Sleaze Watch: NY Fed Official Responsible for AIG Loans Joins AIG As AIG Pushes Sweetheart Repurchase to NY Fed

The corruption in high places is getting more and more brazen with every passing day. The only thing that separates the US from conventional banana republic status is that no one leaves keys to new luxury cars on the desks of officials to secure their cooperation. It’s just not enough of an inducement to get anyone to take action.

Masaccio at FireDogLake was suitably outraged at this spectacle of a regulator getting a job with the biggest lobbying group in the industry he regulates…..and staying in his current oversight role:

The Washington Post reports that David H. Stevens will be taking over as head of the Mortgage Bankers Association. Stevens currently serves as Assistant Secretary for Housing in the Department of Housing and Urban Development, and as the Commissioner of the Federal Housing Administration. He has a conflict of interest so deep that he should be fired at once…

Allowing Stevens to stay on the job, and saying that it comports with ethics rules, is proof that the term “ethics” has lost all meaning. He is working on a settlement that in some news stories calls for a penalty of $20 billion, which only banksters think bears any relationship to the horrifying damage caused by these sharks, through jacked-up fees, fraudulent court filings, dual-track loan modifications and other sleazy tricks played on suffering homeowners. He comes from the industry, and is heading to the group that put out slimy reports condemning any steps that might aid homeowners, including judicial modification of mortgages in bankruptcy.

Why is he not immediately fired for cause? President Obama can’t even use his standard excuse, that we should look forward, not at the past. I’m looking forward, and I see a totally compromised person negotiating the future of millions of Americans.

Now we have another example of unseemly revolving door behavior, this with an even more direct connection between a former official’s old purview and his current role, this time involving AIG and its biggest sugar daddy, the New York Fed.

We were probably remiss in not commenting on the peculiar announcement of AIG’s offer to buy back the bonds in the New York Fed’s Maiden Lane II portfolio for $15.7 billion. The stated reason, that the purchase would “reduce its obligation” to the government is nonsense; it’s astonishing that the press is parroting it. As this Cleveland Fed summary indicates, the latest of a series of restructurings converted the remaining debt payable by AIG to equity; it has paid down all its loan balances. the New York Fed loan to Maiden Lane II is payable by that entity, not by AIG (AIG does have an “equity” position in that portfolio).

AIG can buy plenty of bonds in the marketplace; the only reason for it to offer to buy these bonds in particular is if it believes it can obtain them at a discount, which means that this is yet again another pretty blatant subsidy to the giant insurer. (The only other rationale we could fathom at the time of the announcement of this offer was to justify the government’s continued insistence that all these bailout programs were really great deals. Yes, if you have the Federal Reserve engaging in QE, you can play a three card monte game that makes your older portfolio buys look amazingly astute. But as we discuss below, the evidence has now fallen out conclusively on the side of this move being yet another subsidy to AIG).

Note that if the NY Fed were serious about selling these bonds and maximizing value to the public, the last way you’d do it would be as a single massive portfolio. Big portfolio sales do result in discounts due to the lack of competing bids (think of selling all the artwork in an estate, which included a lot of painting, sculptures, collectable ceramics, and rugs, as a block versus selling the items individually in an auction). The way to fetch a decent price would be to break the portfolio up, in some cases down even to the single bond level, or at least into much smaller homogeneous lots, and work the orders through multiple dealers over time. Admittedly, AIG made its brazen offer back in December and the officialdom failed to respond.

Providing support for our first theory is the offer by Barclay’s today to bid on the portfolio. From the Financial Times:

Barclays is among a group of investors weighing a rival bid for a portfolio of mortgage-backed securities that has already drawn a $15.7bn offer from AIG, people familiar with the matter said.

The securities are owned by the Federal Reserve Bank of New York and housed within Maiden Lane II, one of the special-purpose vehicles created as part of the insurer’s $180bn rescue during the financial crisis….

People familiar with matter said the Treasury had sought to help broker a deal between the insurer and the New York Fed, reasoning that management’s knowledge of the some 800 securities might help squeeze more profits out of them and maximise taxpayers’ returns on their AIG investment. Fed officials remain concerned how a quick deal with AIG might appear to the public, the people said.

