Elizabeth Warren Uncovered What the Government Did to 'Rescue' AIG, and It Ain't Pretty

[Octafish]

Sometimes, the professional left get things right.

Elizabeth Warren Uncovered What the Government Did to 'Rescue' AIG, and It Ain't Pretty

The government’s $182 billion bailout of insurance giant AIG should be seen as the Rosetta Stone for understanding the financial crisis and its costly aftermath.

by William Greider
The Nation
c/o Alternet.org
August 9, 2010

The government’s $182 billion bailout of insurance giant AIG should be seen as the Rosetta Stone for understanding the financial crisis and its costly aftermath. The story of American International Group explains the larger catastrophe not because this was the biggest corporate bailout in history but because AIG’s collapse and subsequent rescue involved nearly all the critical elements, including delusion and deception. These financial dealings are monstrously complicated, but this account focuses on something mere mortals can understand—moral confusion in high places, and the failure of governing institutions to fulfill their obligations to the public.

SNIP...

The five-member COP, chaired by Harvard professor Elizabeth Warren, has produced the most devastating and comprehensive account so far. Unanimously adopted by its bipartisan members, it provides alarming insights that should be fodder for the larger debate many citizens long to hear—why Washington rushed to forgive the very interests that produced this mess, while innocent others were made to suffer the consequences. The Congressional panel’s critique helps explain why bankers and their Washington allies do not want Elizabeth Warren to chair the new Consumer Financial Protection Bureau.

The report concludes that the Federal Reserve Board’s intimate relations with the leading powers of Wall Street—the same banks that benefited most from the government’s massive bailout—influenced its strategic decisions on AIG. The panel accuses the Fed and the Treasury Department of brushing aside alternative approaches that would have saved tens of billions in public funds by making these same banks “share the pain.”

Bailing out AIG effectively meant rescuing Goldman Sachs, Morgan Stanley, Bank of America and Merrill Lynch (as well as a dozens of European banks) from huge losses. Those financial institutions played the derivatives game with AIG, the esoteric practice of placing financial bets on future events. AIG lost its bets, which led to its collapse. But other gamblers—the counterparties in AIG’s derivative deals—were made whole on their bets, paid off 100 cents on the dollar. Taxpayers got stuck with the bill.

CONTINUED...

http://www.alternet.org/economy/147788/elizabeth_warren_uncovered_what_the_govt._did_to_%27rescue%27_aig%2C_and_it_ain%27t_pretty/?page=entire

That's no lie: We the People got ripped off, Big Time.

[mike r]

1. There is a reason she's disliked by the con artists from Wall Street

like Geithner

[Triana]

3. I'm still disgusted with Obama's appointment of Geithner

:wtf:

He's a notorious failure. I'm afraid if Warren is confirmed as head of that agency, she will simply be shuttered out and marginalized - because the Wall St. crooks will see to it. I hope I'm wrong and I'm not saying she should not be appointed. I just hope she has a suit of armor and steel-toed boots to kick those bastards around with.

[Jackpine Radical]

8. I think it would be pretty hard to keep Warren in a box.

[mod mom]

23. & many of his appointees-Carol Browner comes to mind:

during her stint w the Clinton administration, playing cover for Jackson Stephens (WTI Toxic Waste Incinerator 1100 ft from an elementary school):


-snip

When Clinton became president, he appointed Carol Browner head of U.S. Environmental Protection Agency,

Ms. Browner then sent a small cadre of scientists to court in Cleveland, Ohio, to serve as expert witnesses on behalf of Waste Technologies, Inc. (WTI).

Because a memo to Ms. Browner from one of her staff was leaked to Greenpeace (a plaintiff in the lawsuit trying to shut down WTI), Ms. Browner's staff were forced to admit under oath that after Ms. Browner took office on January 20th, EPA conducted a secret risk assessment on the WTI incinerator.


EPA's secret risk assessment revealed that the incinerator would be 1000 times more dangerous than EPA had estimated in the risk assessment they released to the public.

-snip

http://www.dailykos.com/story/2008/1/31/21045/9822/688/446786

[KamaAina]

33. Arne Duncan

has actually managed to see Bush*'s No Child Left Behind and raise him a Race To The Top. :puke:

[Octafish]

7. Anyone ever straighten out Geithner's email thing?

Note that there should be no discussion or suggestion that AIG and the NY Fed are asking to structure anything else at this point.

