Obama Hypocrisy 2.0: President Blasts AIG Bonuses; But Forgets Geithner Wrote The AIG Bailout!

The Obama administration is highly critical over the recent AIG executive bonuses controversy. The administration is once again trying to blame the Bush Administration for its faulty bailout which enables AIG to pay out such bonuses using tax-payer funds.

Reality Check: Obama and his administration need to look in the mirror! Last fall, Treasury Secretary Tim Geithner not only consulted with then-Secretary Hank Paulson, it was Geithner, not Paulson, who put together the original rescue plan for the American International Group!

Bloomberg reports:

American International Group Inc., barraged by criticism on how it’s using $173 billion of taxpayer money, faces demands from President Barack Obama to rescind or repay $165 million in bonuses.

“It’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million,” said Obama at the White House speech today. “How do they justify this outrage to the taxpayers who are keeping the company afloat?”

"These people may have a right to their bonuses but they don't have a right to their jobs forever," Barney Frank said on NBC's "Today" program.


"The federal government now is the 80 percent owner (of AIG)," Frank said. "These bonuses are going to people who screwed this thing up enormously ... Since the federal government ... now essentially owns that company, maybe it's time to fire some people."

Well let's revisit something: Timothy Geithner, Obama's own whiz kid WROTE THE AIG BAILOUT PLAN!

Mr. Geithner's involvement in several ultimately ill-fated efforts to buttress the American financial system is the very reason some Wall Street C.E.O.'s -- a number of whom spoke on the condition of anonymity for fear of piquing the man who regulates them -- question whether he's up to the challenge.

''We have only two things to say about Tim Geithner, who we do not know: A.I.G. and Lehman Brothers,'' said Christopher Whalen of Institutional Risk Analytics. ''Throw in the Bear Stearns/Maiden Lane fiasco for good measure,'' he said.

''All of these 'rescues' are a disaster for the taxpayer, for the financial markets and also for the Federal Reserve System as an organization. Geithner, in our view, deserves retirement, not promotion.''

''He was in the room at every turn of the crisis,'' said another executive
who participated in several such confidential meetings with Mr. Geithner. ''You can look at that both ways.''

Behind the scenes, Mr. Geithner was the point person for weeks of sleep-deprived Bailout Weekends. It was Mr. Geithner, not Mr. Paulson, for example, who put together the original rescue plan for the American International Group.

And, of course, Mr. Geithner also oversaw and regulated an entire industry whose decline has delivered a further blow to an already weakened American economy. Under his watch, some of the biggest institutions that were the responsibility of the New York Fed -- Bear Stearns, Lehman Brothers, Merrill Lynch and most recently, Citigroup -- faltered. While he was one of the first regulators to smartly articulate the potential for an impending disaster, a number of observers question whether he went far enough to stop the calamity.

Now, Obama even has the guts to ask Geithner to punish AIG!

Noting that AIG has "received substantial sums" of federal aid from the federal government, Obama said he has asked Treasury Secretary Timothy Geithner "to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole."

Geithner and Obama are both in over their heads and the consequence may be severe! As Dick Morris said on "Hannity" tonight, Obama is not only a socialist, but incompetent!

An incompetent socialist running our country and over-seeing our economic crises -- what a recipe for disaster!

But remember, we were all told to over-look Geithner's tax cheating "hiccups" because he is a "uniquely" qualified super-genius!

If this is genius, then I'll settle for stupid, but responsible government.

Was The American Economy 500 Dow Points and Only Hours Away From Total Economic Armageddon? Financial Terrorism?

UPDATE: Felix Salmon at Portfolio.com debunks this as myth.

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This is really, really scary and freaky and just plain weird.

This happened last September, this interview was conducted three weeks ago, and it hit the blogs and Rush Limbaugh only a few days ago?

I'm pretty confused. This is a big, BIG deal!

Via Atlas Shrugged:

When President Hussein was campaigning and the "economic crisis" hit, he did not think it pressing enough to leave the campaign trail, but now we should push through a trillion dollars in legislation without oversight because a few weeks later the King deems it urgent?




Capitalism Gone Wild reported:
Rep. Paul Kanjorski of Pennsylvania explains what former Treasury Secretary Paulson and Fed Chairman Bernanke told congress during the September 2008 closed door session. During the first third of the video an enraged caller is ranting to Rep. Kanjorski about how wasteful the first $700 billion bailout was. The best part is 2 minutes and 15 seconds into the tape where Rep. Kanjorski reveals what Paulson and Bernanke told congress that shocked them into supporting the first $700 billion bailout.

On Thursday Sept 15, 2008 at roughly 11 AM The Federal Reserve noticed a tremendous draw down of money market accounts in the USA to the tune of $550 Billion dollars in a matter of an hour or two. Money was being removed electronically.

The Treasury tried to help, opened their window and pumped in $150 Billion but quickly realized they could not stem the tide. We were having an electronic run on the banks. So they decided to closed down the accounts.Had they not closed down the accounts they estimated that by 2 PM that afternoon. Within 3 hours. $5.5 Trillion would have been withdrawn and the entire economy of the United States would have collapsed, and within 24 hours the world economy would have collapsed.

Kanjorski also explains why Paulson spent the bailout money differently than he originally proposed.

Some other gems from the recording:It would have been the end of our economic and political system.

We would have had to spend 3 to 4 Trillion dollars to buy up all the toxic assets. But we didn't have that much we only had 700 Billion.

Without a banking system you don't have an economy.We are no better off now than we were three months ago.

Someone threw us in the middle of the Atlantic ocean without a life raft. We are trying to determine which is the closest shore and whether there is any chance in the world to swim that far. We don't know.

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Pamela at Atlas also adds:



In the video, Kanjorski says this occurred on Thursday, September 15, 2008. September 15th was a MONDAY. THURSDAY was .......SEPTEMBER 11, 2008

This was a Financial Terrorist Attack on the seventh anniversary of 9/11. Aren't the American people entitled to know who was behind the run on the banks?

Why was this kept from the American people before the most important election in US history? And why did Obama treat it as an unimportant incident - accusing McCain of grandstanding when McCain left the campaign trail and flew to Washington? Remember what President Hussein said? "They'll call me if they need me."


Rush Limbaugh apparently commented earlier in the week on this:

The question is who was doing this? Who was withdrawing all this money? And the next question is why? That's where my mind starts exploding, and this is dangerous to have these explosions going this way. Could it have been George Soros? Could it have been a consortium of countries -- Russia, China, Venezuela -- countries that are eager to have Barack Obama elected because they know that will make it easier for them to continue their own foreign policies in the world?

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We found this NY Post article from September 21st, 2008.

The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell The Post.

Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level - a 22 percent decline! - while the clang of the opening bell was still echoing around the cavernous exchange floor.

According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning. The panicked selling was directly linked to the seizing up of the credit markets - including a $52 billion constriction in commercial paper - and the rumors of additional money market funds "breaking the buck," or dropping below $1 net asset value.

The Fed's dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt.

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The Post goes on to point out that the $700 Billion TARP bailout was intended for exactly this purpose. The "stabilization" of the "troubled-assets" was not simply to allow the banks to lend credit to businesses and individuals. It was was to avoid a total economic collapse due to a completely bankrupt banking system.

This whole story is dubious and fishy. More to follow.