Wednesday, January 27, 2010

Could This Be The Start Of Fedgate?

Well, you know every government scandal has to have a "gate" in it. (apologies to David A.)

So here is the supposed scandal surrounding the Federal Reserve, which has been brilliantly posted by Zerohedge which contains a video interview with Senator Bunning (R-KY) and an interesting piece of correspondence.

Senator Bunning stated in an interview with the dolts from CNBC's Squawkbox, that Treasury Secretary Tim "Geithner will be fired by the President for his inability to handle his job as Secretary of the Treasury." What is even more interesting, and what Senator Bunning hints at, is a potential smoking gun regarding the AIG bailout and how Federal Reserve Chair Ben Bernanke's staff did not agree with Bernanke on bailing out AIG. Sen. Bunning said that the staff recommended that the Federal Reserve not touch AIG, just like Lehman Brothers. Bernanke over-ruled them.

It seems that a whistleblower had alerted Congress to specific documents which provide some "troubling details" of Ben Bernanke's possible role in the AIG bailout, and that Sen. Bunning has actually seen documents showing that Ben Bernanke overruled his staff's recommendation regarding AIG. Questions are now being raised as to whether bailing out AIG was actually necessary, and what motives Bernanke might have had in pushing for the AIG bailout.

Look at this document
from California Representative Darrell Issa (R-CA-49), which identifies the specific documents that need to be disclosed, and were requested from Edolphus Towns - Chairman of Oversight and Government Reform.

In the meantime, it looks like Harry Reid is really rushing to have this reconfirmation of Ben Bernanke, for Federal Reserve Chairman, held before anymore details about this AIG deal surfaces. Let's hope some Senators have them put the brakes on this one.

Please read the whole blogpost over at Zerohedge.. it really is an eyeopener in the whole AIG bailout scheme. Something very fishy was going on between the Treasury Department - the Federal Reserve - and AIG. It includes many players like Sen. Chris Dodd, Sen Harry Reid, President Obama, and the gracious, but unfortunate taxpayers who paid the bill.

We should demand nothing more than full disclosure of the documents surrounding this whole AIG deal.

And where the hell is the press?
Too busy covering Obama's imagined move "to the Center" and his promise to cut spending (now that's a joke!)

UPDATE: Zerohedge does it again with this post:
It appears America's taxpayers are finally about to find out just what worthless securities they received in exchange for 100 cents on the dollar, courtesy of Goldman, Soc Gen, ML et al. when Bernanke and Geithner, or whoever, decided to pay the banks in full for multi-billion dollar portfolio. As a reminder, the list in question is the now infamous Schedule A, which was redacted across the board, and which the SEC gave its blessing for secret treatment well into 2018....

Issa, the ranking Republican on the House Committee on Oversight and Government Reform, wants to make the whole thing public.

The document is part of 250,000 pages of internal documents on the AIG deliberations subpoenaed by the oversight committee.

It lists the toxic mortgage bonds that Goldman Sachs, Merrill Lynch and other banks insured through AIG. Those insurance contracts, called credit default swaps, are what the New York Fed ultimately took off AIG's books, paying the banks 100 cents on the dollar for souring mortgage bonds -- home mortgages that were bundled together and securitized. The banks could never have gotten anywhere near such a generous deal on the open market, so the move served essentially as a direct subsidy to those banks from taxpayers.

Read more here

We overpaid all right... but I want to know who actually got paid our tax dollars.