How the Fed Bungled AIG's Rescue, Enriched Bankers and Screwed Taxpayers

But that wouldn't be government's or Wall Street's style. Rule #1, only do the deed if you can screw the public and make bank. Rule #2, pretend that issues are so complicated that John Q. Public just wouldn't get it. Rule #3, hide behind Ivy League pedigree. Rule #4, rinse and repeat.

The fed should be lynched. Where did all the money go? Can i get a list of everyone AIG payed out to?

BERNANKE IS A CROOK . OH ME. DID I SAY THAT?

JPM rob WaMu in front of your face and get away with it . A record profit in 2009 + $55 Millions big bonus paid for CEO Dimon , while other banks' CEO pay cap 90% ...... This is pretty wild http://www.youtube.com/user/testorx2

How about the WaMu deal?.....The treasury handed over all of the assets to JPMorgan Chase, and ate all of any debts or bad assets. Chase then in turn absorbed all of the assets, exterminated thousands and thousands of good WaMu employees (not to mention shareholders). Someone please tell me how that was a good deal for taxpayers? It left Jamie Dimon and shareholders looking like genius'.

I think everyone would feel alot better if they really punished bernanke and paulson with treason. Everyone knows they robbrd the country to pay GS and the other owners of the fed. Just give them the death penalty for treason and everyone will tow the line and the masses will chill out

The FDIC seized Washington Mutual Bank saying there had been a bank run amounting to 16.7 billion dollars in 10 days. The reason this money was withdrawn from the bank is unknown. The FDIC saw money moving out of larger accounts and assumed a run was in progress. Just 2 weeks before the FDIC seized the bank WAMU had worked out a solid business plan with the OTC (Office of Thrift Supervision). At the time of seizure, WAMU had access to $50 billion in assets: sufficient liquidity to handle all their obligations. The situation, however, seemed different to the FDIC, whose reserves were low as a result of not collecting insurance premiums from 1996-2006 and the bank failures in the previous weeks. Appointed officials at the FDIC were concerned that if the failure of Washington Mutual was followed by other bank failures as well, the agency would not be able to handle the situation. Despite this concern, the FDIC had the ability to borrow $30 billion from the Federal Reserve; however, for some reason it did not do so. The FDIC’s move was more about protecting the federal deposit insurance company than about protecting the insured. In short, the FDIC acted prematurely, behind closed doors. The Washington Mutual Executives had no prior knowledge of the FDIC’s plan. In fact, at the time of the seizure WAMU was in the midst of sale negotiations with several other banks, and had been given no deadline by the FDIC to find a buyer. Despite WAMU’s good-faith efforts to find buyers, banks which were contemplating buying Washington Mutual had been notified by the FDIC that the FDIC was to auction off the bank, again without WAMU’s knowledge. This FDIC action prevented a sale from being made. Even worse for WAMU, behind closed doors, the FDIC was offering prospective buyers a much sweeter deal than the ones WAMU was negotiating. The FDIC arranged for JPMorgan to purchase the $300 billion dollar corporation for the bargain price of 1.9. The FDIC needs to be held accountable for its short sighted action which has caused havoc throughout world markets. The FDIC had many options in the event that WAMU faltered. The option chosen, seizing the bank and selling it overnight for a miniscule fraction of its value in a clandestine deal with JPMorgan, was the worst of any options they had. Did the FDIC act appropriately? Most shareholders don’t think so and they want the FDIC to answer for that. The result of the FDIC’s hasty and secretive action was that the shareholders of Washington Mutual Bank lost billions of dollars. Shareholder portfolios were emptied overnight - because of collusion between the FDIC and JPM in weeks leading up to the seizure. Now, shareholders seek redress. Never has the law been applied with such disregard for its intention. Government regulators, supposedly the ones responsible for protecting us, circulated insider information about the bank to its competitors and precipitated a catastrophic collapse whose repercussions are still being felt today. Coincidentally, JPMorgan has been the institution which has profited handsomely from these failures. Coincidentally, the former head of the SEC (Securities and Exchange Commission) whose role is to oversee stock trading, works at JPMorgan, and this week was accused of private conversation causing difficulties that may have resulted in another recent bank failure, that of Bear Stearns. JPMorgan has also been accused of interfering in Lehman Brothers’ access to $5 billion dollars which helped catapult their demise. And the company has been accused of denying WAMU access to $5 billion dollars they had on deposit with JPMorgan.

I say let Tech Ticker pick the guest shill of the day, and the poster's ask the questions. No more lobs to the shills. Can you read this one Tech Ticker? No more lobs. Let the posters ask the questions!

FDIC (the Federal Deposit Insurance Corporation) and JPM (JP Morgan) prior to the seizure of Washington Mutual bank. Shareholders contend: 1) that these actions were unjustified 2) that they were unethical 3) that Washington Mutual Bank was not failing. As evidence of our claims, reports now surfacing indicate the liquidity of the bank was much better than the public was led to believe; by most accounts, the bank had enough funds to cover the withdrawals by depositors. Washington Mutual executives knew these facts; however, their claims made days before the seizure that the bank was in good health were ignored. We the concerned shareholders of WAMU contend that the FDIC was not right in doing so and has caused irreparable harm to the WAMU stockholders, to the banking community and to the markets in general. As a result of this action, shareholders of thousands of companies throughout the world have lost trillions of dollars since.

