ProPublica: U.S. Bore AIG Bailout Risk, but Foreign Banks Reaped the Rewards, Says Watchdog.
”Foreign financial firms indirectly reaped more than $14 billion in U.S. taxpayer dollars through Goldman Sachs alone after the U.S. Treasury bailed out AIG, according to the government’s bailout watchdog. That’s just one example of how how the billions that the Treasury poured into the economy also bailed out foreign banks ...” I wonder if this was necessary to reassure foreign investors, rather than some overlooked ‘crisis.’
Comments:
I wonder what the % of foreign investment is today, compared with, say, five years ago.
Where else is China going to put its foreign earnings, Garret?
Rafe: Given that the banksters got themselves into this jam, and have continued to reap huge corporate profits, massive personal bonuses and blocked almost all meaningful legislative reform, I’m ready to wonder if we should’ve let AIG and a couple of other ‘too big to fail’ financials to fail.
Beyond the immediate effects I mentioned the people of America have now issued a couple of trillion dollars more bonds without even getting the stated objective of the bailout, getting banks loaning money again.
My cousin, for instance, owns a successful small business and has reached retirement age. She’s been trying to sell it for three years but no buyer has been able to arrange the necessary financing. This is not a startup, not a tech or media outfit, but a company that’s been around for decades with customers all over the US and internationally whose products cannot be replaced by software or web services.
From what she tells me the buyers are as best she can tell good credit risks. So why won’t any bank fund any of them? I don’t know but for me this is a perfect example of how between the trillions in bailout money and trillions in Fed off the books mishegas Americans are screwed instead of helped by the bailout and the thieving bastards on Wall St.
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It amazes me that to this day, the media does not understand the AIG bailout. The entire purpose of that bailout was not to save AIG but to prevent their counterparties (which included GS and foreign banks) from blowing up, creating more cascading failure. AIG had underwritten a ton of securities, and had they defaulted, the results would have been unpredictable. The government gave a ton of money to AIG knowing that it would be used to pay off the people holding bad paper. It’s like the government bailing out Allstate after a natural disaster. The insurer was swamped by claims so the government gave them money to pay those claims.