From yesterday's Squawk Box -- runs just 2 minutes. Joe Kernen on-air attempting to describe the Goldman Sachs vampire squid wrapped around the face of humanity. You'll see it in the clip.
- Joe Kernen with Andrew Ross Sorkin
- "...Geithner of course worked at Goldman..."
Mary Thompson reports on her off-camera interview with AIG CEO Robert Benmosche. Start watching at the 2:15 mark for comments from Joe.
More detail:
---
Dr. Pitchfork here. What is all this stuff I keep reading about an "Exit Plan"? How, pray tell, does digging in deeper constitute an "exit plan"? What the headline of these AIG stories should read is "AIG Goes Bankrupt -- AGAIN." Because that's what just happened. Impossible-to-pay-down debt is getting converted into equity. And we're the lucky chumps with the equity.
This part I also found amusing:
- "AIG said it will draw down as much as $22 billion from the Treasury’s Troubled Asset Relief Program, or TARP. The insurer will use that money to purchase $22 billion of the New York Fed’s stakes in the SPVs. AIG will then hand over these SPV interests to the Treasury. "
It's unclear if this is additional TARP money or not, but still, it's using taxpayer money to pay back the the govt. -- in this case the NY Fed.
Yet, the Treasury was never getting paid dividends on its original stake in AIG -- the preferred shares it is now converting into common. Do we ever get that unpaid money, or did we just toss those lost payments into the good will basket?
Ah, here be my answer (from the WSJ and re-posted on the Bail):
- "Yet, nearly two years after its near-collapse, AIG has yet to pay any cash dividends to the Treasury on the $49 billion of public money it still has invested in the company.... [T]he government believed AIG would struggle to find the cash to pay the 10% dividend rate on its preferred shares. That is why, in April 2009, the Treasury swapped $40 billion of AIG preferred shares for new, more lenient preferreds. Unlike the first set, which left the company on the hook for any unpaid dividends into the future, the new preferreds don't."
The govt., and Democrats in particular, want to call this a success story. But I don't think the public is buying it.
---
Screenshot
From yesterday's Squawk Box -- runs just 2 minutes. Joe Kernen on-air attempting to describe the Goldman Sachs vampire squid wrapped around the face of humanity. You'll see it in the clip. Watch this one.