How do you read that statement: “management’s knowledge of the some 800 securities might help squeeze more profits out of them and maximise taxpayers’ returns on their AIG investment” ? That reads as if the Treasury is considering interceding on behalf of AIG to “maximize returns” meaning screw the Fed to allow the garbage barge AIG get a better deal. This is more or less an accounting gimmick among the main actors, but sticking the Fed with a bad deal is not all that visible, while tarting up AIG’s financials will presumably help with the public offering. Thus this, along with every retrade of the AIG deal (I think we are up to five), is yet another covert bailout.

Oh, and more evidence that AIG is trying to get a steal:

“It’s a very different story with or without these securities,” Robert Benmosche, AIG’s chief executive, told the Financial Times. “We can improve yields by 3-4 per cent.”

That, dear readers, means AIG can’t buy this many bonds at a comparable risk/return tradeoff in the market. It can’t be “a different story” unless this portfolio is bought at prices far better than those required for comparable bonds in the market. It’s prima facie evidence that the intent is to get an above market yield, which is tantamount to a discounted price.

Now where is the sleazy part in this? Aside from the hidden bailout, is that the NY Fed official who was responsible for overseeing Fed loans to TARP recipients, including the AIG loan, Brian Peters, joined AIG in late January. See this letter to the Committee on Oversight and Government Reform, based on subpoenaed information from the Fed, p. 8, the e-mail cited in footnote 31, for a sighting of Peters in action. Given the extensive interactions between the Fed and Treasury on the fight with Ken Lewis over his threat to walk from the Merrill purchase (the two were working in tandem here, and pretty much on all the major TARP recipients who got Fed loans), and the continued close cooperation between the Treasury and the NY Fed, it isn’t hard to imagine that Peters has good knowledge of and relationships with the key actors at the Treasury as well as at the NY Fed.

So we have a former NY Fed official, deeply involved in the exchanges among the Fed and AIG and almost certainly the Treasury as well, now joining AIG. It isn’t hard to imagine that the reason he was hired was due to his intimate knowledge of how to move things along at the NY Fed and Treasury, and in particular, what Blackrock had told the NY Fed about Maiden Lane II and what the NY Fed’s return and political considerations were. The Treasury is not trying to protect the NY Fed from any information advantage AIG might have regarding the Maiden Lane II assets; Blackrock is certainly up to that task. It’s entirely about appearances of cutting a deal that favors AIG without that looking too bloody obvious.

So in this warped world of priorities, where giving financial firms great deals to “preserve the system” and cook the books on the TARP are top priorities, having an former insider grease the wheels is probably seen as really helpful. It’s merely another proof of what Simon Johnson pointed out in May 2009: the government is firmly in the hands of financial oligarchs.

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28 comments

  1. Gentlemutt

    AIG REGULATOR BRIAN PETERS JOINS AIG STRAIGHT FROM FED NY!

    “the NY Fed official who was responsible for overseeing Fed loans to TARP recipients, including the AIG loan, Brian Peters, joined AIG in late January”

    You are too nice to Mr. Peters, Yves. His name belongs in the headline so when other sites pick up your piece — as they do quite reliably nowadays — it gets bounced around atop the story, where his name now forever belongs. Buried the lede in a sense, but great piece, thank you.

  2. billwilson

    When do the masses start picketing outside their houses? … with pitchforks? It may be the only way to really stop this kind of behavior.

    Just more and more proof of the corruption at the heart of a system in its death throes.

  3. Tom Crowl

    What is now very clear to me personally, as well as to millions of others, is that the law has become a sham vehicle for enabling the most powerful to cheat with impunity. They first corrupt its design and then use its complexity and expense to crush individual rights and enrich themselves and their cronies inside and outside of government.

    When law and justice are lost to the machinations of power; when its purposes are corrupted and available only to those with wealth… when it becomes a relentless, mindless machine grinding down the less connected… then there can be no assumption that there exists a valid social contract.

