Talk:American International Group/Archives/2015

What is the history prior to 2008?

In the article it says the collape happened because of their down rating, but what caused that? How did the housing market affect AIG? What governmental pressures were on AIG to take risky loans? What is the backstory here? Does anyone have referrences or somewhere to look for such information? 65.208.160.194 (talk) 00:19, 26 March 2009 (UTC)

• Here below are sources that talk about the background and history. See also Subprime mortgage crisis. -- Yellowdesk (talk) 05:08, 12 September 2009 (UTC)

History and some sources

• Cassidy, John (2008-12-01). "Anatomy of a Meltdown: Ben Bernanke and the financial crisis". The New Yorker. Retrieved 2008-11-29. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)

• Appelbaum, Binyamin (2008-11-23). "Banking Regulator Played Advocate Over Enforcer: Agency Let Lenders Grow Out of Control, Then Fail". Washington Post. pp. A01. Retrieved 2008-12-03. {{cite news}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)

• www.realclearmarkets.com identifies significant articles in one place.

• Morgenson, Gretchen (2008-12-06). "Debt Watchdogs: Tamed or Caught Napping?". New York Times. Retrieved 2008-12-7. {{cite news}}: Check date values in: |accessdate= (help); Cite has empty unknown parameter: |coauthors= (help) Part of a series of articles entitled The Reckoning.

• Becker, Jo (2008-12-20). "White House Philosophy Stoked Mortgage Bonfire". New York Times. Retrieved 2008-12-22. {{cite news}}: Unknown parameter |coauthors= ignored (|author= suggested) (help) Part of a series of articles entitled The Reckoning.

• Blodget-Why Wall St. Always Blows It

• Lewis, Michael (2009-01-04). "The End of the Financial World as We Know It". New York Times. Retrieved 2009-01-07. {{cite news}}: Unknown parameter |coauthors= ignored (|author= suggested) (help) (Opinion piece).

• Gross, Bill (July 2005). "Fire!". Investment Outlook. PIMCO - Pacific Investment Management Company, LLC. Retrieved June 20, 2009.

• Useful access to Bill Gross's prescient writings: Pimco Content Archive

• Leonard, Devin (June 20, 2009). "Treasury's Got Bill Gross on Speed Dial". New York Times. Retrieved June 20, 2009. {{cite news}}: Cite has empty unknown parameter: |1= (help)

• Balzli, Beat (July 8, 2009). "The Man Nobody wanted to hear: Global Banking Economist Warned of Coming Crisis". Spiegel Online. Retrieved July 19, 2009. {{cite news}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)

• Lewis, Michael (August, 2009). "The Man Who Crashed the World". Vanity Fair. Retrieved July 31, 2009. {{cite news}}: Check date values in: |date= (help)

• Walsh, Mary Williams (July 30, 2009). "After Rescue, New Weakness Seen at A.I.G." New York Times. Retrieved July 31, 2009.

Quotations

• Taibbi, Matt (March 22, 2009). "The Big Takeover: How Wall Street Insiders are Using the Bailout to Stage a Revolution The global economic crisis isn't about money - it's about power". Rolling Stone. Retrieved July 19, 2009. (This link via CommonDreams.org

If you look at the weekly H4 reports going back to the summer of 2007, you start to notice something alarming. At the start of the credit crunch, around August of that year, you see the Fed buying a few more Repos than usual - $33 billion or so. By November, as private-bank reserves were dwindling to alarmingly low levels, the Fed started injecting even more cash than usual into the economy: $48 billion. By late December, the number was up to $58 billion; by the following March, around the time of the Bear Stearns rescue, the Repo number had jumped to $77 billion. In the week of May 1st, 2008, the number was $115 billion - "out of control now," according to one congressional aide. For the rest of 2008, the numbers remained similarly in the stratosphere, the Fed pumping as much as $125 billion of these short-term loans into the economy - until suddenly, at the start of this year, the number drops to nothing. Zero.
The reason the number has dropped to nothing is that the Fed had simply stopped using relatively transparent devices like repurchase agreements to pump its money into the hands of private companies. By early 2009, a whole series of new government operations had been invented to inject cash into the economy, most all of them completely secretive and with names you've never heard of. There is the Term Auction Facility, the Term Securities Lending Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility and a monster called the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (boasting the chat-room horror-show acronym ABCPMMMFLF). For good measure, there's also something called a Money Market Investor Funding Facility, plus three facilities called Maiden Lane I, II and III to aid bailout recipients like Bear Stearns and AIG.

None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself - or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include "deliberations, decisions and actions on monetary policy matters." The exemption, as Foss notes, "basically includes everything." According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.