AIG, the economy, the real story: from Rolling Stone next week

[robinlynne]

This is a must read. This is the story behind the bailouts, AIG.
Read the whole thing. My mouth is still open.
Therre is NO excuse for an honest government to keep any ex Goldman employees in office at all!

highway theft, plain and simple, as we always knew it was.
oh and those big "retention" bonuses are going to people who managed the arm of AIG which is ABOUT TO BE SHUT DOWN ANYWAY.

Read the original article linked below. It is so hard to pick 4 paragraphs as an example

Matt tells it like it is: here are 4 excerpts:

Liddy made AIG sound like an orphan begging in a soup line, hungry and sick from being left out in someone else's financial weather. He conveniently forgot to mention that AIG had spent more than a decade systematically scheming to evade U.S. and international regulators, or that one of the causes of its "pneumonia" was making colossal, world-sinking $500 billion bets with money it didn't have, in a toxic and completely unregulated derivatives market.

Nor did anyone mention that when AIG finally got up from its seat at the Wall Street casino, broke and busted in the afterdawn light, it owed money all over town — and that a huge chunk of your taxpayer dollars in this particular bailout scam will be going to pay off the other high rollers at its table. Or that this was a casino unique among all casinos, one where middle-class taxpayers cover the bets of billionaires....


In a span of only seven years, Cassano sold some $500 billion worth of CDS protection, with at least $64 billion of that tied to the subprime mortgage market. AIG didn't have even a fraction of that amount of cash on hand to cover its bets, but neither did it expect it would ever need any reserves. So long as defaults on the underlying securities remained a highly unlikely proposition, AIG was essentially collecting huge and steadily climbing premiums by selling insurance for the disaster it thought would never come.

Initially, at least, the revenues were enormous: AIGFP's returns went from $737 million in 1999 to $3.2 billion in 2005. Over the past seven years, the subsidiary's 400 employees were paid a total of $3.5 billion; Cassano himself pocketed at least $280 million in compensation. Everyone made their money — and then it all went to shit.

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/1

[redqueen]

1. Thanks for posting this.

*sigh*

[Warpy]

2. K&R for such an important story

Matt Taibbi's descriptions of that colossal scumbucket Cassano make for a fun read of an otherwise dry subject.

[tularetom]

3. If that's the story by Matt Taibbi it needs to be seen by everyone

Print it out and read it. It's 14 pages but it will open your eyes like nothing else you have seen on the subject.

Put it aside pick it up tomorrow and read it again.

You will be pissed but you will be informed.

[Schema Thing]

4. :sharpens pitchfork:

[IrateCitizen]

5. Thanks for posting this -- it's a must-read

I found it via www.chrismartenson.com (home of the "Crash Course", another must-see IMHO) and he was really promoting the article, saying it was a spot-on description of the way things are. I especially like the end of it when he replies to the "hard work" justification of the financial sector for the massive rewards they take. He basically says that nobody ever told them to go out and make a fortune by creating money out of thin air and swindling others along the way, so they need to just STFU now.

I guess the most depressing thing about the whole situation he describes is seeing the way that the FIRE economy has taken over both parties of the two-party system. I was highly skeptical of Obama's appointments of Summers and Geithner when they occurred, and my cynicism has only grown in the time since. I mean, hell, he might as well had kept Paulson on in Treasury in order to maintain "continuity." Then again, Geithner provided at least a new face for the same tired ideology, giving the crooks a little more looting time.

The ascendancy of financial services is all about the "me, me, me" of the past 25 years instead of the "we" that we so badly need to address our challenges today. If they are able to solidify their hold on power I fear it will be disastrous for the social health of our nation, damaged as it already is. If this is the "change we've been waiting for," then there's not much sense in doing much more than hunkering down, taking care of your family and developing good relationships with your neighbors for the purpose of creating community.

[Babel_17]

6. The Devil is in the details

and I offer thanks to these intrepid journalists who dare to publish the truth that our corrupt MSM fears to.

[rpannier]

10. What really makes this sad is

Three years ago the only person I saw on MSM talking about AIG being a problem was Ben Stein.

I live overseas so I only get CNN International and CNBC (HAHAHAHAHAHAHA!!!!!!!). So you know how bad the stuff I'm getting is.

But, Stein appeared on CNN and was talking about this and the CNN talking head and the Bush-apologist both rolled their eyes and reminded the viewers that AIG was run by professionals who understand modern economics.

[spindrifter]

7. This is great:

"...all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses)."

[pscot]

8. The economic debacle in a nutshell

This is essential reading. If, after this, you still don't feel you've had your fair share of abuse, I recommend Dave Mizner's diary over at Kos. He takes names and kicks ass. As usual in these cases, the best advice is to follow the money. http://www.dailykos.com/story/2009/3/22/710056/-How-We-Got-Here-(Rubinism-Must-Die)updated

[BelgianMadCow]

9. It passed by in GD as well - VERY worthwile read

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=5293954

[captainjack08]

11. Let's see if Rolling Stone can really dig the truth out

AIG, The Global Drug Trade, Money Laundering, 9/11, BCCI, the War on Terror and the Bankrupting of America?

Who Killed John O'Neill
http://www.youtube.com/watch?v=rCFWcKVeWUE

fastforward to 56 min 30 sec for the stuff on AIG

fastforward to 1:25:25 for an explanation of how the USA was conned into allowing itself to be looted by the multinationals

Michael Ruppert article on AIG, money laundering and the global drug trade:
http://www.fromthewilderness.com/free/ciadrugs/part_2.html

[Patriought]

12. Just finished the whole thing...

Great Article. Fairly long. Not only a very informative read, but it also serves as a CDS/CDO-for-dummies sort of a guide.

[Flatulo]

13. One thing I don't understand...

Taibbi claims that the CDOs were composed of mortgage as well as credit card debt. But I thought that 'Collateralized' debt obligations did not include credit cards among its investment mix, because there is no collateral involved in a credit card. It's pure debt with no collateral to back it up.

Can someone shed some light on this?

[shagsak]

14. Definitely informative. This should be required reading for the financially illiterate

[teeka]

15. This goes to show how INCOMPETENT our government really is

Thanks for the article, I read it too, after my son-in-law told me about it. But you know when it comes down to brass tacks--our government is at fault. We have the SEC for a reason, & this along with our governments complete mis-management of Fannie/Freddie has brought on this financial collapse--which we the taxpayers of this country now get to pay for. Of course there is greed on Wall St. It's been there for decades, even in the 1920's corruption was the norm.

At ground Zero--It was our incompetent government that set the course for this economic disaster. Lets never lose site of that fact.

[sendero]

16. More accurately...

.. our bought and paid for government.

It's not that no one saw what was happening, they just made a conscious decision to do nothing, because after all - we all know that if you just let business do what it wants, everybody wins.