    And when biggovernment and big business become partners in the destruction of individual rights and initiative; when they lose the faith of people like me they’ve lost more than they realize. While I believe there ARE individuals in both parties with integrity… they can have little effect. Because at root BOTH PARTIES ARE NOW SHILLS for a corporate/financial mindless machine.

    Don’t Tread On ME!

    This is for Mr. Stumpf of Wells Fargo:

    Its not you alone at fault for the corruption either in this nation or in your bank… but I need to know where you stand and what you are doing about it? It’s of considerable import to me personally. In fact, its everything to me since I face completely unnecessary homelessness in weeks…

    You are mis-using this asset. I would like to have a line to the asset manager of this property to discuss issues involving your practices and procedures. Why has this not been allowed? Why are there no points of contact in your bank? Why do you contract out individual portions of the process to separate attorneys leaving the left hand ignorant of what the right hand is doing? Why is there no unity of vision so as to maximize the return on your assets as well as provide for a better outcome for the millions you’ve cheated? WHY HAVE I NEVER HAD ANYONE TO TALK TO AT YOUR BANK!

    And please follow-up on the contact from Congressman Sherman’s office regarding very specific issues I’ve raised. These were communicated to the the attorney you have diligently working to evict people here in the San Fernando Valley right after the unexpected illegal foreclosure but I don’t know whether he’s passed them on. (There was a short-sale negotiation in process which would have allowed me to stay as a renter in this granny-unit I built over the garage; I’m not even asking for a mod at this point though its justified; just to be a renter in what I myself built pending sale to new owner or my situation changes.)

    Mr. Stumpf, I think TBTF is a very, very bad thing for this country as well as for individual initiative, liberty and a healthy economy. And its bad for sound banking too though that may be of little concern to you personally, I’m sure you’re quite comfortable! So I expect you feel differently about TBTF.

    If you want to pretend it’s a workable formulation than what’s necessary for me as well as all the rest of us is the same attention and rationality from you (or your CAPABLE designees if you have any) that I would get were it an individual holding my mortgage.

    This is not a question of asking favors Mr. Stumpf. I’m insisting you do your job. If you wanna play big leader than take the responsibility.

    If I’d ever had an individual to deal with… someone with skin in the game… I believe resolution could have been found very quickly… in my case as well as millions of others. There’s no one-size-fits-all. But let’s leave that aside for now.

    I don’t believe you’ve done well with your assets… and you, together with the government are destroying real lives and real value in a vain attempt to prop up housing prices and cover-up the destruction of the American economy you all have guided over the last couple of decades.

    There is no longer any room for doubt. There is massive corruption at the top. The rationalizations they provide don’t wash.

    I don’t like being raped, Mr. Stumpf. And I’m not looking for any handouts or mods or a free house.

    Hard to say where this is going politically. But I think there’s steam building.

    To be fair Mr. Stumpf, I suppose this is closer to what they call Date Rape… first you court the victim and then pounce when they’re weakest.

    And like date rape, many blame themselves… but I think they’re going to wise up.

    Its going to be a bumpy ride.

    1. Tom Crowl

      And YES, I understand that its possible or even likely that neither Wells Fargo, let alone Mr. Stumpf actually holds my note and/or mortgage.

      So please Mr. Stumpf, if you’re acting as servicer for Freddie Mac, Fannie Mae or the broader Rubin-Summers-Greenspan-Geithner-Fed-Duopoly-led Attempted Cover-Up please let me know and I’ll address them directly.

      Yours Truly,

      Deadbeat #37,584,672

  4. Wild Bill

    It’s obvious what’s going on — they’re going to do the trade again! The most profitable trade AIG ever made was with the US gov’t. We’re running out of QE space; as soon as Bernanke stops, the markets tank. So AIG buys the bonds back, at a profit from it’s previous position, along with an undeclared put offered by the Fed. When you’re long the underlying and long a put on that underlying, you have the equivalent position of a call. To profit, you need to make more than you paid for the put. The put was free — so is the profit. AIG banks the income from the mortgage bonds until the market tanks again, then they put the portfolio back to the gov’t.

