Jim Cramer (I know he's a Con Artist) but he just said A.I.G paid off Foreign Banks with Our Money

[KoKo]

I normally wouldn't post stuff by Cramer...but this one was interesting. Is that why Paulson pulled the rest of the T.A.R.P? Did Congress find out that it went to pay off Foreign Banks and so they "behind the scenes put a "collar" on Paulson? "NO MORE MONEY...you wasted the FIRST BATCH!"

To be fair about Cramer (scum, carny barker that he is) he did warn folks that the market was going to go through some rough times back in Augus of 2007. He had a "You Tube" that circulated around about his comments about "THEY KNOW NOTHING!" that got quite a bit of play and allowed many to start to get concerned enough to watch their 401-K's and IRA's more closely. He's had other warnings since, but they seem to favor "Traders" more than the rest of us.

Anyway, throwing it out there. Maybe some lawsuits from investors and taxpayers wanting to know what exactly A.I.G. really did with that money might be coming down the pike in the next year or so. :shrug:

[Demeter]

1. AIG Paid The Squeaky Wheels

and the foreigners were very squeaky. You see, they get real news, and can detect fraud thereby. Also, they have leverage, which the US public does not to date. Maybe come Jan. 20th, this will change. Maybe.

[blm]

2. Wake up and SMELL the Global Fascism.

I hope like hell Obama doesn't turn his head on BFEE and its global fascist agenda the way Bill did throughout the 90s.

[seemslikeadream]

4. AIG

[KoKo]

7. Wow! That's quite a chart...thanks "SLAD"...very helpful....

:hi:

[Nikki Stone1]

8. Nicely done, SLAD

And nice to see you!

[seemslikeadream]

10. AIG-FP was founded as a partnership between Greenberg of AIG fame and Howard B. Sosin

:hi:


http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=4221547

AIG-FP was founded as a partnership between Hank Greenberg of AIG fame and Howard B. Sosin who was also a trader at Drexel




Joseph Cassano, Mike Milken's protege





Think the $400+K party was bad, check out this guy:

Former AIG Exec at Center of Meltdown Got Paid Millions for Little Work
by Paul Kiel, ProPublica - October 10, 2008 5:35 pm EDT
Tags: AIG, Joseph Cassano, Wall Street Bailout

AIG building on Fenchurch Street, London (Clive Gee/PA Wire)One of the biggest reasons for AIG's near failure -- a collapse halted by a government bailout of $120 billion and growing -- was the ballooning losses of a tiny subsidiary called AIG Financial Products. The unit was run by one Joseph Cassano, who resigned in February after his unit, which dealt in credit default swaps, posted $11 billion in losses. (The New York Times says February is also when AIG auditors "identified problems in the firm's swaps accounting.")

But when Cassano left, AIG gave him a sweet deal. Not only was he allowed to keep up to $34 million in unvested bonuses, but the company hired him as a consultant at the staggering fee of $1 million per month.

...

Ashooh couldn't provide an exact date for when Cassano stopped providing services, but said it was the early part of the summer. In other words, even after the U.S. government stepped in to save AIG last month, the man at the center of the company's problems, Cassano, remained on as a million-dollar-a-month do-nothing consultant.

The contract was for a nine-month period to end this coming December. But Cassano and AIG mutually terminated their agreement on Monday, the day before the hearing. The reason, Cassano's lawyer told the Wall Street Journal, was that Cassano's "services were no longer being used."

http://www.propublica.org/article/former-aig-exec-at-center-of-meltdown-got-paid-millions-for-little-work-101


---------
AIG Replaces Sullivan With Willumstad After Shareholder Outcry

June 16 (Bloomberg) -- American International Group Inc., the world's biggest insurer, ousted Chief Executive Officer Martin Sullivan after record losses, a sagging stock price and criticism from the man he succeeded in 2005, Maurice ``Hank'' Greenberg.

...

AIG's financial-products unit issues credit-default swaps, contracts that promise to reimburse investors for losses on securities that included subprime assets. The business started issuing swaps a decade ago under Greenberg.

Those guarantees declined in value by about $20 billion in the past two quarters. The financial products business was co- founded in 1987 by Joseph Cassano, a former executive at Drexel Burnham Lambert, the securities firm that helped popularize ``junk-bond'' investing before it collapsed. Cassano stepped down in February.

http://www.bloomberg.com/apps/news?pid=20601103&refer=us&sid=atr9TumqGJQo

-------

AIG Former Auditor Warned About Derivative Valuation in 2007

By Ari Levy

Oct. 11 (Bloomberg) -- A former American International Group Inc. auditor told the insurer in 2007 that methods used by its financial products division to value derivatives might be flawed, according to documents from a Congressional hearing.