I'd bet at least a few people on both sides of the aisle would like to know what was meant.

[JerseygirlCT]

34. Sure seems like, doesn't it?

Which would mean Obama's got a big decision to make: with the people and Elizabeth Warren(which means admitting a mistake)or with Geithner and the lot.

[sendero]

37. And it looks like..

.. our own party is not willing to fight for her.

See why they get no respect?

[Donnachaidh]

2. kick and Rec! n/t

[Octafish]

10. Bailout watchdog: AIG was 'Frankenstein'

Ms. Warren certainly doesn't pull any punches.

Bailout watchdog: AIG was 'Frankenstein'

By David Goldman, CNN staff writer
May 26, 2010: 3:32 PM ET

NEW YORK (CNNMoney.com) -- An overseer of the $700 billion financial sector bailout said Wednesday that insurer AIG lacked regulation, leading to a taxpayer-funded rescue that "broke all the rules."

"The company was a corporate Frankenstein, a conglomeration of banking and insurance and investment interests that defied regulatory oversight," said Congressional Oversight Panel Chairwoman Elizabeth Warren at a hearing about AIG's bailout.

Warren said the government's lack of oversight of AIG (AIG, Fortune 500) and the insurer's monstrous nature explain why the company got a $182 billion government bailout rather than a traditional bankruptcy proceeding. But she questioned why government regulators didn't act sooner to try to find a less costly solution for taxpayers.

At the hearing, representatives from the Fed testified that the extraordinary events of mid-September 2008 required it to rescue AIG with a government-funded bailout. They said that the collapse of Lehman Brothers on Sept. 15 ruined any chance of a possible private-sector bailout, and the government needed to step in quickly to avoid another giant, systemically significant financial institution from collapsing.

"The Federal Reserve became 'Plan B,'" said Tom Baxter, the Fed's chief lawyer. "We had a matter of hours to deal with decision."

CONTINUED...

http://money.cnn.com/2010/05/26/news/companies/aig_hearing/index.htm

One of the things con-men do is use the ticking timebomb of a deadline to pressure the mark into doing what they want.

[maryf]

12. K&R nt

[Jackpine Radical]

4. I guess this screws her nomination.

Can't have a loose cannon like her rolling around the deck on the Ship of State.

[Octafish]

16. Wm. Black is another one we pro'ly won't see hold up his hand to take an oath of office anytime soon

The guy's a forensic economist, called in to figure out the Savings & Loan crime scene...

Know your BFEE: Goldmine Sacked or The Best Way to Rob a Bank Is to Own One

William K. Black says without proper regulation and oversight, it will happen again.

[elehhhhna]

5. I blame G. W. Bailout

it was his & Dickie's parting gift to their criminal partners.

[Hell Hath No Fury]

6. Too many of our Democratic representatives --

helped W. get hiw wish. How many stood up and told them the Truth about what this "bailout" really was?

[elehhhhna]

22. lol none, silly! Dems? Reeps? Please. It's just one party --

I call it "Bad Cop/Worse Cop" or "the occupiers" or simply "Fascists".

[Octafish]

17. Money makes people do crazy things.

Crazy money must make people do criminal things.

Know your BFEE: It wasn’t Obama who Looted the Treasury and Banks. It was Bush and his Cronies.

It's waaaaay past time to hold the traitors and their crooked enablers accountable.

Thank you for remembering history, elehhhhna.

[Starry Messenger]

9. k & r

[Octafish]

21. The Hankster deserves a star in all this...

...just for helpin' out Old Money.

Henry Paulson, Banker to the BFEE

They seem to always end up with the New Money, too.

[highplainsdem]

11. K&R

[Octafish]

28. AIG used to mean CIA.

Probably still does, in a plausibly deniable way.

