How much of AIG's $173 billion bailout went to European banks? must know
Where are insurance giant AIG's bailout billions really going? The White House doesn't want to tell us. But the Wall Street Journal, bless its Rupert Murdoch-owned heart, found out anyway: Foreign banks, lots of them!
Do you feel good about $173 billion of your tax money helping to keep American International Group (NYSE: AIG) from going bust? If you made the decisions that put AIG at death's door you might be. But the odds are pretty good that you had absolutely nothing to do with AIG's failure and received not a penny of compensation during the time when its executives were reporting profits -- and getting millions in compensation that they're not paying back now that it's losing money.
That's one of the reasons why I was arguing on KCRW's To the Point that the U.S. ought to disclose who is getting the taxpayer money that goes to AIG. After all, they just got another $30 billion this week after reporting history's biggest quarterly loss of $61 billion. A professor on the program suggested that we should not disclose the names of the recipients because it would threaten the stability of the financial system. I thought this professor's argument was unpersuasive -- and now we'll get a chance to see who was right.
That's because the Wall Street Journal just disclosed the names of the banks who got some $50 billion of the AIG bailout money. And as suspected, Goldman Sachs (NYSE: GS) was among the biggest recipients ($6 billion). This is noteworthy because Goldman got that money from our 74th Treasury Secretary, Hank Paulson, who was a former Goldman CEO and held plenty of its stock. So he was using our money to bail himself out! Here are the others (including 10 European banks):
Do you feel good about $173 billion of your tax money helping to keep American International Group (NYSE: AIG) from going bust? If you made the decisions that put AIG at death's door you might be. But the odds are pretty good that you had absolutely nothing to do with AIG's failure and received not a penny of compensation during the time when its executives were reporting profits -- and getting millions in compensation that they're not paying back now that it's losing money.
That's one of the reasons why I was arguing on KCRW's To the Point that the U.S. ought to disclose who is getting the taxpayer money that goes to AIG. After all, they just got another $30 billion this week after reporting history's biggest quarterly loss of $61 billion. A professor on the program suggested that we should not disclose the names of the recipients because it would threaten the stability of the financial system. I thought this professor's argument was unpersuasive -- and now we'll get a chance to see who was right.
That's because the Wall Street Journal just disclosed the names of the banks who got some $50 billion of the AIG bailout money. And as suspected, Goldman Sachs (NYSE: GS) was among the biggest recipients ($6 billion). This is noteworthy because Goldman got that money from our 74th Treasury Secretary, Hank Paulson, who was a former Goldman CEO and held plenty of its stock. So he was using our money to bail himself out! Here are the others (including 10 European banks):
- Deutsche Bank
- Merrill Lynch
- Société Générale
- Calyon
- Barclays
- Rabobank
- Danske
- HSBC
- Royal Bank of Scotland
- Banco Santander
- Morgan Stanley (NYSE: MS)
- Wachovia
- Bank of America (NYSE: BAC)
- Lloyds Banking Group
Ah yes, Rabobank, that pillar of the American economy.
Doomsaying economists like Nouriel Roubini have been saying that the global banking system is essentially insolvent. AIG's guarantees have allowed banks to avoid losses on otherwise worthless securities. To what extent is the protection issued through the government-backed AIG been masking their insolvency? Government officials have been saying since September that we must support AIG, lest its failure ripple through the banking system. But could we be just prolonging the inevitable?
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