COP Report on AIG and Congressional Hearing with Geithner

The Congressional Oversight Committee released a report on AIG last week. But before we get into those damning facts, check out the below video clip of Elizabeth Warren trying to confront Timothy Geithner on the failure of HAMP. Notice how 1 million people losing their homes goes in one ear and out the other as Treasury Secretary Geithner rambles on in response.



This clip is from a COP hearing with Timothy Geithner this past week.

He was asked a host of questions, including on HAMP. Geithner just goes on and on at how successful TARP was. Frankly it is a surprise how much has been repaid but the reality is TARP is a small part of the total bail out. Last tally the Federal Reserve has $6.4 trillion dollars in bail out related activities on their books.

While the COP AIG report is damning, what is more amazing is how such a report literally goes unnoticed in the public sphere. I happened to check the site and that's how I found it.

Here are the main points reached, from the executive summary.

  • The government failed to exhaust all options before committing $85 billion in
    taxpayer funds.
  • The rescue of AIG distorted the marketplace by transforming highly risky
    derivative bets into fully guaranteed payment obligations.
  • Throughout its rescue of AIG, the government failed to address perceived conflicts
    of interest.
  • Even at this late stage, it remains unclear whether taxpayers will ever be repaid in full.
  • The government’s actions in rescuing AIG continue to have a poisonous effect on
    the marketplace.

Amazing isn't it? We just got financial reform that will not stop the next AIG. This is an outrage yet our representatives almost yawn at this point. The below graph breaks down how much the taxpayer is still on the hook for, just with AIG.


Click on graph to enlarge


Below is Elizabeth Warren's video overview on the COP AIG report.



Below is a Bloomberg interview with Elizabeth Warren. One of the things she mentions is the impending commercial real estate implosion.



Joseph Cassano, the man behind AIG FP, or the notorious derivatives and credit default swaps division, will testify before the crisis committee. Big deal. A public scolding is no substitute for real reform or criminal charges.