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A Little Clarity on Some AIG Bailout Money Ends Up in GS and Other American Banking Firms Hands

At least not all has gone to foreigners

In case you were wondering where on earth all that money went that you shoveled into the black hole known as AIG, we now have a pretty good idea.

* $13 billion of it went to Goldman Sachs
* $12 billion went to Soc Gen
* $12 billion went to Deutsche Bank
* $9 billion went to Barclays
* $7 billion went to Merrill Lynch
* $5 billion went to Bank of America

And so on.

All these firms did business with AIG voluntarily. All these firms knew (or should have known) the risks of doing business with an unregulated firm in an unregulated part of the market. All these firms were willing to take the risk that AIG wouldn’t be able to make good on its commitments.

(Or, more accurately, all these firms were willing to take the risk the government would NOT bail out AIG if it were as dumb and reckless as it looked–and this proved to be a safe and smart bet.)

By now, however, one thing should be clear: The government’s decision to bail out AIG on the terms it did was a colossal mistake. All of the counterparties that were secretly bailed out via the AIG bailout could have and should have shared at least some of the loss. But because incompetence is clearly not confined to those who work in the financial services industry, the American taxpayer will, once again, foot the bill.

Here’s the full list of those who got secret bailouts via AIG, ranked in order of gift. Read it and weep:

Goldman Sachs $12.90 billion 2.5 5.6 4.8

.
Soc Gen $11.90 billion 4.1 6.9 0.9

.
Deutsche Bank $11.80 billion 2.6 2.8 6.4

.
Barclays $8.50 billion 0.9 0.6 7

.
Merrill Lynch $6.80 billion 1.8 3.1 1.9

.
Bank of America $5.20 billion 0.2 0.5 4.5

.
UBS $5.00 billion 0.8 2.5 1.7

.
BNP Paribas $4.90 billion 0 0 4.9

.
HSBC $3.50 billion 0.2 3.3

.
Calyon $2.30 billion 1.1 1.2

.
Citigroup $2.30 billion 0 0 2.3

.
Dresdner $2.20 billion 0 0 2.2

.
DZ Bank $1.70 billion 0.7 1

.
Wachovia $1.50 billion 0.7 0.8

.
ING $1.50 billion 0 0 1.5

.
Morgan Stanley $1.20 billion 0.2 1

.
Bank of Montreal $1.10 billion 0.2 0.9

.
Rabobank $0.80 billion 0.5 0.3

.
Royal Bank of Scotland $0.70 billion 0.2 0.5

.
AIG Int’l $0.60 billion 0 0 0.6

.
KFW $0.50 billion 0.5

.
JP Morgan $0.40 billion 0.4

.
Credit Suisse $0.40 billion 0 0 0.4

.
Santander $0.30 billion 0.3

.
Paloma $0.20 billion 0 0 0.2

.
Citadel $0.20 billion 0 0 0.2

.
Danske $0.20 billion 0.2

.
Reconstruction Finance Corp $0.20 billion 0.2

.
TOP 18.3 26.7

.
Other $4.60 billion 4.1 0.5

.
TOTAL $93.40 billion 22.4 27.2 43.8

.

.
Analysis By:

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The Business Insider

And here’s the press release, which was no doubt timed to dilute the outrage over the $450 million in bonus payments AIG just made to the division that made all these idiotic commitments in the first place. A.I.G.’s Biggest Counterparties

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4 comments

  1. Woodshedder

    I have read that a little known law passed at the urging of Paulson in 2005 made the counterparties the first to get paid off, in case of any default. This means that no matter what the bankruptcy court would decide, GS, ML, BAC, etc. would receive their payments.

    Read more about it here:

    “Another interesting tidbit explains why the government is not allowing AIG to fail. Turns out their counter parties are investment banks, the likes of Goldman Sachs. By letting them fail, Goldman Sachs would be in deep shit. We cannot allow that to happen in a Free Market society. But it gets better. Turns out that the Republican Administration and the Republican congress took time from their busy schedule during war time and inserted a little known clause in the Bankruptcy act of 2005. In that law, aimed at making it harder for poor people to declare Bankruptcy, they managed to change the law of the land so that CDS counter parties have the highest level of payout in case of a company failure.”

    http://blog.livememories.com/2009/03/land-of-coward.html

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  2. CRONKITE

    Nice link Shed.
    We should have bailed out Americans and let these fuckers go bankrupt.
    NWO is taking shape…save the rich and never mind the poor.

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  3. Yogi & Boo Boo
    Yogi & Boo Boo

    The more I read about this, the more outrageous it is. Mark Haines just put it well: “If you’re blue collar you’re screwed, if you’re white collar you’re fine.”

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  4. CRONKITE

    Yogi & Boo Boo,

    It is outrageous and hurtful to hard working Americans ! Unfortunately there is contract law which must be followed. Going forward though pay for performance might be a very important stipulation.

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