Wednesday, November 12, 2008

It's our money you're spending now


So you corporate guys get to be accountable to us, right?:

Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

``The collateral is not being adequately disclosed, and that's a big problem,'' said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. ``In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin.''

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.

The Fed made the loans under terms of 11 programs, eight of them created in the past 15 months, in the midst of the biggest financial crisis since the Great Depression.

``It's your money; it's not the Fed's money,'' said billionaire Ted Forstmann, senior partner of Forstmann Little & Co. in New York. ``Of course there should be transparency.''

Hmmm. Okay, at least you'll rein in your profligate spending?:
AIG is hurting so bad that we just gave them another $40 billion, while execs live it up at another luxury junket, this one costing $343,000. KNVX uncovered another high-priced conference taking place at the Pointe Hilton Squaw Peak Resort in Phoenix, AZ. They reported that AIG made efforts to disguise its presence, making sure no AIG iconography was out in the open. One hotel employee said that staff was forbidden from even saying the word AIG. AIG said seminars like this, which was for independent financial advisers who steer customers to AIG, are essential to its business. They also said that most of the seminar's costs would be picked up by other corporate sponsors. AIG said in a statement, "We take very seriously our commitment to aggressively manage meeting costs."
This 'conference' happened AFTER the pheasant shoot and the negative news AIG received from that. Slow learning curve or an incurable sense of entitlement?


Mahakal / מהכאל said...

I think there is a problem with AIG's entire business model.

ellroon said...

You mean greed, avarice, and arrogance are no longer in?