AIG Is Causing More Problems

If everybody knows that the Geithner Plan is outright theft of taxpayer money and most economists believe that it has no chance of working, then Geithner must either be stupid or on the take.

At some point soon, the public will collectively figure out the math and AIG death threats will become commonplace in finance-land. I can’t believe I just wrote that last sentence, but when the criminals are running the show (via crooked legislators who are on the take), at some point you would expect the victim of the crime to fight back. I’m not justifying it, I’m just telling you what is coming.

Here are some interesting articles covering the math that I have been covering for the last few months –

The prices of bad loans are too high on the balance sheets of banks
http://zerohedge.blogspot.com/2009/03/ridiculous-marks-of-toxic-assets.html
http://zerohedge.blogspot.com/2009/03/ridiculous-marks-of-toxic-assets-part-2.html

The Fed will overpay for these bad loans that are already priced too high
http://www.ft.com/cms/s/0/b3e99880-1991-11de-9d34-0000779fd2ac.html

Because if they don’t it will bankrupt the banks who lied about what these assets were worth when they filed their last Quarterly Report (10Q)
www.businessinsider.com/henry-blodget-one-small-problem-with-geithners-plan-it-will-bankrupt-the-banks-2009-3

The taxpayer will have most of the risk and the private investor will have most of the upside
krugman.blogs.nytimes.com/2009/03/23/geithner-plan-arithmetic/
http://www.cnbc.com/id/29848741

Anybody with a pulse will be able to sell their stuff to the taxpayer at a ridiculous premium to reality
http://www.bloomberg.com/apps/news?pid=20601087&sid=aMveytRdVHqo&refer=home

Banks are already starting to game the system
www.nypost.com/seven/03252009/business/double_dippers_161157.htm

People are getting pissed
emsjuwel.com/?p=80

It just leaves me with one question – how can you screw over your countrymen and sleep at night? That is addressed to both politicians and bankers.

I think a lot of people are coming to the conclusion that the Geithner Plan is a scam. I am seeing articles about how this plan will harm the taxpayer in many leading newspapers from all over the world. At some point the public will force the politicians to do what is right and support the interests of the taxpayer over the interests of the large corporate donor.

My fear is that the employees of the banks who are bailed out will be tarred and feathered because of the actions of their employers.

I wrote this first thing Thursday morning. During the course of the day, the following occurred –

NY AG Cuomo sued AIG today to get more data on who got cashed out on their CDS at Par
zerohedge.blogspot.com/2009/03/cuomo-to-subpoena-cds-information-from.html

These banks received the AIG money (a direct subsidy from the taxpayer)
nicolasrapp.com/wp-content/uploads/2009/03/aigbailout.jpg

$12.9 billion Goldman Sachs
$11.9 billion Societe Generale (foreign)
$11.8 billion Deutsche Bank (foreign)
$11.3 billion Bank of America/Merrill
$7.0 billion Barclays (foreign)
$5.0 billion UBS (foreign)
$4.9 billion BNP Paribas (foreign)

The NY Times is suing Treasury to see how PIMCO, GS and Blackrock consulted on the formation of TARP and how they got the contracts to manage it
www.docstoc.com/docs/5060636/NYT-Co-vs-US-Dept-of-Treasury

Eliot Spitzer on Goldman Sachs
www.slate.com/id/2214407/?from=rss

Wait until the news hits if PIMCO has been sell-dealing between its own accounts and the TARP money it manages... Potentially making money at taxpayer expense.