The New York Fed Has Some 'Splainin to Do

Wednesday, January 13, 2010 , , , , 3 Comments

Oh Timmy, what are we going to do with you?


The Federal Reserve Bank of New York may be compelled to hand over documents related to American International Group Inc.’s government bailout after the chairman of a House oversight committee said he will issue a subpoena.

Edolphus Towns, the New York Democrat who runs the Oversight and Government Reform Committee, said in a statement that he will issue a subpoena today to get New York Fed records concerning the decision it made to fully reimburse AIG’s partners. Banks including Goldman Sachs Group Inc. and Societe Generale SA were among beneficiaries of AIG’s rescue, called by lawmakers a “backdoor bailout” for financial firms.

“This subpoena will provide the committee with documents that will shed light on how and why taxpayer dollars were used for a backdoor bailout,” Towns said in his statement. Jack Gutt, a spokesman for the New York Fed, didn’t immediately return a call seeking comment.

Jr Deputy Accountant is happy to report that Jack Gutt has never returned her emails either though sending incendiary I Saw What You Did There emails doesn't necessarily warrant comment. It's OK, I still saw what you did there.

But wait for the funniest part. Ready?

Geithner, now the head of the Treasury Department, was asked by the oversight committee last week to testify in public hearings about what he knew of the New York Fed’s efforts to limit disclosure of the payments. Thomas Baxter, general counsel of the New York Fed, said last week that Geithner wasn’t aware of the issue because the lawyer didn’t think it merited Geithner’s attention.

This is akin to saying Ken Lay did not need to know Enron was cooking its books. Ben Bernanke did not need to know money markets collapsed on September 18th, 2008.

Thomas Baxter is a New York Fed bitch, obviously, if he buys what he's saying on Geithner's behalf. A 100% counterparty bailout of AIG did not warrant the attention of the head of the most powerful regional Fed bank? Where did this guy get his degree from? I'm sure Tim Geithner was awfully busy around that time (likely arranging other, equally offensive bailouts for his little Wall Street friends) but, uh, this is what those fucking accountants might call material.

If I had a large swinging dick (which it would be, obviously, if I had one), I'd tell the entire New York Fed to suck it right now. You first, Tim Geithner, and watch the teeth, sweetheart. And don't forget to give the ole balls a nice little rub while you're down there, I know this ain't your first rodeo.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Anonymous said...

JDA, you are one nasty ass girl.

What was obvious to some during the AIG bail out is now coming to light. It was a stealthy method of re-capitalizing banks that would have been doomed if left to their own devices. AIG served as a pass through. Smaller institutions were thrown under the bus because the thought was that there was adequate insurance to cover the losses after the busts. I don't think they counted on this many busts at this point but the year is young - we shall see.



I know, that's why you love me. Besides, nasty ass behavior on the part of these pricks demands nasty ass behavior on my part. You don't see my telling Jeff Lacker to suck my non existent dick now do you? ;)

I think two things happened here:

I believe AIG was bigger than even TPTB realized. They knew they were bailing out the big boys but I don't think they considered the consequences (nor did they think the stupid unwashed masses would notice).

Secondly, I honestly believe that they thought this would "fix" things. Somehow, someway, if only they could keep GS afloat, all would be well in the world. Then again, there were a lot of foreign banks exposed to AIG as well and letting it implode (think China and all that shitty mortgage paper they are stuck with) would have been a declaration of economic war.

Then again, maybe they are just a bunch of pricks and engineered a mass wealth transfer. Whatever.

Anonymous said...

Yes JDA, you are right. I keep coming back here because you are a nasty ass girl and I wouldn't have you any other way. :>)

"I believe AIG was bigger than even TPTB realized. They knew they were bailing out the big boys but I don't think they considered the consequences (nor did they think the stupid unwashed masses would notice)."
I agree.
A collapse of AIG could have easily collapsed several large banks that were beyond the help of the FDIC in the traditional sense (really TBTF), large pension funds (large mobs of angry and voting retirees), maybe some sovereign wealth funds, etc. Who knows where the collapse of AIG guarantees would have led to right? The whole argument for waging the Vietnam war was based upon a dominoe theory that may or may have not been correct.

History shows that economic wars can become hot wars. Most people don't have a problem being useful but they sure hate finding out they've been used.