Bailout of AIG, the CIA, and Covert Operations

Posted by Matt Savinar, 9/16/2008

By now you no doubt have heard about the AIG bailout. If not, just check out this thread at the LATOC Forum. There is, however, something you almost certainly haven't heard about which is that the insurance business is heavily involved in covert operations. Some of you may be thinking "Huh? Insurance companies and covert operations?! Wow, this is some real nutballery, even for LATOC". Well if so then just consider the following excerpts from an article entitled "The Secret (Insurance) Agent Men" by Los Angeles Times staff writer Mark Fritz, originally published on September 22nd, 2000. Emphasis is mine:

COLLEGE PARK, Md. They knew which factories to burn, which bridges to blow up, which cargo ships could be sunk in good conscience. They had pothole counts for roads used for invasion and head counts for city blocks marked for incineration.

They weren't just secret agents. They were secret insurance agents. These undercover underwriters gave their World War II spymasters access to a global industry that both bankrolled and, ultimately, helped bring down Adolf Hitler's Third Reich.

Newly declassified U.S. intelligence files tell the remarkable story of the ultra-secret Insurance Intelligence Unit, a component of the Office of Strategic Services, a forerunner of the CIA, and its elite counterintelligence branch X-2.

. . . the unit mined standard insurance records for blueprints of bomb plants, timetables of tide changes and thousands of other details about targets, from a brewery in Bangkok to a candy company in Bergedorf. 'They used insurance information as a weapon of war,' said Greg Bradsher, a historian and National Archives expert on the declassified records.

The men behind the insurance unit were OSS head William "Wild Bill" Donovan and California-born insurance magnate Cornelius V. Starr. Starr had started out selling insurance to Chinese in Shanghai in 1919 and, over the next 50 years, would build what is now American International Group, one of the biggest insurance companies in the world.

Starr sent insurance agents into Asia and Europe even before the bombs stopped falling and built what eventually became AIG, which today has its world headquarters in the same downtown New York building where the tiny OSS unit toiled in the deepest secrecy.

Starr died in 1968, but his empire endures. AIG is the biggest foreign insurance company in Japan. More than a third of its $40 billion in revenue last year came from the Far East theater that Starr helped carpet bomb and liberate. Source

If the insurance business was heavily involved in OSS covert operations during World War II, it is most definitely NOT a leap of logic to suspect that the world's biggest insurer today (AIG) is also heavily involved in them. This is particularly the case when you consider that, as the L.A. Times article explained, the man who ran the OSS's insurance intel unit is the same man who established AIG.

What exactly the insurance related covert operations currently involve I (obviously) don't know. It stands to reason, however, that whatever they do involve, a bankruptcy of the world's biggest insurer would likely be very disruptive to them. In other words, federal government was probably *extremely* motivated to save AIG for reasons that aren't going to be acknowledged in the mainstream or alternative press.

SOURCE:

http://www.lifeaftertheoilcrash.net/Archives2008/AIGCoverOperations.html

Thank you, highplainsdem, for giving a damn.

[DailyGrind51]

13. Which is why "Business" will opposes her nomination with every lobbyist dollar!

They can't afford to have a watchdog with teeth!

[Octafish]

29. Lots of the Bailout Billions went to Lobbying

It's criminal what some people do with our money:

Banking Bailout Money in Lobbyists’ Pockets

TARP Money Used to Push for a New "Green Bubble"

Washington, DC - Wall Street firms bailed out by the American taxpayer are now financing an extensive lobbying campaign to promote the costly federal regulation of greenhouse gases and putting the American public at risk of facing yet another costly economic “bubble,” charges the National Center for Public Policy Research.

"Using TARP money to inflate another bubble is beyond outrageous," said Tom Borelli, Ph.D, director of the Free Enterprise Project of the National Center. "Not only are taxpayers being looted to subsidize Wall Street's latest risky scheme, but taxpayers will also bear the brunt of cap-and-trade through higher energy prices. Only in today's upside-down political world do two wrongs make a right."

A new report by the Center for Public Integrity (CPI) finds that the over 2,000 lobbyists, including representatives of the financial industry, pressing for a "cap-and-trade" scheme. Such a scheme would place federal caps on carbon emissions, thereby leading to the creation of an artificial carbon emissions trading market that could reach an estimated $2 trillion in paper value.

Critics of cap-and-trade counter than these regulations would also unnaturally raise energy prices and reduce supply, which would counteract efforts to revive the economy. Chillingly, because the new carbon “market” would be wholly artificial, the legislation could create another economic bubble.

