Timothy Geithner honed his spinelessness chops long before he got to the Treasury Dept., according to a new report.
Well, not that long before. It came a year ago, when Timmy headed the New York Fed and gave AIG’s counterparties a $25 billion bailout. So says a report from the special inspector general for the Troubled Asset Relief Program, who works for none other than Tim Geithner.
It seems Tim doesn’t have the stomach for hard-nosed negotiation. According to the report, his New York Fed gave the counterparties to AIG’s credit-default swaps just about everything they wanted without much of a fight. When Goldman Sachs, Merrill Lynch and the French banking regulator–on behalf of Société Générale and Calyon–refused to even consider accepting a discount on the trades, Tim and friends raised the white flag and agreed to fund AIG’s repurchase of the CDS–at par, despite the fact that many of the mortgages underlying the securities had gone into default.
The banks didn’t lose a cent on the trades, keeping AIG’s collateral to cover any losses. A Treasury-owned company wound up with $62 billion in AIG CDS, paid for in part with $24.3 billion in Treasury money.
Only $5 billion of that has been repaid.
The report blasts the New York Fed for failing “to use their considerable leverage” as the regulators of the banks giving it a hard time. But giving banks a hard time is hardly Timmy’s game.
Audit Is Critical of N.Y. Fed in AIG Bailout [WSJ]
45 minutes. Shazbot you’ll out shine Greg if you keep this up.
Chirp …
53A Arctic seabird (4)
did greg get canned?
Does this even count as a DB post?
-Wildcard bitches!
@2, Tern ?
He negotates with banks like he negotiates for his house.
@2 – what’s with the NYT crossword solutions?!
@5 S_U_ ?
@8 Skua
@9, thanks, that doesn’t even look like a real word, but yes, that’s it.
zzzzzzzzzzzzzzzzzzzz…