  5. Jim the Skeptic

    The executive branch, legislative branch, and judicial branch of the federal government all share the same view of the world. If it is not strictly illegal, then it is probably ethical.

    1. ZADOOFKA FLORIDA

      LEGALITY DOESN’T MATTER. THEY CHANGE THE LAWS TO SUIT THEM.
      REMEMBER READING “ANIMAL FARM” IN JR HIGH? WE’RE HERE.

  6. Moopheus

    While it doesn’t quite reduce the egregiousness of the revolving door, it appears that the reason Obama did not immediately fire David Stevens is that he is leaving voluntarily on March 31.

    1. Hugh

      There is no indication that the Obama Administration ever considered firing David Stevens or that Obama had any problem with David Stevens’ actions.

      It is important to understand why the MBA the main trade and lobbying group for mortgagers would reward Stevens with their head post. It is for representing their, not the people’s, interests while he was at HUD and the FHA. It is to gain access to his contacts in government. And it sends a message to those in government that if they do the industry’s bidding, like David Stevens, they will be rewarded, in other words a post-dated bribe.

  7. briansays

    Perhaps this quote from Jesse’s Cafe best explains things

    “In a way, the worldview of the Party imposed itself most successfully on people incapable of understanding it. They could be made to accept the most flagrant violations of reality, because they never fully grasped the enormity of what was demanded of them, and were not sufficiently interested in public events to notice what was happening.

    By lack of understanding they remained sane. They simply swallowed everything, and what they swallowed did them no harm, because it left no residue behind, just as a grain of corn will pass undigested through the body of a bird.”

    George Orwell (1984)

  8. Yulek

    The thing that separates US and conventional banana republic is the fact, that US has nuclear weapons. That’s really frightening

  9. Hugh

    Re AIG, where to begin?

    Important to remember that Treasury currently owns 92% of AIG. AIG is in effect a government entity so this really is all about the bookkeeping, as in if you pay yourself $5 you really haven’t gained or lost anything. Of course, in AIG’s case, bonuses to top staff predicated on such kinds of deals are just a scam. But the key point here is that the idea that AIG is paying back the government when the government owns AIG is ludicrous, not to mention deceitful.

    The fair market value of Maiden Lane II, which should be updated in a week or two, is $15.896 billion so the AIG offer was at least 196 million less than fair market value.

    http://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab5

    But that’s not the end of it. The FRBNY loan to Maiden Lane II plus interest comes to $12.838 billion. Once that is wiped out. $1.078 billion in deferred interest would then become payable to AIG. So AIG effectively gets a billion dollar rebate on any purchase of Maiden Lane II.

    In addition to the 92% government stake in AIG, AIG owes the government $20.3 billion which is supposed to be paid back eventually from the sale of AIA and MetLife shares.

    Finally, AIG’s recapitalization plan was executed on January 14, 2011 or about the time that Brian Peters switched over to AIG. This is a pretty standard occurrence: government official or politician is involved in negotiations with entity A, negotiations are wrapped up, government official or politician goes to work for entity A. It doesn’t take much to grasp the quid pro quo going on here. Entity A doesn’t hire the government official or politician because this individual has just put the screws to them but because he/she has instead represented entity A’s interests.

    1. readerOfTeaLeaves

      Perhaps you are the same ‘Hugh’ that was part of emptywheel’s discussion two years ago, positing that AIG had threatened the US government with economic implosion if the US government didn’t agree to cover the AIGFP and other gambling debts?
      http://emptywheel.firedoglake.com/2009/03/15/the-semtex-in-the-aig-retention-contracts/

      At this point, it would appear that former government ‘regulators’ (quaint term…) are so used to working with those they are supposed to be regulating that they themselves can’t tell the difference anymore.

      Nothing says more starkly that any claims by AIG to be a capitalist entity are delusional. Brad Peters appears to be a man no longer capable of distinguishing between ‘private’ and ‘public’ sectors. The business of government has now become propping up post-capitalist information structures (insurance, telecom, intel, medicine) that cannot function in a competitive market.

