Security. His horse racing background and awareness of Dubai’s major role in horse racing and the diamond industry, and potential money laundering, made him dangerous to the Bush family. 1

        1 Madsen, W. Overthrow a Fascist Regime on $15 a Day, Walterville, OR, TrineDay, 2008

  27. Gitcheegumee says:

    Paulson Was Behind Bailout Martial Law Threat Senator James Inhofe has revealed that Henry Paulson was behind the threats of martial law and a new great depression prior to the passage of the bailout …
    http://www.prisonplanet.com/paulson-w…..hreat.html – 128k – Cached – Similar pages

    YouTube – Paulson Was Behind Bailout Martial Law Threat Thursday, November 20, 2008 Senator James Inhofe has revealed that Henry Paulson was behind the threats of martial law and a new great depression prior to …
    http://www.youtube.com/watch?v=_KMNE8dNOfQ – 114k – Cached – Similar pages

    Paulson Was Behind Bailout Martial Law Threat : business Nov 20, 2008 … Declaring martial law is the same as declaring war on the citizens of this country. The federal government does not have this authority and …
    http://www.reddit.com/r/business/comm…..aw_threat/ – 138k – Cached – Similar pages,————-

    Geithner helped plan the original bailout-and here’s how Paulson marketed it- [see above links]

  28. puppethead says:

    Obama surrounded himself with University of Chicago Milton Friedmanists, what a shock that he’s totally on board with this unregulated transfer of wealth to the banker barons. He’s been weak on economics since day one, listening to the wrong people.

  29. Gitcheegumee says:

    reader of tea leaves @42,#56 is for you in regards to Paulson’s 3 page ,no questions asked memo-plus the threat of martial law.

  30. oddball says:

    Way, Way OT


    I won a judgement in a Michigan court and need to file a Writ of Execution.

    Should I format the filing like a motion or is there a specific court form for me to use?

    I appreciate any professional help I can get….

    Help me MT

  31. Styve says:

    I know a right-wing freak who lauded Obama’s selection of Geithner and Summers during the transition. What a maroon!!

  32. smith9898 says:

    I think there should be hearings on this entire AIG matter and all should be under oath when testifying. There should be tough questions asked from the head of AIG to those who took the bonuses period. At the same President Obama must be prepared to ask for the resignation of Geihner and Summers cause they are already shown me there true colors. They will prove to be a problem in the future in working against Obama period. In addtion while he looking at afganistan he must think about relieving GATES,ORDERNO,PETRAUS and any other persons of his national security team otherwise we will be in both Iraq and Afganistan for a much longer stay.

    • MarkH says:

      Obama period. In addtion while he looking at afganistan he must think about relieving GATES,ORDERNO,PETRAUS and any other persons of his national security team

      Not only are Republicans saying Obama & team are doing badly, they are also calling for BO to fire this one or that one.

      What a joke. They just want Obama to fail. They DON’T care whether America succeeds.

  33. Gitcheegumee says:

    FINANCE-US: AIG’s Past Could Return To Haunt *This is the first of a two-part series on how AIG helped clients cheat on taxes. New York journalist Lucy Komisar reported on the AIG story as part of her …
    ipsnews.net/news.asp?idnews=45175 – 56k – Cached – Similar pages

    Lucy Komisar – Wikipedia, the free encyclopedia Lucy Komisar is a New York City-based investigative journalist. … “AIG’s Offshore Strategies Hide a Scam,” (part 2) Inter Press Service (IPS), Dec 19, …
    en.wikipedia.org/wiki/Lucy_Komisar – 38k – Cached – Similar pages

    For The Record: Repost: FTR #531 Interview with Lucy Komisar about … Sep 23, 2008 … (Note that the material on AIG was drawn from Lucy Komsar’s two articles written for AlterNet: “The Fall of a Titan” by Lucy Komisar; …
    ftrsummary.blogspot.com/2008/09/repost-ftr-531-interview-with-lucy.html – 357k – Cached – Similar pages

  34. JohnLopresti says:

    reader @42, in 1983 the insurance product designer was a jovial 30ish adult with a lithely corpulent appearance, starch in white collar, blonde 3-1/2′ hair. I helped with IT for his remote office. The mystic pantheon of the Steves was at the time ew was helping set Ibm aright and riding Harleys. That, too, was a kultcha of change.

    • readerOfTeaLeaves says:

      It was a kulcha of change, indeed. I missed a lot of it, being outside US; when I returned, people were eating ’salads’, which I had no memory of their ever doing before ;-))

      I’m about 26 min into the Morgenstern interview and am shocked to learn — how did I miss this before?! — that the Credit Ratings Agencies claimed ‘privileged information’, upheld in court cases, to the ‘privacy’ of their information. Protected by the First Amendment, no less, to protect their incompetent opinions!

      This does, however, underscore the notion that Geithner may not have known about the spectre of the trouble until he went into the brokerages in Sept 2008. That may have been the first time that he got a full, ugly look at the crappy butt-covering done by the ratings agencies.

      This isn’t the first time that we’ve seen problems tracing back to the ratings agencies, but clearly that was a critical factor.

  35. JohnLopresti says:

    Reader @79, I thought it begged for a Timeline as the narrative developed in that interview. Gross has guile.

  36. reader says:

    If Geithner is as he appears, one of the financial elites, then he doesn’t perceive these circumstances as remotely criminal. If he is as he appears he is part of the culture, the same culture that ignores things like Madoff, Enron, and lying to Congress about personal earnings.

    And this is the root of the problem with Geithner and the greater problem of the whole mess. These characters don’t see this as evil or wrong or criminal.

    No, they see it as successful, clever, and wealth-creating.

    They ’earned’ their bloody bonuses. In their minds.

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