According to the CPI study, lobbyists for Goldman Sachs and JPMorgan Chase are involved, and, in total, "the finance industry has as large a lobbying force on climate as the alternative energy industry, with about 130 reps working the issue last year..."

JPMorgan Chase got $25 billion in TARP money last fall while Goldman Sachs obtained $10 billion. The stated purpose of the cash infusion was to recapitalize the banks so they could resume consumer lending.

CONTINUED...

http://www.nationalcenter.org/PR-Banking_022709.html

Thank you, DailyGrind51, for getting what it's all about. Seeing how the Top 1-percent owns Congress and Corporate McPravda, it's really getting hard to be heard these days.

[xiamiam]

14. this happened in broad daylight..no secret at all when they were doing it

nobody gives a crap..the biggest heist in history was occurring when every other thread on du had palin in the subject headline..and du cares

[Octafish]

15. Sometimes, it's hard for complex issues to get attention. Like the Phil Gramm-Meyer Lansky metaphor.

Know your BFEE: Phil Gramm, the Meyer Lansky of the War Party, Set-Up the Biggest Bank Heist Ever.

Thank you, xiamiam, for giving a damn. Once I vowed to a DU Friend to keep it simple, too...

[xiamiam]

20. a citizens grand jury was a good idea then and now..

im sure i read your posts then..belated thank you..

[walldude]

18. K&R.. 182 billion dollars...

and we couldn't come up with 7.4 billion for 9/11 first responders... :mad:

[Octafish]

30. AIG money is double-plus BFEE good.

"(Maurice "Hank") Greenberg is also the oldest and largest paying client of Henry Kissinger’s ‘consulting firm,’ Kissinger Associates. Greenberg hired Kissinger as his chief international trouble-shooter in 1982, and has been plowing millions of dollars a year into Kissinger’s coffers ever since.”

MORE about the guy who made AIG into a mountain of money:

http://www.mail-archive.com/[e-mail]/msg00599.html

[amborin]

19. K&R

[Octafish]

32. Goldman Sachs made billions by pushing AIG to bankruptcy

Who knew? Outside of DU, even fewer.

Goldman Sachs made billions by pushing AIG to bankruptcy.

EXCERPT...

During this period, Goldman was betting on a collapse of the housing bubble, which it had helped inflate by promoting sub-prime mortgages. Even as Goldman’s top traders were structuring credit default contracts with AIG on mortgage-backed securities in a manner that enabled the bank to profit from a decline in the price of these securities, Goldman was making money by purchasing the same type of securities for clients and charging fees for bundling home loans into so-called “collateralized debt obligations” and selling the mortgage-backed CDOs into the market.

By means of the unregulated multi-trillion-dollar credit default swap market, banks and corporations purchase insurance against the default of bonds issued by other banks, companies and governments. If a seller of swaps—AIG was by far the biggest—goes bankrupt, its counterparties stand to lose billions.

By the fall of 2008, AIG was vastly over-leveraged and hemorrhaging cash due to demands from its counterparties, including major banks and financial firms in the US and internationally, that it fulfill its guarantee to make good on mortgage-backed CDO losses. Its failure threatened to tip some of the biggest banks, including Goldman and Morgan Stanley in the US, into bankruptcy.

The Times article suggests that Goldman was using its close relationship with AIG to manipulate the housing market and encourage a panic selloff of mortgage-backed assets, in part by pressing the insurer to make billions of dollars in collateral payments based on Goldman’s “low-ball” estimates of the value of mortgage-backed CDOs it had insured with AIG.

CONTINUED...

http://www.wsws.org/articles/2010/feb2010/gold-f10.shtml

[Ignis]

24. K&R

:kick:

[Octafish]

35. For AIG’s Man in Jordan, War Becomes a Business Opportunity

For some at AIG, war is a moneymaker.

For AIG’s Man in Jordan, War Becomes a Business Opportunity

by T. Christian Miller, ProPublica
December 17th, 2009

For Emad Hatabah, the war in Iraq became a business opportunity.

As AIG's chief representative in Jordan, he was responsible for coordinating the care for hundreds of Iraqis who had been injured while working under contract for U.S. troops as linguists, truck drivers and other jobs.