      We need new economic thinking, urgently.
      What we are seeing bears no relationship to the kind of twaddle and drool espoused by the likes of Glenn Hubbard (Dean of Econ at Columbia Univ) and other so-called economists interviewed in Charles Ferguson’s “Inside Job”. Indeed, Nouriel Roubini was the only economist who seemed to have a clue; George Soros and another hedge fund manager also seemed to hold a realistic view of economic behavior.

      The academics were mind-boggling in their cluelessness.
      I’ll bet that after Brad Peters works at AIG, he’s the kind of guy that Glenn Hubbard would love to hire as a prof at Columbia.

      There appears to be something about that revolving door between government and so-called business (which is basically corporationOnGovernmentLifeSupport) that appears to increase delusional thinking with each passage, in any direction.

    2. Yves Smith Post author

      First, AIG would get some of the equity portion (the $1 billion) if ANYONE bought ML II at a price over current value of the debt. If an auction yielded more, they own the residual, I’d assume they could get even more if the holdings were auctioned and the Fed got more than the current book value. So why are they so eager to buy it? They could just press the government to unwind it and if they wanted to, bid on some of the bonds. They’d get the equity gain with no cash outlay.

      Second, your comments on AIA and MetLife are not consistent with the Cleveland Fed’s summary of the restructuring. It describes the loans as fully paid off ex the debt against ML II and III, which is not debt to AIG:

      AIG received $16.2 billion for the sale, $7.2 billion of which was cash and $9 billion was MetLife securities. After a dispute with Prudential Financial and its board over the sale of AIA, AIG eventually conducted an initial public offering of AIA Group (AIA) on the Hong Kong Stock Exchange in October 2010. The offering for two-thirds of the subsidiary brought in $20.5 billion in cash for AIG. The majority of the $27.7 billion in cash collected in these two transactions was held in an escrow account at the New York Fed starting in November 2010. This cash balance is where the funds for repayment were drawn from.

      In executing the plan, AIG used the escrow account funds to first pay off the remaining balance of the credit facility, supplying $19.9 billion to eliminate that balance. In addition, the commitment by the New York Fed to lend any further funds was terminated ahead of the credit facility’s scheduled expiration in September 2013. Approximately another $6 billion in the escrow account was used by AIG to repurchase preferred interests in AIA and ALICO from the New York Fed. The remaining preferred interests were purchased by AIG using a $20 billion loan from the Treasury’s Troubled Asset Relief Program (TARP), and those interests were then transferred to the Treasury. What remains on the Federal Reserve’s balance sheet are the two Maiden Lanes, but these are indirect obligations and they have been covered in depth before on this website.

      1. Hugh

        AIG can’t get its billion until someone buys Maiden Lane II above the level of the current Fed loan plus interest. So it remains illiquid and if there is another crash and the fair market value of the vehicle falls below the level of the loan plus interest, then it loses the billion. I would say that AIG’s interest could be one of timing in turning an illiquid asset into a liquid one.

        As for AIA and Metlife, I got that off AIG’s own site:

        http://www.aigcorporate.com/GIinAIG/owedtoUS_gov_new.html

        “AIG paid down and retired approximately $6.1 billion of the FRBNY’s preferred interests in the AIA and ALICO SPVs, using cash proceeds from the AIA IPO and the ALICO sale. AIG
        purchased the remainder of the FRBNY preferred interests using the undrawn balance of the TARP Series F Preferred Shares and transferred those interests, totalling $20.3 billion, to the Treasury Department in consideration for retiring an equal amount of liquidation preference of the preferred shares. The Treasury Department is expected to be repaid in full over time from the proceeds of the sale of AIA shares and the MetLife shares received in the ALICO sale that are now subject to lockup agreements, and from the proceeds of other asset sales”

        The Treasury has not been paid the $20.3 billion yet. It is in process and again if there is a crash between now and the sale of those shares, then AIG won’t have the money to repay Treasury from the AIA and MetLife deals.

