Shephard Smith (FOX News)is reported that Tim Geithner may face jail time for trying to cover up his secret giveaway of taxpayer money to AIG creditors. The giveaway benefited not only American banking giants like Goldman Sachs but also European giants like Societe Generale.
What exactly did Geithner do? Here’s an easy way to understand it. When Lehman Brothers went bankrupt in 2008 it had to settle billions of dollars of its credit default swaps at pennies on the dollar.
But, when AIG was facing bankruptcy a few days later, Tim Geithner stepped in to loan AIG tens of billions of dollars so it could pay off its credit default swaps in full, at 100 cents on the dollar, to banks like Goldman Sachs, Societe Generale, and others.
And then, the news that came out through Bloomberg yesterday, the memos revealing that Geithner tried to cover up his munificence. He managed to get the embarrassing information about the full settlement deleted from the record and kept out of public view. And now he faces possible jail time for falsifying records.
But this isn’t the first time that Tim Geithner has funneled tens of billions of dollars in taxpayer money to private banks and hid the truth from the public.
After all, Geithner was president of the New York Fed when the amazing Bear Stearns deal went down. To briefly review that lollapalooza: Bear’s stock had closed on Friday at $30 a share. Over the weekend Jamie Dimon, CEO of J.P. Morgan Chase, agreed to buy Bear at $2 a share. And even at that price, he told Geithner on Sunday that he would need the Fed to guarantee the riskiest
Bear assets – i.e. the riskiest $30 BILLION of Bear assets. Geithner cut the deal.
Everybody said Dimon got the deal of the century, Bear at $2 a share and the New York Fed guaranteeing the riskiest $30 billion of the assets. But here’s the thing that makes me mad, and the real criminality involving both Geithner, Dimon and the Fed itself:
JAMIE DIMON WAS A "CLASS A" DIRECTOR OF THE NEW YORK FED AT THE TIME HE TALKED TIM GEITHNER INTO USING $30 BILLION OF FEDERAL RESERVE FUNDS (I.E. AMERICAN TAXPAYER MONEY) TO HELP HIM CUT THE DEAL OF THE CENTURY.
I put this information in capital letters because it was not reported at the time, and still is not being reported. Jamie Dimon was a highly influential figure at the New York Fed in the governance of its operations. Along with the other directors, he was Geithner’s boss.
The idea of him and Geithner secretly conniving to use $30 billion in taxpayer money and then not even informing taxpayers and Congress that they were both on the same side, both members of the New York Fed – to me that verges on the largest white-collar crime in American history.