He fulfilled his functions by sending business to himself, his friends and business associates, according to interviews and records. For instance, Hatabah created his own air ambulance service in July 2006, a company called Arab Assist, which AIG hired to transport injured patients from Iraq to Jordan, records show.

"They needed someone who has lots of connections. I'm a doctor with lots of connections," Hatabah said during an interview at a hotel on a street crowded with hospitals and medical offices in Amman.

SNIP...

One record indicates that AIG paid $29,105 for two surgeries to remove stitches and other "medical expenses" for a patient whose care was being coordinated by Hatabah. Jordanian doctors who reviewed the bill said such charges would normally amount to around $3,500.

CONTINUED with more...

http://www.corpwatch.org/article.php?id=15503

[Ignis]

38. "They needed someone who has lots of connections."

Well, why should AIG do things any differently in Iraq than they do here?

:argh:

[SlipperySlope]

25. In the universe of possible choices, they picked the one that scr*w*d the taxpayer the most.

I was watching, I was angry, I'm still angry. When this house of cards comes tumbling down it isn't going to be pretty. Fannie and Freddie continue to be ticking bombs.

[Octafish]

39. It's the Derivatives! Why Fannie, Freddie and AIG All Had to Bailed Out...

Absolutely spot-on, SlipperySlope. I suppose it would be too much to ask for those who stole it to put it back.

IT’S THE DERIVATIVES, STUPID!

WHY FANNIE, FREDDIE AND AIG ALL HAD TO BE BAILED OUT

Ellen Brown, September 18, 2008
www.webofdebt.com/articles/its_the_derivatives.php

“I can calculate the movement of the stars, but not the madness of men.”
– Sir Isaac Newton, after losing a fortune in the South Sea bubble

Something extraordinary is going on with these government bailouts. In March 2008, the Federal Reserve extended a $55 billion loan to JPMorgan to “rescue” investment bank Bear Stearns from bankruptcy, a highly controversial move that tested the limits of the Federal Reserve Act. On September 7, 2008, the U.S. government seized private mortgage giants Fannie Mae and Freddie Mac and imposed a conservatorship, a form of bankruptcy; but rather than let the bankruptcy court sort out the assets among the claimants, the Treasury extended an unlimited credit line to the insolvent corporations and said it would exercise its authority to buy their stock, effectively nationalizing them. Now the Federal Reserve has announced that it is giving an $85 billion loan to American International Group (AIG), the world’s largest insurance company, in exchange for a nearly 80% stake in the insurer . . . .

The Fed is buying an insurance company? Where exactly is that covered in the Federal Reserve Act? The Associated Press calls it a “government takeover,” but this is not your ordinary “nationalization” like the purchase of Fannie/Freddie stock by the U.S. Treasury. The Federal Reserve has the power to print the national money supply, but it is not actually a part of the U.S. government. It is a private banking corporation owned by a consortium of private banks. The banking industry just bought the world’s largest insurance company, and they used federal money to do it. Yahoo Finance reported on September 17:

“The Treasury is setting up a temporary financing program at the Fed’s request. The program will auction Treasury bills to raise cash for the Fed’s use. The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters.”

Treasury bills are the I.O.U.s of the federal government. We the taxpayers are on the hook for the Fed’s “enhanced liquidity facilities,” meaning the loans it has been making to everyone in sight, bank or non-bank, exercising obscure provisions in the Federal Reserve Act that may or may not say they can do it. What’s going on here? Why not let the free market work? Bankruptcy courts know how to sort out assets and reorganize companies so they can operate again. Why the extraordinary measures for Fannie, Freddie and AIG?

The answer may have less to do with saving the insurance business, the housing market, or the Chinese investors clamoring for a bailout than with the greatest Ponzi scheme in history, one that is holding up the entire private global banking system. What had to be saved at all costs was not housing or the dollar but the financial derivatives industry; and the precipice from which it had to be saved was an “event of default” that could have collapsed a quadrillion dollar derivatives bubble, a collapse that could take the entire global banking system down with it.

CONTINUED...

http://www.webofdebt.com/articles/its_the_derivatives.php

PS: Never in a million years would I call you anything other than my Friend, SlipperySlope.