        1. Yves Smith Post author

          We are talking apples and oranges. Please reread the Cleveland Fed piece. I am talking about the LOANS FROM THE FED. That has nada to do with the Treasury. The discussion has to do with AIG seeking to unwind the ML II vehicle, which is overseen by the NY Fed.

          The “obligation” that AIG keeps misleadingly referring to is the Treasury preferred stock sake. That has nothing to do with the Fed. In corporate finance, equity, including preferred stock, is not an “obligation”. Preferred stock dividends are paid if and when earned. And there may not be a cumulation requirement; I haven’t checked the term sheet.

          On the matter of AIG spending $15.7 billion to liquidate a mere $1 billion in gains that it no doubt is showing as an asset on its balance sheet, that is pretty dubious from a corporate finance standpoint. From a taxpayer standpoint, any sale should be thrown open to the public. ML II gets its loan paid down, AIG gets any upside as part of its equity. If the sale realized more than the current book value of ML II, so much the better for AIG. That’s better for AIG than spending $15.7 billion to achieve similar or even less upside.

          1. Hugh

            We have four entities here: Maiden Lane II an SPV created with Fed money, AIG 92% owned by the government, the Fed a quasi governmental central bank, and Treasury. All the money shuffling is between essentially governmental entities although some pretend they are something else. So I am not sure what the difference is if it is the (right-hand) Fed or the (left-hand) Treasury that is doing something.

            My point about the $20 billion is that that is still out there. It would be interesting to know if Treasury is still collecting interest on it or if the transfer of interests in AIA and MetLife stopped that even though the Treasury can’t actually cash those shares right now.

            I never said that AIG would spend $15 billion to recoup $1 billion. But that billion is certainly a deal sweetener. Maybe the Barclays bid will firm up but right now there is not a long line of buyers.

  10. Frankenstein Government

    I have often thought, while wearing my tinfoil hat, that Pres Obama was selected for Presidency by bankers who were looking for amnesty. I simply cannot explain whereTF this guy came from but I can sure look at where that 1 billion dollar war chest came from.

    Look backwards,not hardly. My job is to let the bankers go. Mission accomplished. The rest of this shit is just small potatoes- chumps.

    -Barack Obama

    1. Mark P.

      No tinfoil hat required. Almost certainly, Hank Paulson and the current crew at Treasury were preemptively moved into those positions after some heavy-duty scenario-based planning about what might forestall a New Deal-type reaction — including perp walks for banksters — when the Bubble burst. Underwriting Obama was part of that same preemption.

      But I’ve given up being appalled. Even if every single U.S. citizen got appalled and vented his/her outrage on the Internet, it still wouldn’t change the regime’s behavior. Only action will do that.

      Is anybody here sufficiently exercised to get off their butt and actually do something?

      1. Tom Crowl

        Thanks for paying attention.

        As a matter of fact, trying to do something about it has a lot to do with me losing my home.

        I believe this needs to get done (and have built the model) but am still waiting for a hearing somewhere:

        Political monetary participation can be unencumbered and simplified (including especially, though not limited to, at the micro-transaction level), its networking must be facilitated and the utility that enables that must be (in some form) universally owned. I also believe it can and should be self-supporting and governed by its users.

        Addressing Two Problems:

        1. Simplifying the process: “…[campaign contribution] could become much easier if campaigns can figure out how to allow people to donate by making the process easier through one click pay methods and a short form for the additional FEC information required.” – Katie Harbath, chief digital strategist at the National Republican Senatorial Committee… now with Facebook

        2. The need for a viable tool for voter response to the Citizens United Decision and broadening the citizen’s capability for participation in general.

        THESE PROBLEMS HAVE NOW BEEN SOLVED!

        For simple illustration of the principal:

        Some round figures: $25 times 150 million voters is $3,750,000,000.
        That would be all of 50 cents a week (giving you even a couple of weeks off for holidays!)

        Now I’m not suggesting that it would work exactly that way… but I am suggesting there’s a whole lot more potential there if it can be tapped… if it can be made easy enough that it becomes part of your regular life…

        I believe that CAN and MUST happen.

