Reasons Not To Trust the Government’s Secrecy on AIG
Jul 31, 202044.5K Shares601.4K Views
There are many irritating aspects of the continuing bailout of insurance giant AIG, a company that seems to be little more than entirely insolvent. Yet it continues to get billions of taxpayer dollars thrown at it. The biggest outrage, to me, is the Federal Reserve’s insistencethat the identities of AIG’s trading partners should remain a big secret. We can’t tell you the names of the companies benefiting from the bailout money, the government says, because it might scare them away and create havoc in the financial system.
“„The government has no legal obligation to honor AIG’s credit default swaps, but ostensibly it is choosing to do so because these swaps are held by financial institutions that could fail if the credit default swaps were not honored.
“„The problem is that the public has no idea if this claim is true because we don’t know who holds the swaps and how much they are owed. We don’t know if the Fed is only honoring AIG’s credit default swaps to ensure the solvency of banks and pension funds, or whether it may be paying off credit default swaps even in cases where hedge funds or other speculators were just making a bet that a bond would go bad.
“„The Fed and the Treasury are asking us to trust them with our money. But these are the people who completely missed the buildup of this financial bubble and minimized the problem at every turn. Their track record does not warrant much trust at this point.
Thanks, Dean. I couldn’t have said it better myself.
Rhyley Carney
Reviewer
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