Great stuff. Runs 2 minutes. David Faber on Ed Liddy's exchange with Darrell Issa over AIG counterparty payouts at par.
Background:
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The question is which Fed?
Does Liddy mean Bernanke (doubtful), Geithner as head of the Federal Reserve Bank of New York last Fall when the deal got done (merely a puppet of Bob Rubin), or Henry Paulson and Lloyd Blankfein, the circus clowns?
The answer is not as critical as the need to ask the question. The secret is out; it has long been assumed that the AIG bailout was a stealth bailout for AIG's counterparties: another way to shovel taxpayer dollars to Wall Street and European banks without going to Congress for permission. Aig CEO Edward Liddy admitted as much yesterday in his testimony before the House Oversight Committee under questioning from California Republican Darrell Issa. Liddy said he acted under explicit instructions from the Fed to pay AIG counterpary obligations at 100 cents on the dollar (par), even though the contracts were trading at substantial discounts and could have been settled for much less.
Story was originally published May 14, 2009.
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