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KILLER_CLOWN
02-14-2011, 12:24 PM
Where Are the AIG Dividends? The Federal Reserve Is Getting Paid Back, Why Not Taxpayers?

Editor's Note: A republish from last Fall for readers who missed it the first time around. It's now been two years and taxpayers are still waiting for dividends on our remaining $49 billion invested in AIG. Meanwhile, the Federal Reserve is having NO TROUBLE collecting on its loan. In fact, as you will read, the bailout was STRUCTURED that way from the beginning - All to assure the Fed was paid back FIRST.

Reprinted with permission.

* By Peter Eavis (WSJ)

If there is one bailout where the U.S. Treasury should be uncompromising in protecting taxpayer interests, it is the rescue of American International Group.

Yet, nearly two years after its near-collapse, AIG has yet to pay any cash dividends to the Treasury on the $49 billion of public money it still has invested in the company.

That fact is a jarring reminder of the big compromises the government made in shoring up AIG—and the potential conflicts the Treasury still has to navigate as it tries to exit the company.

AIG is making payments on the government support provided by the Federal Reserve. In fact, the bailout was deliberately structured so the Fed effectively gets paid ahead of the Treasury. Even so, few would have expected that, for this long, AIG would be paying employees, creditors and policyholders, but not compensating taxpayers on nearly $50 billion of their money.

One of the reasons is that the government believed AIG would struggle to find the cash to pay the 10% dividend rate on its preferred shares. That is why, in April 2009, the Treasury swapped $40 billion of AIG preferred shares for new, more lenient preferreds. Unlike the first set, which left the company on the hook for any unpaid dividends into the future, the new preferreds don't.

In foregoing cash payments on the preferreds, the Treasury has effectively placed its hopes on getting paid back later through funds raised via a common-stock offering. In theory, once the Fed has been repaid and AIG restructured, private investors should be more willing to buy the company's shares.

The government could convert its preferreds into common stock that it could then sell in the market, a strategy it has taken with Citigroup. But there is one difference: Citi made its payments of over $2 billion in cash dividends on Treasury preferreds before they were either repaid or swapped into common shares and other securities.

Making matters worse, the Treasury now faces a freeloader problem. Forgoing cash dividends on preferreds supports the value of AIG's common stock, and is effectively a giveaway to outside holders of those shares.

True, the Treasury also effectively owns nearly 80% of AIG's common shares, a stake it acquired during the bailout. But the remaining 20%, owned by private shareholders whose interests were never supposed to be protected by the bailout, are benefiting from the Treasury's lenience.

One way to avoid this might be for the government to decide that AIG should start paying the dividends on the $49 billion of preferreds, or at least a portion of them. True, the Treasury's existing holding of common stock might lose some of its value. But it would be getting hard cash today—and showing private common holders that there are risks to freeloading off the government.

Two years on, the taxpayer deserves nothing less.

http://dailybail.com/home/where-are-the-aig-dividends-the-federal-reserve-is-getting-p.html

Jaric
02-14-2011, 12:30 PM
"Why Not Taxpayers?"

Well that's generally how theft works. If you pay the money back it's called a loan.

KILLER_CLOWN
02-14-2011, 12:33 PM
"Why Not Taxpayers?"

Well that's generally how theft works. If you pay the money back it's called a loan.

True, although it doesn't really make any of us feel better.

Jaric
02-14-2011, 12:34 PM
True, although it doesn't really make any of us feel better.

God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.

KILLER_CLOWN
02-14-2011, 12:35 PM
God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.

Ok i feel better already, time for a "happy thoughts" nap. :D

Jaric
02-14-2011, 12:39 PM
Ok i feel better already, time for a "happy thoughts" nap. :D

I find pot helps for that.

In all seriousness though, it's not like getting enraged about this is going to do anyone any good. What can us Plebs really do about the situation?

KILLER_CLOWN
02-14-2011, 12:49 PM
I find pot helps for that.

In all seriousness though, it's not like getting enraged about this is going to do anyone any good. What can us Plebs really do about the situation?

