So, now we know, two thirds of the bail out money which went to AIG between October and the end of December wasn’t intended for AIG at all, but was passed through to others. The list includes Goldman Sachs, Morgan Stanley, Deutsche Bank, Societé Generale, and many others. And, if that wasn’t enough to make you choke on your coffee this morning, there’s the additional fuel of the AIG bonus story. OMG, this is just like totally over the top.
There’s a lot of outrage about this which is kind of being stoked by the media, and there’s some useful commentaries which are dealing with parts of the story. These three from Robert Kuttner Robert Reich and the America’s Future blog are ones to take cognizance of, I think. In Kuttner's view Obama's financial team is leading him to destruction. Reich raises his voice against the corruption, and so do the folks over at Progressive Breakfast in their morning release.
The outrage is directed at the upfront particulars, the bonuses and the pass-through laundering of bail-out funds. I think though there is a picture beginning to emerge of the structure of the Paulson-Bernanke bailout which raises a whole range of other issues. The banks continue to insist that their assets will come good with a rebound in the economy, and therefore their current pricing structure should be preserved.Yves Smith provided a major service this morning over at Naked Capitalism when she made available Bruce Krasting's discussion of the AIG bonusses and Tyler Durden's guest post on bailout spotting.