[SlipperySlope]

50. Thank you for the kind words

Thank you for the kind words.

In theory the quadrillion dollar derivative market could have been allowed to collapse. Almost every one of those derivatives had a counter party within the financial industry. If Goldman bets $1M that something will happen, almost assuredly some other bank has taken a $1M bank that something won't happen. Sometimes both sides of the same derivative were even held by the same firm, effectively canceling each other out if default happened. The whole thing could have been allowed to unwind with possibly few losses taken outside the industry. And the consequences of *those* losses would probably have been a more appropriate target for government support.

In my opinion, the problem was that due to the opaqueness of these markets, nobody know who was holding how much of what. Often they didn't even know who their counter-party even was. So it wasn't that the collapse would destroy the "real" economy, it was that it would have gutted wall street - nobody knew who would be left standing when all the cards were dealt.

Of course, once it became known in Washington that Goldman-Sachs was the primary counterparty for the AIG derivatives, the next step was a foregone conclusion. GOD FORBID that Goldman should take the hit of any of the risks it voluntarily entered into. Of course not, Goldman is only allowed to take the gains, it is the duty of us poor taxpayers to throw ourselves on the sword to protect Goldman from any counterparty default.

Don't forget where Paulson and Kashkari came from.

The entire thing is disgusting. Such an obvious suspension of the rule of law at the highest levels of our economic system in order to make sure the rich and powerful remain rich and powerful.

As for Fannie and Freddie: Every one of those bonds had a giant disclaimer on the first page that THEY WERE NOT BACKED BY THE US GOVERMENT. Everyone who bought one of those bonds knew they were taking on default risk, and they were being compensated for that risk by the interest premium paid by those bonds.

I hope everyone remembers Christmas Eve of 2009, when the Treasury announced UNLIMITED financial support of Fannie and Freddie. Slick move there Timmy, way to bury the news when nobody is watching. Silly me thought only Congress could approve new United States government debt, and only in specified amounts. But 'ole Timmy boy is smarter than everybody else don't you know.

Hell with it. The more I write the madder I get. I do not believe they can hold this house of cards up forever.

[Wilms]

26. k&r n/t

[Octafish]

40. Top 10 largest recipients of AIG money

Here's a Top 10 List worth remembering...

FACTBOX: Top 10 largest recipients of AIG money

Sun Mar 15, 2009 7:44pm EDT

(Reuters) - American International Group Inc disclosed on Sunday that U.S. and European banks have been among the biggest beneficiaries of the up to $180 billion U.S. taxpayer bailout of the insurer.

AIG disclosed that more than $90 billion has been paid to banks through collateral postings under credit default swaps, payments to CDS counterparties and payments to securities lending counterparties from September 16, 2008 to December 31, 2008.

The following lists the largest recipients of funds from those entities combined. The figures are estimates based on data provided by AIG:

Counterparty Amount ($ BLN)

Goldman Sachs Group $12.9

Societe Generale 11.9

Deutsche Bank 11.8

Barclays PLC 8.5

Merrill Lynch 6.8

Bank of America Corp 5.2

UBS AG 5.0

BNP Paribas SA 4.9

HSBC Holdings PLC 3.5

Dresdner 2.6

Total Payments to Top 10 $73.1

Source: AIG

SOURCE:

http://www.reuters.com/article/gc06/idUSTRE52E21O20090315

Wall Street. The Germans. The French. The British... The irony. The goldy.

[earth mom]

27. K & R!

:kick:

[Better Today]

31. She's wonderful, and yet, after today's BS comments from the WH, I wonder

if this will quash any chance of her nomination or appointment? Being that she's proven herself to be a "professional leftist," those not appreciated or wanted in Obama's Democratic Party.

[Poboy]

36. k&r

[midnight]

41. K&R for Elizabeth.

[Poboy]

42. ttt

[Arctic Dave]

43. This lady gets sexier everyday.

Yawza.

[maryf]

44. kicking...

lots of good info in this thread, thanks again!

[DirkGently]

45. She's the best thing we've got.

[Blue_Tires]

46. ttt

[Dinger]

47. K & R (nt)

[Raster]

48. Yes, we got ripped off BIG TIME. And the Obama White House were part of the gang of thieves.

Accomplices and collaborators.