I dunno i guess it's something in the water that makes us docile creatures. It would help if we could hold those elected accountable for watching out for us. Perhaps the elections are rigged as well, i mean look at Harry Reid and tell me he won an honest election. It's also possible most voters have no clue as to what they're voting on other than lamestream media sensationalism.

KILLER_CLOWN
02-14-2011, 02:47 PM
The Federal Reserve Sponsors PROPAGANDA Contest On YouTube - End The Fed Movement Fires Back With GENIUS

http://dailybail.com/storage/stalin%20propaganda%20poster.jpg?__SQUARESPACE_CACHEVERSION=1297406102633

There are Brian Sack fingerprints all over this, not unlike daily S&P 500 futures.

Long live Mark Pittman, champion of Fed transparency.

---

From the St. Louis Fed website:

* The St. Louis Fed is sponsoring a YouTube video contest. We want your original video, illustrating the importance of an independent central bank. And not just the independence of the Federal Reserve, but central banks in general. What makes independence for a nation's central bank important? Why should they steer clear of politics? How does independence affect inflation and economic activity? Let us know through your video creation!

Here is the propaganda video advertising the propaganda video contest:

<iframe title="YouTube video player" width="640" height="390" src="http://www.youtube.com/embed/PuN_EGb6DoQ" frameborder="0" allowfullscreen></iframe>

* Prizes will be awarded to the top four videos:

* First place: $1,000 U.S. Savings Bond
* Second place: $750 U.S. Savings Bond
* Third place: $500 U.S. Savings Bond
* People's Choice: $250 U.S. Savings Bond

In response to this blatant propaganda effort, the good folks at Economic Policy Journal are sponsoring their own, parallel End The Fed video contest. And the prize for the winner?

* The St Louis Fed awards a series of prizes, the first one being a $1,000 face value U.S. Savings bond, that will be worth when you receive it only $500 and won't be redeemable at $1,000 for 17 years (Good luck inflation wise with that)

* Our award only goes to the top prize winner, but it will be a one ounce gold coin (currently worth approx. $1400). You will be able to sell it immediately for its full value, if you choose, or hold as it protects you against Fed created inflation.

---

Here's how one 19th-century "YouTuber" depicted Andrew Jackson slaying that "Many-Headed Monster," the Second Central Bank of the United States.

http://en.wikipedia.org/wiki/Second_Bank_of_the_United_States

http://dailybail.com/storage/jackson%20bank%20monster.jpg?__SQUARESPACE_CACHEVERSION=1297407196748

http://dailybail.com/home/the-federal-reserve-sponsors-propaganda-contest-on-youtube-e.html

Amnorix
02-15-2011, 06:00 AM
The Fed's profits basically get turned over to the Treasury anyway, so boom goes your silly article. Thanks for playing.

The Fed will return about $45 billion to the U.S. Treasury for 2009, according to calculations by The Washington Post based on public documents. That reflects the highest earnings in the 96-year history of the central bank. The Fed, unlike most government agencies, funds itself from its own operations and returns its profits to the Treasury.

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/11/AR2010011103892.html

KILLER_CLOWN
02-15-2011, 07:36 AM
The Fed's profits basically get turned over to the Treasury anyway, so boom goes your silly article. Thanks for playing.



http://www.washingtonpost.com/wp-dyn/content/article/2010/01/11/AR2010011103892.html

If you believe that i have a bridge to sell you.

eazyb81
02-15-2011, 07:51 AM
If you believe that i have a bridge to sell you.

So what do you think happens to the Fed's profits?

KILLER_CLOWN
02-17-2011, 07:16 AM
So what do you think happens to the Fed's profits?

I suppose you're gonna tell me it somehow ends up back in the taxpayers pocket?

KILLER_CLOWN
02-17-2011, 07:16 AM
Cut Benefits to Bankers, Not Public Services (One Good Cut)

<iframe title="YouTube video player" width="640" height="390" src="http://www.youtube.com/embed/Y-LjL2yyVZo" frameborder="0" allowfullscreen></iframe>