AIG Testimony: Paulson — ‘Confident’ Fed AIG Decisions ‘Appropriate‘ (Deal Journal)
Paulson said he wasn’t happy that the government needed to intervene in AIG, and the financial system more broadly, but that he believes that he, Geithner and Fed Chairman Ben Bernanke “acted properly and in the best interests of our country.” He also said he was “confident” that the congressional review of the Fed’s rescue of AIG will show that “they sought to make appropriate decisions on those matter.” Meanwhile, Frodo Baggins has (again) denied telling his employees to shut it on the deal.
Diamond Lashes Out At Obama Bank Plans (FT)
“I am angry at banks that had poor management and poor regulation,” BD said. Although Mr Diamond recognised that regulatory demands for higher levels of capital and liquidity would be essential, describing that “more intrusive regulation” as “a good thing,” he stressed that the new rules had to be “connected [across] the major economies around the world”.
Emails Reveal Fed Staffers’ Angst During AIG Crisis (WSJ)
On Nov. 5, the New York Fed received a presentation, a 44-page analysis put together by a unit of BlackRock Inc., saying that the banks had significant bargaining power with AIG and had little incentive to cancel the contracts unless they received par, or 100 cents, on the dollar. The next two days, Fed officials negotiated with executives at AIG’s trading partners. “The concession negotiations did not go favorably…we’ve given up,” in-house counsel James Bergin wrote in an email to New York Fed colleagues at 7:11 p.m. on Nov 7.
Wall Street Beefs Up Clawback Rules (WSJ)
JPMorgan, Morgan Stanley and Bank of America are all doing it but some people aren’t sure they’re buying it: “Firms have not been providing outsiders with the information that is necessary to assess whether the clawbacks are meaningful and effective or merely cosmetic,” says Lucian Bebchuk, a Harvard University law professor who runs the college’s corporate-governance program.
Davos: sign of the times. Or maybe not. (Telegraph)
“All participants in the WEF as part of their conference kit have been issued with a bottle of sanitising gel. Presumably this is for use after shaking hands with a banker, though the organisers don’t explain.” Hint: that’s not ‘sanitising’ gel and it doesn’t go on your hands.
Vote on Bernanke Confirmation Is Scheduled for Thursday (NYT)
John McCain has said again the Beard will not be getting his vote on account of Bernanke being, as he told reporters “the captain of the ship when it hit the iceberg.” For those of you who weren’t on the Titanic with a young J McC, it was a harrowing experience he’d rather not go through again.
UBS says Swiss govt must save U.S. tax deal (Reuters)
A bunch of UBS clients are getting court orders to block their account data from being given to the IRS re: evading taxes, which puts UBS in a kind of awk position because the bank promised it’d turn over the info.
Bloomberg working on new editorial product dubbed “First Word” (TB)
The new service, called by one employee as a “wire within a wire,” is designed to compete against StreetAccount.
Is it hair gel?
- another former Lehman quant
What shade of orange will Timmay G be today?
"Timmay, back that thang up" – Bawney Frank
Christine Cumming is not a bad porn name.
Just sayin'.
The sanitizing gel comment made me LOL and, as a result, the #2 oil traders looked over at me suspiciously.
And no one offuhed moy a "hippy Austrailiar Dye" yestiddy?
~A. Drury
New South Wales
Austrailiar
@6/Amanda
Show us your droopy tits – i'll say this twice courtesy of Db.
@7/8 = sexist.
AIG had no leverage over the banks???? You're kidding, right? They should have just went belly up and left Goldman twisting in the wind. I guess they weren't smart enough to think of that, eh? Bunch of dirty pirates!!!!
@10 – please further demonstrate your deep understanding of the situation by describing exactly how GS would have been left "twisting in the wind."
For a bonus point, please define "counterparty risk."
For a further bonus point, please explain whether you think a firm like GS could have understood counterparty risk and what they might have done about it, assuming they were smart enough to understand it.