There's a reason that education sucks, and it’s the same reason it will never ever ever be fixed. It’s never going to get any better, don’t look for it. Be happy with what you’ve got. Because the owners of this country don’t want that. I’m talking about the real owners now, the big, wealthy, business interests that control all things and make the big decisions.

Forget the politicians, they’re irrelevant.

Politicians are put there to give you that idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations, and they’ve long since bought and paid for the Senate, the Congress, the State Houses, and the City Halls. They’ve got the judges in their back pockets. And they own all the big media companies so they control just about all the news and information you get to hear.

They’ve got you by the balls.

They spend billions of dollars every year lobbying to get what they want. Well, we know what they want; they want more for themselves and less for everybody else. But I’ll tell you what they don’t want—they don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interest. You know something, they don’t want people that are smart enough to sit around their kitchen table and figure out how badly they’re getting fucked by a system that threw them overboard 30 fucking years ago.

They don’t want that, you know what they want?

They want obedient workers, obedient workers. People who are just smart enough to run the machines and do the paperwork and just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it.

And now they’re coming for your social security money.

They want your fucking retirement money; they want it back so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all from you sooner or later because they own this fucking place. It’s a big club and you ain’t in it! You and I are not in the Big Club. By the way, it’s the same big club they use to beat you in the head with all day long when they tell you what to believe. All day long beating you over the head with their media telling you what to believe, what to believe, what to think and what to buy.

The table is tilted folks, the game is rigged.

Nobody seems to notice, nobody seems to care. Good honest hard working people, white collar, blue collar, it doesn’t matter what color shirt you have on. Good honest hard working people continue, these are people of modest means, continue to elect these rich cocksuckers who don’t give a fuck about them. They don’t give a fuck about you. They don’t give a fuck about…give a fuck about you! They don’t care about you at all, at all, at all.

And nobody seems to notice, nobody seems to care.

That’s what the owners count on, the fact that Americans are and will probably remain willfully ignorant of the big red, white, and blue dick that’s being jammed up their assholes everyday. Because the owners of this country know the truth, it’s called the American Dream, because you have to be asleep to believe it.

George Carlin, 2005

[Poboy]

49. up

[ProSense]

51. Here is the June report

Video of the COP's June report

Warren says that the government should have acted much earlier, long before September 2008, to effect a private rescue, which she said could have been difficult or impossible, but definitely worth trying. When it was too late, the decision to rescue was made in a panic and sucess came at an enormous cost.


From the report (PDF):

The rescue of AIG distorted the marketplace by transforming highly risky derivative bets into fully guaranteed payment obligations. In the ordinary course of business, the costs of AIG‟s inability to meet its derivative obligations would have been borne entirely by AIG‟s shareholders and creditors under the well-established rules of bankruptcy. But rather than sharing the pain among AIG‟s creditors – an outcome that would have maintained the market discipline associated with credit risks – the government instead shifted those costs in full onto taxpayers out of a belief that demanding sacrifice from creditors would have destabilized the markets. The result was that the government backed up the entire derivatives market, as if these trades deserved the same taxpayer backstop as savings deposits and checking accounts.

One consequence of this approach was that every counterparty received exactly the same deal: a complete rescue at taxpayer expense. Among the beneficiaries of this rescue were parties whom taxpayers might have been willing to support, such as pension funds for retired workers and individual insurance policy holders. But the across-the-board rescue also benefitted far less sympathetic players, such as sophisticated investors who had profited handsomely from playing a risky game and who had no reason to expect that they would be paid in full in the event of AIG‟s failure. Other beneficiaries included foreign banks that were dependent on contracts with AIG to maintain required regulatory capital reserves. Some of those same banks were also counterparties to other AIG CDSs.

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Through a series of actions, including the rescue of AIG, the government succeeded in averting a financial collapse, and nothing in this report takes away from that accomplishment. But this victory came at an enormous cost. Billions of taxpayer dollars were put at risk, a marketplace was forever changed, and the confidence of the American people was badly shaken. How the government will manage those costs, both in the specific case of AIG and in the more general case of TARP, remains a central challenge – one the Panel will continue to review.