AIG hired Joseph St. Denis to audit the company's accounting, according to testimony at an Oct. 7 hearing of the House of Representatives Committee on Oversight and Government Reform. St. Denis's written statement said he raised concern that certain credit-default swaps might be poised for losses, which wasn't supposed to be possible, and that financial products head Joseph Cassano blocked his input.

``I have deliberately excluded you from the valuation because I was concerned that you would pollute the process,'' Cassano allegedly told St. Denis, according to his written testimony and Committee Chairman Henry Waxman. In September 2007, St. Denis resigned in protest, according to his testimony and Waxman.

....

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=abA6LSQ.3KPM

------

The Reckoning
Behind Insurer’s Crisis, Blind Eye to a Web of Risk

By GRETCHEN MORGENSON
Published: September 27, 2008

“It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.”

— Joseph J. Cassano, a former A.I.G. executive, August 2007


...

Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.

Originally intended to diminish risk and spread prosperity, these inventions instead magnified the impact of bad mortgages like the ones that felled Bear Stearns and Lehman and now threaten the entire economy.

In the case of A.I.G., the virus exploded from a freewheeling little 377-person unit in London, and flourished in a climate of opulent pay, lax oversight and blind faith in financial risk models. It nearly decimated one of the world’s most admired companies, a seemingly sturdy insurer with a trillion-dollar balance sheet, 116,000 employees and operations in 130 countries.

...
The London Office

The insurance giant’s London unit was known as A.I.G. Financial Products, or A.I.G.F.P. It was run with almost complete autonomy, and with an iron hand, by Joseph J. Cassano, according to current and former A.I.G. employees.

A onetime executive with Drexel Burnham Lambert — the investment bank made famous in the 1980s by the junk bond king Michael R. Milken, who later pleaded guilty to six felony charges — Mr. Cassano helped start the London unit in 1987.

The unit became profitable enough that analysts considered Mr. Cassano a dark horse candidate to succeed Maurice R. Greenberg, the longtime chief executive who shaped A.I.G. in his own image until he was ousted amid an accounting scandal three years ago.

But last February, Mr. Cassano resigned after the London unit began bleeding money and auditors raised questions about how the unit valued its holdings. By Sept. 15, the unit’s troubles forced a major downgrade in A.I.G.’s debt rating, requiring the company to post roughly $15 billion in additional collateral — which then prompted the federal rescue.

Mr. Cassano, 53, lives in a handsome, three-story town house in the Knightsbridge neighborhood of London, just around the corner from Harrods department store on a quiet square with a private garden.

....

http://www.nytimes.com/2008/09/28/business/28melt.html?pagewanted=1&ref=todayspaper

(lots more there, good read on how AIG with the help of Cassano's junk bond Milken techniques turned onto mortgages ruined the economy. I know I've seen this here on DU before, but it really is right out of the mob playbook. They took an entity with the best credit there was, the company insuring everything else pretty much, and used it to back this entire market of junk mortgages that everyone (well everyone who had a clue, Krugman for example been saying this for years) knew would blow up one day. There was nothing backing it, just like the scene in Goodfellas where they are selling everything out the back door of a bar the mob has taken over, at a loss. Cassano probably bailed on Drexel just before hammer came down on Milken and the company itself became a felon--still hitting some google).




Drexel?



AIG-FP was founded as a partnership between Hank Greenberg of AIG fame and Howard B. Sosin who was also a trader at Drexel



Cassano was a protégé of A.I.G-Financial Products' first leader, Howard B. Sosin. Both men joined the insurance company from joined A.I.G. from Drexel Burnham Lambert, the Wall Street firm that grew into a junk bond powerhouse thanks to Michael Milken. Drexel collapsed in 1990.

Three years earlier, A.I.G.-Financial products was created as a joint venture between Greenberg and Howard B. Sosin., a former trader from Drexel.

Known as the "Dr. Strangelove of Derivatives," Sosin was regarded as a quantitative genius. He wrote scholarly articles on derivatives and briefly taught at Columbia Business School. Indeed, his inventive wizardry extends beyond the world of finance. He has registered numerous patents, one for a golf club that accomodates a golfer's special swinging style.

In his new job at AIG-Financial Products, Sosin he was given an unusual deal: a 20 percent stake in the unit, and 20 percent of its profits.

