AIG - a cover play?

Is it AIG that's playing us for fools or is it really Goldman Sachs?

From here: The roots of the linkage between Goldman Sachs and AIG go back to the closing months of the Bush administration, as the financial meltdown reached crisis proportions and key decisions were made that are now reaping the whirlwind. Remember who played a key role in deciding to bail out AIG? Henry Paulson, the Goldman CEO-turned George W. Bush Treasury Secretary. Paulson, according to a September 27, 2008 New York Times piece by Gretchen Morgenson, led a team of regulators and bankers in early September to determine what to do with the most severely wounded financial institutions. One of the participants in those meetings was Lloyd C. Blankfein, Paulson's successor at Goldman Sachs. Out of those meetings came the controversial and heavily criticized decision to allow Lehman Brothers, a Goldman competitor, to go belly up, and to bail out AIG. Starting with $85 billion from the Fed, taxpayers have pumped a total of $170 billion into the giant insurance company. The bailout was crucial to Goldman in that it permitted AIG to pay off its $12.6 billion debt to the firm, $8.1 billion of which was to cover AIG-backed credit derivatives. At a hearing of the House Financial Services Committee on February 11, 2009, Goldman Sachs CEO Lloyd Blankfein denied that his firm had a major stake in bailing out AIG. Blankfein told the panel that "with respect to our dealings with AIG, we were always fully collateralized and had de minimis or no credit risk at any given moment because we exchanged collateral....We had transactions with them. And if they had gone the wrong way, they would have owed us money. We assumed they'd pay it, but if they defaulted, they wouldn't pay us. We insured against that default. We didn't win money from it. We wouldn't have made money. But it would have protected our down side."

Throughout the past six months of economic crisis, Goldman has taken full advantage of what the government has to offer. On October 28, 2008, Goldman and eight other banks were the first to receive federal bailout money under the Treasury Department's Troubled Assets Relief Program (TARP). which was initiated by Paulson. On November 25, 2008, Goldman became the first bank in the nation to benefit from the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program (TLGP), issuing $5 billion in government-secured debt at 3.367%, substantially less than the market rate facing banks which issued unsecured debt. All told, Goldman has issued a total of $20 billion in government-guaranteed debt under TLGP. In their dealings with banks, both Treasury and the Fed have been subject to relatively minimal disclosure, in order to protect the proprietary interests of financial institutions, especially to prevent rumors of illiquidity or excessive debt from threatening a bank's viability.

No more Gitmo

Day before yesterday on the television program 60 minutes, the President elect Barack Hussein Obama came forward and made a fairly bold statement in public:

I have said repeatedly that I intend to close Guantanamo, and I will follow through on that. I have said repeatedly that America doesn’t torture, and I’m going to make sure that we don’t torture.

After being a helpless observer for the last eight years and in particular, after watching the systematic excision of liberties as depicted in the movie ‘Torturing Democracy’, I must say that it is a sign of change when the only person who has the power to close Guantanamo actually makes a statement that he is going to do so.

Depiction of Strappado by Bessonov Nicolay titled ‘Interrogation’, Oil on canvas, 1992.

Strappado is a form of torture that began with the Medieval Inquisition. In one version, the hands of the accused were tied behind his back and the rope looped over a brace in the ceiling of the chamber or attached to a pulley. Then the subject was raised until he was hanging from his arms. This might cause the shoulders to pull out of their sockets. Sometimes, the torturers added a series of drops, jerking the subject up and down. Weights could be added to the ankles and feet to make the hanging even more painful. It is alleged that this form of torture was also routinely used at Gitmo.