Federal Reserve Update Report Document on Lending Activities (EESA)

Attached as a file is an update from the Federal Reserve of activities on extraordinary lending.

Due to travel and being out of town, I have not reviewed this report in detail, which is the reason this report is posted in an Instapopulist. I know our writers and readers will pour all over this and write up a blog post or at least comment with their insights.

The Board of Governors of the Federal Reserve System (the “Board”) is providing the following updates concerning the lending facilities established by the Board under section 13(3) of the Federal Reserve Act (12 U.S.C. § 343). This
report is the third periodic report filed by the Board pursuant to section 129(b) of the Emergency Economic Stabilization Act of 2008 (“EESA”) and provides an
update concerning all of the loans and lending facilities authorized by the Board under section 13(3) since March 1, 2008, that are outstanding. These facilities are

AIG Ignores New Derivatives Protocol

The Financial Times is reporting AIG is ignoring the new rules on derivatives.

The unit that all but destroyed AIG has failed to sign up for the overhaul of the global derivatives market which was given added impetus by the troubles at the US insurance group.

AIG confirmed that its financial products unit, whose soured bets on credit default swaps forced the company into government hands last year, did not adopt the “Big Bang” protocol that has been signed by more than 2,000 market participants.

The protocol, created under the auspices of International Swaps & Derivatives Association, is intended to make it easier for investors in the opaque market for credit derivatives to know what will happen to their contracts if debt defaults occur. It came into force on Wednesday.

AIG Audit on CDS Payouts

The TARP Inspector General is opening an audit on AIG payouts.

American International Group Inc.’s payments to banks including Goldman Sachs Group Inc. after the insurer’s bailout are being probed by the chief watchdog of the U.S. financial rescue program.

Neil Barofsky, special inspector general for the Troubled Asset Relief Program, has opened an audit into whether there were attempts made by New York-based AIG or the government to reduce the payments, according to an April 3 letter he wrote to Representative Elijah Cummings. The Maryland Democrat had requested the probe last month along with 26 other lawmakers.

Feds Closing in on AIG Financial Products Executive for Criminal Charges

Well, a small piece of good news from ABC:

The FBI and federal prosecutors are reportedly closing in on the AIG executive whose suspect investments cost the insurance giant hundreds of billions of dollars. The government is investigating whether or not 54-year old Brooklyn-native Joseph Cassano committed criminal fraud in virtually bankrupting the company

Not as exciting as Machine gun Kelly and shoot outs from the 1930's, instead assuredly the FBI and others are pouring over spread sheets, bank accounts, wire transfers and internal memos, but the idea of kidnapping an entire industry instead of a family is far more devestating!

Here's the real scam:

Cassano Kept Transactions Out of Sight of Regulators

More AIG Being a "Funnel" of U.S. Taxpayer Money to Banks

The Zero Hegdge blog has quite the bombshell story, a trader anonymously spilled the beans on AIG being used as a funnel for U.S. taxpayer money to other banks. In layman's terms:

For those to whom this is merely a lot of mumbo-jumbo, let me explain in layman's terms:
AIG, knowing it would need to ask for much more capital from the Treasury imminently, decided to throw in the towel, and gifted major bank counter-parties with trades which were egregiously profitable to the banks, and even more egregiously money losing to the U.S. taxpayers, who had to dump more and more cash into AIG, without having the U.S. Treasury Secretary Tim Geithner disclose the real extent of this, for lack of a better word, fraudulent scam.

Go to Zero Hedge in link for the technical trading details of the post.

Hunt 'em Down - 19 States Launch Fraud Probe into AIG Financial Products Unit - Focus on Bonuses

Get out the dogs, sic' those bastards! Hang 'em high! The public lynching continues on AIG bonuses with this latest action: 19 States Launch Fraud Probe:

To ensure the investing public, as was promised, that money received by the company is being utilized to improve the financial welfare of the company, not to pad the pockets of the same individuals who led to the financial crisis in the first place.

The actual letter is here.

While I am thrilled there is increasing focus on derivatives, structured finance, I'm not so sure focusing in on individuals will get to the bottom of this Ponzi scheme. We have structured financial products all over, everyone was in on this game, not just AIG.

If You Could Ask AIG CEO Edward Libby a Question, What Would it Be?

If you could ask AIG CEO Edward Libby a question, what would it be? Sound too good to be true? Think again.

Tomorrow, March 18th, 10 am, EST, the House Financial Services Subcommittee, Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, is holding a hearing, American International Group’s Impact on the Global Economy: Before, During, and After Federal Intervention.

Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, today announced that the Subcommittee will hold a hearing to fully examine the American International Group (AIG), how it got into its current situation, why it has received so much federal assistance, and how to move forward.

Toxic Assets, G20 and AIG releases some payout disclosures

I find this entire G20 news almost a game of chicken. Now they are discussing tackling toxic assets:

Officials meeting near London this weekend outlined guidelines on how governments should rid banks of distressed securities that have devastated companies from Citigroup Inc. to Royal Bank of Scotland Group Plc. With the G-20 calling the fight its “key priority,” Treasury Secretary Timothy Geithner vowed in an interview to “move quickly.”

But haven't we heard this before?

It's almost like hot potato with no one wanting to admit to holding billions in worthless derivatives.

What is more interesting is how other countries want the United States to clean up these toxic assets while the U.S. seems to be pushing more spending.

The Incredible Brazen AIG Gives $165 Million dollars in Executive Bonuses

This is just unbelievable and it makes it more unbelievable that AIG has not been broken up, all executives fired.

Insurance giant AIG to pay $165 million in bonuses:

American International Group is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars.

AIG is paying out the executive bonuses to meet a Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.