Under Sosin, the unit dived deeply into the nascent world of derivatives. It later branched out into energy, currencies, and commodities, and bought assets from cattle to the London City Airport.

But the fast-dealing culture caught Greenberg's wary eye. By the early 1990s, Greenberg, who ruled the company with an iron fist, had grown so concerned about the unit's derivatives dealings that he formed a secret "shadow team" of traders to mimic A.I.G,-Financial Product's trades, according to a former company executive.

(...)

The C.E.O. ordered Sosin to dial it back, but Sosin refused. He left the company in mid-1993 and sued A.I.G. He later received a payout of over $180 million from A.I.G.

(...)

http://www.bnet.com/2459-14037_23-237553.html



So Hank Greenberg's story that he trust his successors make sense, because he didn't trust that London unit. So with Greenberg out of the way, Sosin's protege finally had his hands free...

However the name Drexel is familiar:



Early years of J.P. Morgan

Morgan entered banking in 1857 at his father's London branch, moving to New York City the next year where he worked at the banking house of Duncan, Sherman & Company, the American representatives of George Peabody & Company. From 1860 to 1864, as J. Pierpont Morgan & Company, he acted as agent in New York for his father's firm. By 1864–72, he was a member of the firm of Dabney, Morgan & Company; in 1871, he partnered with the Drexels of Philadelphia to form the New York firm of Drexel, Morgan & Company.

During the American Civil War, Morgan was approached to finance the purchase of antiquated rifles being sold by the army for $3.50 each. Morgan's partner re-machined them and sold the rifles back to the army for $22 each. The military knew it was buying back its own guns, so the so-called 'scandal' turned out to be more about government inefficiency than any chicanery by Morgan (who never even saw the guns and acted only as a lender). Morgan himself, like many wealthy persons, including future Democratic president Grover Cleveland, avoided military service by paying $300 for a substitute.<1>

After the 1893 death of Anthony Drexel, the firm was rechristened J. P. Morgan & Company in 1895

(...)

http://en.wikipedia.org/wiki/J._P._Morgan



So what event involved London and J.P. Morgan as well? Wasn't that the Great Depression of 1929 ...

[dixiegrrrrl]

9. Where did you get the great graphic?

Looks a bit like Muckety.com.my favorite site for findings linkages, but Muckety does not
use the wording yours does.
I am envious....please tell.

[seemslikeadream]

14. I'm trying to remember

I'll pm you if I ever can figure it out! ;)

[surrealAmerican]

13. Wow. There's the problem in graphical form.

[Taverner]

3. They are sucking $$$ out of the US like they did Argentina and Chile

[FormerDittoHead]

5. Good call. This time, WE are the victims of the "Economic Hitmen"... n/t

[seemslikeadream]

6. AIG'S JOURNEY: BAILOUT TO BLACK HOLE

AIG'S JOURNEY: BAILOUT TO BLACK HOLE
Posted by seemslikeadream on Tue Nov-11-08 10:47 AM

http://www.theglobeandmail.com/servlet/story/LAC.20081111.RAIG11/TPStory/Business



SINCLAIR STEWART AND PAUL WALDIE

November 11, 2008

NEW YORK, TORONTO -- When American International Group Inc. announced an $85-billion (U.S.) government bailout in mid-September, its directors sought to reassure investors that with this deal, they had averted catastrophe.

The loan, the board vowed in a statement, would "protect all AIG policy holders, address rating agency concerns and give AIG the time necessary to conduct asset sales on an orderly basis." Yet two days later, when Edward Liddy was parachuted into the CEO's chair, he came to a rather different conclusion - and it took him less than 24 hours.

"It was obvious to me from Day 1 that the terms of that arrangement were really quite punitive in terms of the interest rate and the commitment fee and the shortness of it," Mr. Liddy said in a TV interview yesterday, acknowledging that his five-week stint atop the world's biggest insurance company has felt more like five years. "I started, really about a week after I got here, trying to renegotiate."

The fruits of that effort were revealed yesterday, after AIG unveiled a revised bailout that will be worth approximately $150-billion, making it the largest government intervention in the history of Corporate America. The new arrangement coincided with AIG reporting a $24.5-billion quarterly loss, courtesy of staggering writedowns on its investment portfolios and credit products.

[tabatha]

11. Yes, that is correct.

That is why it was so urgent - foreign banks wanted what was owed to them.

[blm]

12. and now we'll owe even MORE to China....

just as Poppy Bush and Jackson Stephens set out to do when they helped set up the global fascist agenda in the late70s.