        The potential for additional monetization of news and journalism is synergistic icing on this cake.

        Finding Roots in a Shifting Landscape: Facebook and the Future of Social Networks

        (It seems that not only Mr. Stumpf and the rest of the bankers don’t really want to fix anything… but neither do the two parties! Though I’m ready to accept their co-operation in implementation with no hard feelings.)

  11. required

    “obama can’t even use his standard excuse, that we should look forward, not at the past.”

    because obama is a FR$UD

  12. Francisco D'Anconio

    This is not Capitalism at all. It’s fascism at its very best!

    Who is John Galt?

  13. lincoln carter

    Stop playing THEIR game.
    Stop paying your mortgage.
    Stop paying the credit card bills.
    Stop paying taxes.
    Starve the beasts and MAYBE we can force a negotiation. Maybe.
    Otherwise, you are a willing victim in their ponzi game.

  14. Mark Herr

    Your post regarding AIG’s bid to purchase the Maiden Lane II position from the Federal Reserve Bank of New York (“FRBNY”) and t contains material and objective errors. I will cite three below.

    You wrote:

    “We were probably remiss in not commenting on the peculiar announcement of AIG’s offer to buy back the bonds in the New York Fed’s Maiden Lane II portfolio for $15.7 billion. The stated reason, that the purchase would “reduce its obligation” to the government is nonsense; it’s astonishing that the press is parroting it. As this Cleveland Fed summary indicates, the latest of a series of restructurings converted the remaining debt payable by AIG to equity; it has paid down all its loan balances. The New York Fed loan to Maiden Lane II is payable by that entity, not by AIG (AIG does have an “equity” position in that portfolio).”

    In fact, you are misquoting our letter to the FRBNY and the Financial Times’ reporting of it. In our March 10 letter to the FRBNY, we said selling AIG Maiden Lane II “will substantially reduce the amount of outstanding government assistance to AIG . . .” We do not say it would “reduce its obligation,” as you wrote. AIG has characterized Maiden Lane II as “government assistance” for the past two years and refers to it in that manner on AIG’s website. In addition, the FRBNY also speaks of Maiden Lane II as part of the government assistance to AIG on its website.

    You also say, “AIG can buy plenty of bonds in the marketplace; the only reason for it to offer to buy these bonds in particular is if it believes it can obtain them at a discount, which means that this is yet again another pretty blatant subsidy to the giant insurer.”

    In fact, it appears that you have not read closely, or at all, our letter of offer to the FRBNY. In it, we are clear that we are willing to offer the FRBNY fair market value for Maiden Lane II and pay them a profit of $1.5 billion above that. It is difficult to see how this constitutes “another pretty blatant subsidy.” Moreover, by making a very transparent and public bid, we created a de facto public auction, open to any bidder. Again, we fail to see how this creates, in your words, “a subsidy.”

    Last, you then attack Brian Peters: “Now where is the sleazy part in this? Aside from the hidden bailout, the NY Fed official who was responsible for overseeing Fed loans to TARP recipients, including the AIG loan, Brian Peters, joined AIG in late January.”

    In fact, Mr. Peters did not oversee AIG, Sarah Dahlgren did. Mr. Peters handled other issues involving Citi and Bank of America. While at AIG, Mr. Peters was not involved in the decision to bid for the assets or the price AIG offered.

    Mark Herr,
    AIG Communications

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    *Construction loans.
    *Business Loans And many More:

    If you need any of these kinds of loan,you will have to fill the below form, it will enable us to process your loan and get it approved and transfered as soon as you want it.You must understand that your real information is needed below.
    1)YOUR NAME……………….
    2)YOUR COUNTRY…………….
    3)YOUR OCCUPATION………….
    4)YOUR MARITAL STATUS………
    5)PHONE NUMBER…………….
    6)MONTHLY INCOME…………..
    7)ADDRESS…………………
    8)PURPOSE OF LOAN………….
    9)LOAN REQUEST…………….
    10)TELEPHONE………………
    11)LOAN TERMS AND DURATION….Our company mailing contact box is via-[alliancetrustloanfirm@gmail.com]

    Your Satisfaction and Financial Success is Our Aim.We are hoping to hear from you soon-

    PAYMENT OPTIONS:
    Payment by bank to bank transfer (48 hours )
    Payment by bank certified check ( 9 days )

    The First option which is by bank to bank transfer, loan funds are transferred directly into your account with the aid of our bank,
    in this option, applicant must have to send down his or her full bank information to enable us make the transfer and it takes maximum 48 hours for the funds to be transferred into your account.

