As I noted yesterday, the real question with the AIG bailout is who’s getting the money? AIG isn’t ‘getting it’. For all intents and purposes, AIG doesn’t even exist anymore. The company still has some more conventional insurance companies that remain profitable. But the part we’re dealing with is little more than a pass through at this point. The money we’re giving AIG is being used to make good on credit-default swaps, or de facto insurance policies AIG had with various banks and financial institutions. Basically, AIG was insuring the toxic assets.
So who are the counter-parties? Who’s getting the money.
The short and sweet of it is that it’s a secret.
Here’s what the Times‘ Joe Nocera explained last night on the Newshour …
Basically, the money has been handed over to the counterparties.
You know, there`s a saying now you hear on Wall Street, which is that it`s not a bailout of AIG. It`s a bailout of the counterparties. Now, who are these counterparties? In fact, we don`t know precisely, because the government won`t tell us. And AIG views this information as a trade secret.
Why AIG has any standing to have trade secrets at this point escapes me since the US taxpayer has already shelled out many times the companies worth to keep the company from going belly up.
And in case you missed it, AIG just sued the IRS over $300 million in unpaid taxes stemming from its “tax arbitrage” operations.