America has increasingly become a crony capitalism. Henry Paulson was CEO of Goldman Sachs before running the Treasury. So Paulson knew that by bailing out AIG, he rescued his fellow banksters at Goldman. Geithner failed big time as a Fed governor, failed to pay taxes, and then was promoted to head of Treasury. Mr. Obama, fire Mr. Geithner or return my vote. No wonder why the IRS has over 100,000 cases of potential fraud regarding first-time home buyers credits. Regular folks "reason" that they can be "promoted" by cheating like Mr. Geithner did.

Goldman Sachs. you never have to look any further once you hear that name. 3.9 bilion this quarter? More than they've ever reported in a time when EVERYONE is hurting? How much money did they get from the FDIC? Go research that, because the only answer you'll get from BOTH institutions is "none of your business" I'm not kidding.

You guys are about 9 months too late to the story. Everybody in the business knew AIG was saved for the explicit purpose of not letting Goldman and Morgan fail. The rumor was both were two/three days away from going under. Puts the entire bailout in perspective--TARP was just the window dressing. What really saved the I-banks was FDIC backed debt and the AIG conduit. Knowing they are backstopped and will never be shut off from (taxpayer-backed) capital, Goldman just bet the farm and had a record year. For them it was win-win; they couldn't lose either way.

HEY EVERYONE, CALL YOUR LOCAL BANK AND SEE HOW MUCH THEIR BANKS FDIC INSURANCE HAS GONE UP THIS YEAR........+2000% INCREASES!!!!!!!!! NEVER HAVE SO MANY, BAILED OUT SO FEW!

YFU 12:09 is dead on the mark. People think they own their houses - HA - the bank owns you. You go to work every morning for the bankers, but they do let you have a few shiny things though so that you'll think otherwise. Not only that, the taxman is into you house owners more and more each day too. But it's okay, just go shopping or turn on the TV and forget about the lie of the ownership society.

HENRY PAULSON & GOLDMAN SACHS ARE THE MASTERMIND BEHIND AIG BAILOUT AND OTHER STOCK MARKET MANIPULATIONS IN THE PAST, PRESENT AND FUTURE. TIM GETHNER IS AN IGNORANT MAN ABOUT US FINANCIAL SYSTEM AND IN FACT HE DOES NOT HAVE ANY FINANCE OR ACCOUNTING BACK GROUND. HE IS NOT QUALIFIED FOR THE JOB AT ALL. FED HAD WASTED OUR TAXPAYERS $$$. FED NEED TO INVESTIGATE GS ILLEGAL BUSINESS PRACTICE.

Yes, Giethner, IS as clueless as he looks in this photo. One day he'll be in jail, where he, Bernie Baby and Paulson all belong for subverting the Constitution and treason.

Lucky - Tuesday October 27, 2009 12:29PM EDT I think everyone would feel alot better if they really punished bernanke and paulson with treason. Everyone knows they robbrd the country to pay GS and the other owners of the fed. Just give them the death penalty for treason and everyone will tow the line and the masses will chill out...**************Wrong Lucky. They only give the death penalty for serious crimes like, um, smoking a joint or stealing a loaf of bread for your family. Let's not even pretend to think that ANYONE ANYONE ANYONE responsible for the greatest theft in the US's history will be touched by Justice.....All "law enforcement " ( Ha Ha ) agencies are whores of Wall Street, the White House and Congress...........!!

...oh, BTW, nice job, Fed, on eliminating most of Geldmensch Sux' competition in the process of "saving" the economy.

I repeat my contention that Tim Geithner is not a bright person. I really wonder how he got past high school. This guy is simply a dumbass. Clearly, the right way would have been to have the banks take a massive haircut from AIG and then, we the public can shore up the banks by giving them more money but taking control and making exisitng claimants on the bank also take a haircut for investing in stupid, greedy management who simply steal shareholder capital. By doing so, we could really have fixed the big TNTF banks and broken them up and then given them back to private hands. This is the one area where I have completely lost faith in Obama - he is in over his head on this and as a lawyer, he would have been told this is too complicated for him to understand and that he is better leaving it to the experts, who messed up in the first place. Such experts include the jerk Larry Summers. Obama would have been served much better by bringing on Paul Krugman, who has more intellect and is more logical and rigorous that Summers who blows with the wind to make money.

I repeat my contention that Tim Geithner is not a bright person. I really wonder how he got past high school. This guy is simply a dumbass. Clearly, the right way would have been to have the banks take a massive haircut from AIG and then, we the public can shore up the banks by giving them more money but taking control and making exisitng claimants on the bank also take a haircut for investing in stupid, greedy management who simply steal shareholder capital. By doing so, we could really have fixed the big TBTF banks and broken them up and then given them back to private hands. This is the one area where I have completely lost faith in Obama - he is in over his head on this and as a lawyer, he would have been told this is too complicated for him to understand and that he is better leaving it to the experts, who messed up in the first place. Such experts include the jerk Larry Summers. Obama would have been served much better by bringing on Paul Krugman, who has more intellect and is more logical and rigorous that Summers who blows with the wind to make money.