A lot of people keep asking why the government keeps bailing out the insurance giant, AIG. It’s been rumored that it’s because AIG insures federal pensions (while that would certainly make sense, given the current political climate, it’s not true).
The rather unsurprising truth, now starting to seep out like water from a leaky boat, is that AIG took a cannonball dive into the same toxic pool as the rest of Wall Street and – this is important – some financial institutions in Europe. All of whom must be reimbursed by AIG for losses. So far, to the tune of taxpayer monies equalling some $170 billion.
Some banks that were paid by AIG after it was bailed out by the government include:
- Goldman Sachs
- Deutsche Bank
- Merrill Lynch
- Société Générale
- Calyon
- Barclays
- Rabobank
- Danske
- HSBC
- Royal Bank of Scotland
- Banco Santander
- Morgan Stanley
- Wachovia
- Bank of America
- Lloyds Banking Group
Federal Reserve Vice Chairman Donald Kohn told the Senate Banking Committee on Thursday that he did not want to identify AIG’s trading partners and tried to justify it by saying this would make people wary of doing business with AIG. “We need AIG to be stable…and I would be very concerned that if we started giving out the names of counterparties, people wouldn’t want to do business with AIG.” He’s deferred the matter to his colleagues, who are going to follow his lead on a committee to discuss “transparency concerns”.
Well, Mr. Vice Chairman, I have one word for you. “DUH!” Nobody in their right mind wants to invest their money with a dipshit. To use the lame excuse about fearing that transparency will “undermine confidence” in the financial system comes a day late and a few billion short.
No, I’m not being mean here. Apparently, while receiving billions of dollars of bailout money – need I keep saying this is our hard-earned tax money? – AIG is also suing the U.S. government over over a disputed $306 million in taxes, interest and penalties for using controversial type of “tax arbitrage” transaction that authorities are challenging across the world.
The United States Treasury has been asked to send someone to explain its relationship with AIG, but poor little Tiny Tim’s inability to coerce Lassie into going out to bring back someone – anyone – to fill his top positions is apparently hindering this. Not that I blame anyone for not wanting to step into this stinking pile of…well, you know.
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