During a March 5th, 2009 Senate Committee hearing, the Federal Reserve Vice-Chair, Donald Kohn, refused to disclose who is getting the money from AIG:

The Wall Street Journal has a bombshell story, Top U.S., European Banks Got $50 Billion in AIG Aid . Is is really a bombshell, don't we know that behind closed doors is always where the real theft occurs? Isn't that the entire definition of the Enron style shadow state of the derivatives markets?

The beneficiaries of the government's bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions that have been paid roughly $50 billion since the Federal Reserve first extended aid to the insurance giant.

Here's the list:

• Goldman Sachs - $6 billion
• Deutsche Bank - $6 billion
• Merrill Lynch
• Société Générale
• Calyon
• Barclays
• Rabobank
• Danske
• HSBC
• Royal Bank of Scotland
• Banco Santander
• Morgan Stanley
• Wachovia
• Bank of America
• Lloyds Banking Group

AIG has already received $173 billion in U.S. taxpayer money (that we know of). AIG is losing $465,421 Per Minute

Naked Capitalism has this insight as to why so many European Banks used AIG's CDSes.

Another reason for the bailout was that AIG's guarantees allowed European banks to circumvent minimum capital requirements, which means the AIG salvage operation was a backstop to European financial firms.

Remember the boys club where Goldman Sachs was in on the negotiations of what to do with AIG? Now, magically Goldman Sachs is gets the largest payout.

The Financial Times Willem Buiter has some earlier numbers on what were AIG payouts to other banks:

An LSE colleague has shown me an earlier report in the Wall Street Journal (in December 2008), citing a confidential document and people familiar with the matter, which estimated that about $19 billion of the payouts went to two dozen counterparties between the government bailout of AIG in mid-September and early November 2008. According to this Wall Street Journal report, nearly three-quarters was reported to have gone to a group of banks, including Société Générale SA ($4.8 billion), Goldman Sachs Group ($2.9 billion), Deutsche Bank AG ($2.9 billion), Credit Agricole SA’s Calyon investment-banking unit ($1.8 billion), and Merrill Lynch & Co. ($1.3 billion). With the US government (Fed, FDIC and Treasury) now at risk for about $160 bn in AIG, a mere $19 bn may seem like small beer. But it is outrageous. It is unfair, deeply distortionary and unnecessary for the maintenance of financial stability.

According to this comment on Naked Capitalism's post:

This article raises a much bigger question. In AIG's Q4 earnings call earlier this week, Ed Liddy said AIG had a 2 trillion financial products operation, with over 1 trillion concentrated with 12 major institutions.

The big question is this: on a MTM basis, how much does AIG owe the counterparties under its 2 trillion of financial products? That would give a taste of how much money Obama/Geithner/Summers will burn by funding future losses to AIG.

Meanwhile Myron Scholes is recommending the government simply eradicate the OTC (over the counter) derivatives markets and start over. He should know, considering his own derivatives folly with LTCM.

Amazingly enough, I said that in a comment earlier this week. Take the entire fictional financial money system offline, decouple it from the network, clean the entire mess up, erase the fake money with fictional gains and fiction returns, say bummer to all those around the world who lost the fictional money, the concept being global losses are relative, and if everyone loses, well, no one really loses, and reboot the entire system with stable, valid derivative vehicles only. When one has a major virus, sometimes the best thing to do is wipe the hard drive clean and start over.

Call this Geekonomics.

Of course cluster bombs often hit the innocents so perhaps a more surgical approach is needed. Yet the strong need to plain kill this derivatives insanity with it's nonsensical mathematical models where anyone with a statistics or multi-variate calculus background can see are invalid....should be stopped. It's the modern day Dutch Tulip Bulb.