@11 Goldman would have been out $13 Billion had AIG went under. Lloyd had bankruptcy plans drawn up as a contingency plan should that, and other market downturn events occurred. Why would they need bankruptcy if they were perfectly hedged like Lloyd says? Of course you didn't know about these things because you're too busy washing dishes in the cafeteria at Citi, Genius!
@12 –
Thank you for proving my point. You do, indeed, have deep understanding. I didn't realize LB had shown you the bankruptcy plans he had "drawn up". Did he use a whiteboard to "draw them up"? Crayons, perhaps?
And what were the "other market downturn events" to which you refer? Reading your post, I'm still not sure if the "drawn up" bankruptcy plans would have been necessary due solely to AIG, to unnamed (but scary!) "other market downturn events", or both. Please enlighten us, o erudite reader of Rolling Stone finance.
@11 & 13 = Goldman new editorial algorithm product dubbed, "First Word: in Self-Defense"
LB – "Well, I guess if AIG goes Tits Up and a bunch of other shit happens causing a worldwide global meltdown, and we lose all our money, we'll have to file bankruptcy like everyone else."
#12 (obviously in the room) – "HA! I saw what you did there! You just drew up bankruptcy plans, meaning your AIG hedges are patently ineffective, otherwise why would you have drawn up those plans? Ha!!! GOTCHA, LLOYD!! Nanny-nanny-Boo-Boo!"
WTF kinda sunglasses is maria wearing in davos???
Is somebody going to tell her about those sunglasses?
Geithner looks like he's prepping to let a massive dump on the city.
@19 more likely that he's resigned himself to being fucked up the ass.
Maybe PETA can get us a robotic Secretary of the Treasury, unless John Thain wants the job….
http://gothamist.com/2010/01/26/petas_plea_for_ro...
Timmay is far more disposed than Bernanke to clear that room with a foul load than Bernanke. He won't take this on all fours, I tell you.
All I know is that ex-Vanity Fair writer who tried to defend big boooobs McGee last night? Guy has a degree in "dramatic writing" from Tisch, shocking, I never could have guessed…
Burnett's lame cover for Geithner is laughable. Honey, buy some boobs. I want tits with my socialism.
So the rumors I have been spreading about Geithner loving anal are true?
Ping Kneale
@11,
In absence of being made whole on CDS exposure with AIG, it would have been business as usual for Lloyd and Co.?
Don't interpret this as a snarky comment or challenge. This issue is at the center of a much larger debate and I'm genuinely curious about your, and others, thoughts.
Cheers,
UBS sucks.
I love it. The whole friggin universe goes into financial meltdown and you still can't find a single trader who admits they lost money or a bank that admits to a major screw up! Everyone was perfectly hedged, everyone's trades made money, blah blah blah. If that is true why the hell did the world go into a tailspin!
–10
P.S. Even Fuld and Cayne blame someone else…..sheesh!
@26 –
Although, unlike some people, I wasn't actually there, I suspect the truth to be somewhere between "business as usual" and "bankruptcy."
I believe GS had their entire notional exposure hedged, but had AIG failed, I'll bet some of their other counterparties might not have made good.
I don't believe that AIG would have tanked GS. I don't like the Monday Morning QB grandstanding and indignation of people pissed off that GS was somehow in the wrong for enforcing their contractual rights and insisting on being paid what they were owed. If I were the US Gov't, I'm not sure I would have done that, but I suspect they were looking at the bigger picture; that is, AIG's being around and able to make good on their other insurance commitments.
The Fed and congress knew where the money was going before they gave it – to cover margin calls. To pretend now that it was some sort of conspiracy or that no one knew where the money was going (shock! To the banks making margin calls!) is simply ignorant, populist mouth-breathing and ranting.
But that's all the rage now. Mmmmm – sure feels good to grill Timmy G on TV!!! Please pick up pitchforks on the left, torches on the right. Thank you.
Anal- Thank you for the insight.
Dear "Air-in" Burnett- STFU!
@6/Amanda
Show us your droopy tits – i’ll say this twice courtesy of Db.
Is somebody going to tell her about those sunglasses?