Comments on: The inexplicable AIG waiver http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: justanotherjoe http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16313 Thu, 01 Jul 2010 04:16:13 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16313 pardon me..that’s Dewey, Cheatum and Howell…

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By: justanotherjoe http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16311 Thu, 01 Jul 2010 04:13:40 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16311 It appears I’ve opened a can of worms and Howey, Cheatum and Howell have stepped up to explain the intricacies. Nothing has changed. The deal was a bad deal for the U.S. public. A due diligence was never done of this deal and the government left contracts in place between AIG and their employees that should have been a deal killer under any other circumstances. No one of sound mind would have forked over $85 Billion dollars without at least some concessions or posturing. The U.S. Govt just flat out gave them the bucks, no questions asked.

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By: HBC http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16309 Thu, 01 Jul 2010 03:16:44 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16309 This odious financial suicide note opened the floodgates for Fannie Mae to compensate questionable mortgage lenders by buying up their notes at full balloon pop, with no hope of recourse to anyone caught in the middle, never mind the taxpayer. And there went the market with it.

A search of the document fails to return any inclusion of the words “of sound mind” on the part of anyone signing it. So, no, there ain’t no sanity clause.

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By: cmurphy186 http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16307 Thu, 01 Jul 2010 03:06:35 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16307 Someone,

You may well be correct that such a waiver is a standard term and you are certainly correct that such a waiver is a “serious concession and it’s not given up without something in return”.

But the fact is this concession could have been forced because the counterparties WERE getting something very serious in return, payment on their CDS’s at par rather than what they would have recieved had AIG failed. Which is what would have happened absent the Fed bailout. In fact the failure to extract this concession is of a piece with the Fed’s failure to negotiate a haircut.Both instances were simply handouts to the banks.

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By: OnTheTimes http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16305 Thu, 01 Jul 2010 00:49:32 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16305 someone, the waiver was not in the CDS, it was in the document that gave money to Goldman, and gave nothing to AIG. The waiver may be boilerplate between two parties who receive some value, but AIG didn’t receive any value at all.

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By: someone.com http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16299 Wed, 30 Jun 2010 20:37:15 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16299 Justanotherjoe,

No. They agreed to use the standard terms that everyone uses. That language, or language of similar meaning is boilerplate in just about every credit default swap termination agreement. The notion that there is anything unusual about it is just silly. In fact the documents look boringly like every other CDS termination agreement. I don’t know anything about who did the deal or any of that other stuff in your rant, but I do know that.

If you go to any law firm that handles these agreements – reputable or otherwise – and look at their standard docs, it’ll have those terms. They’ll take them out, if the client wants them taken out, but it’s a serious concession and it’s not given up without something in return. That’s pretty rare though, because the whole point of the CDS termination is that everyone agrees that by making the payment, the agreement has been fully satisfied and everyone can go their separate ways and not worry that next month they’ll have to defend a lawsuit for breach of contract.

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By: justanotherjoe http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16296 Wed, 30 Jun 2010 19:23:43 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16296 Ask Mr. McCain how he voted on the recent package to extend unemployment benefits for those America’s that he was so worried about that would get caught in the crossfire if this company filed for bankrupsy. Or perhaps those weren’t the American’s he was thinking about in his statement above?

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By: justanotherjoe http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16295 Wed, 30 Jun 2010 19:11:15 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16295 By the way fellow Arizonian’s ask Mr McCain to explain the following:

“A day after he dismissed a federal bailout for American International Group, Republican John McCain announced Wednesday that circumstances had forced him to shift his position and that he supported the proposed $85 billion rescue of the insurance giant.
McCain, who in recent days has slammed what he called Wall Street greed and corruption for causing the latest downward spiral of the stock market, said he had to change his position on AIG to protect millions of Americans who could be hurt if the company was forced to seek bankruptcy protection.
“The government was forced to commit $85 billion,” McCain said in a statement. “These actions stem from failed regulation, reckless management and a casino culture on Wall Street that has crippled one of the most important companies in America.”

hmmmmmm wonder where Mr McCain stands on Wall Street Reform today. Isn’t it time for a changing of the guard in Arizona?

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By: Woltmann http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16294 Wed, 30 Jun 2010 19:10:23 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16294 Nothing we can do about it, Big Money owns all the chumps in the US Senate, the Fed and Treasury. As long as Money calls the shots, they have carte blanche and we are screwed ..

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By: justanotherjoe http://blogs.reuters.com/felix-salmon/2010/06/30/the-inexplicable-aig-waiver/comment-page-1/#comment-16293 Wed, 30 Jun 2010 18:55:29 +0000 http://blogs.reuters.com/felix-salmon/?p=4500#comment-16293 someone.com..so in legal terms, the two thieves have agreed not to steal from each other? This thing smelled from day one. Henry Paulson was the one behind this deal. First off, most of AIG’s employees were not in America. They are scattered across the globe. So the impact of this company failing would have probably had minimal impact on any given country. This was really all about giving Goldman billions in a back door scheme. This deal was cooked up by Paulson and the Feds on Friday and done by Sunday. No due diligence was done nor were there any conditions set for bailing this company out. Like requiring that the automatic multi-million bonuses to the Financial Products group in London be null and void in order to save the company. None of these guys would ever in a millions years have done a deal like this if is was their own money at risk. But they had no problem with it since it was yours and mine they were risking.

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