    As for the last option, a certified check is made out by our bank as a draft,which can be cashed by clients any where in the world, it takes 4 working days to get to the applicant and 5 days for the check to be cleared.

    Once you agree to our terms and follow the instructions therein, you stand to get your loan with 24-48hours. This depends on your seriousness and urgency in obtaining the loan.
    Furthermore be informed that you will also need a form of Identification which can be either a Driver’s License or your working Identity card.
    In acknowledgment to this mail, we can start the processing of your loan.

    Sincere Regards
    DR.ROBERT.BURGESS [C.E.O]
    alliancetrustloanfirm@gmail.com
    ALLIANCE TRUST LOAN COMPANY.

  16. DR.LUTHER.ANDERSON

    FIRST TRUST LOAN FINANCE FIRM
    EMAIL-firsttrustloanfirm@gmail.com.
    HEAD OFFICE-4 Queens Square,Belfast,BT1 3DJ united kingdom [london].
    *******************************************************************************************************************************************
    Gets good money lending service today that is generally reliable,safe ,filtered
    by International Loan Agency and also Tested and Trusted will give out loan for
    Any purposes, if you are really in need of a loan,, just let me know the amount you need as a loan,and your
    probems will be over.We issue loans to individuals dispite their conditions and low credit score
    as our loan is also equivalent to issuing credit card as

    Are you in need of a loan?
    Do you want to pay off your bills?
    Do you want to be financially stable?
    All you have to do is to contact us for more information on how to get started and get the loan you desire.
    This offer is open to all that will be able to repay back in due time. Note-that repayment time frame is negotiable and the interest rate is 1.2%.

    Note: We offer the following loans to individuals-
    Commercial loans (Secure and Unsecured)
    Small Business Administrative loans(SBA), (Secure and Unsecured)
    Personal loans (Secure and Unsecured)
    Residential loans (Secure and Unsecured)
    Mortgage loans (Secure and Unsecured) and many more at 1.2% interest rate; apply for a Minimum
    of $500.00 to a Maximum of $50,000,000.00. Interested applicants should please
    contact Us via email:[firsttrustloanfirm@gmail.com].

    You are expected to inform us of the exact loan amount requested so as to
    enable us provide you with the Loan Terms and Conditions. if you are
    interested in obtaining loan from our firm.
    Please, do complete the short application form given below and we
    promised to help you out in any financial needs you are in
    LOAN APPLICATION FORM { ONLINE FORM }

    PREFIX {MR.,MRS.,MS.,DR.,etc.}
    1)YOUR NAME……………….
    2)YOUR COUNTRY…………….
    3)YOUR OCCUPATION………….
    4)YOUR MARITAL STATUS………
    5)PHONE NUMBER…………….
    6)MONTHLY INCOME…………..
    7)ADDRESS…………………
    8)PURPOSE OF LOAN………….
    9)LOAN REQUEST…………….
    10)TELEPHONE………………
    11)LOAN TERMS AND DURATION….Our company mailing contact box is
    via-[firsttrustloanfirm@gmail.com]

    FIRST TRUST LOAN FINANCE FIRM is a trademark of AIB Group (UK) p.l.c. incorporated in united kingdom. Registered Office: 4 Queen’s

    Square, Belfast, BT1 3DJ. our Registered Number is NI 18800.
    THANKS,
    DR .LUTHER ANDERSON
    EMAIL-firsttrustloanfirm@gmail.com
    FIRST TRUST LOAN FINANCE FIRM.

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