An editorial “The Geithner AIG Story” relates “Mr. [Timothy] Geithner was president of the New York Fed when it began sending what has become $182.3 billion in taxpayer assistance to AIG in September 2008….once Mr. Geithner was in charge …. the cash flowed freely to these bank counterparties. The Fed and AIG ultimately bought the underlying securities at par.”
WATCHDOG: This was exactly contrary to the advice from Warren Buffett that the Watchdog had praised at the time that the securities be bought at “market value”, not at “face value”, or at least at a discount. In the AIG case, unlike others, the taxpayers ended up picking up the entire bill for the firms irresponsible actions, not so much to benefit AIG which is almost all tax payer owned now, but the firms for which AIG had guaranteed third party debt. Growl!
