http://mailman.lbo-talk.org/2009/2009-October/015120.html
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http://www.bloomberg.com/apps/news?pid=20601109&sid=a7T5HaOgYHpE
New York Fed's Secret Choice to Pay for Swaps Hits Taxpayers
By Richard Teitelbaum and Hugh Son
> Oct. 27 (Bloomberg) -- In the months leading up to the September 2008
> collapse of giant insurer American International Group Inc., Elias
> Habayeb
> and his colleagues worked nights and weekends negotiating with banks
> that had bought $62 billion of credit-default swaps from AIG,
> according
> to a person who has worked with Habayeb.
[...]
> By Sept. 16, 2008, AIG, once the world's largest insurer, was running
> out of cash, and the U.S. government stepped in with a rescue plan.
> The
> Federal Reserve Bank of New York, the regional Fed office with special
> responsibility for Wall Street, opened an $85 billion credit line for
> New York-based AIG. That bought it 77.9 percent of AIG and effective
> control of the insurer.
>
> The government's commitment to AIG through credit facilities and
> investments
> would eventually add up to $182.3 billion.
[...]
> The New York Fed's decision to pay the banks in full cost AIG -- and
> thus American taxpayers -- at least $13 billion.
[...]
Well, here's a press release from the NY Fed today (HT: Michael Pollak):
http://www.newyorkfed.org/newsevents/news/markets/2012/an120823.html
New York Fed Sells Remainder of Maiden Lane III LLC Securities; Marks End of AIG-Related Assistance; Approximately $6.6 Billion Net Gain Generated for U.S. Public from the Portfolio
[...]
Today's announcement on ML III follows the successful wind-down of Maiden Lane II LLC (ML II) in February 2012, which resulted in a net gain of approximately $2.8 billion for the taxpayer. It also follows the January 2011 termination of the New York Fed's extension of credit to AIG, which produced approximately $8.2 billion in interest and fees. When taken together, the total net profit to taxpayers from the New York Fed's assistance to AIG and AIG-related facilities was $17.7 billion.