2008 Financial Crisis

HONG KONG/SINGAPORE (Reuters) - U.S. Federal Reserve officials on Thursday said inflation is not an imminent threat and downplayed the consequences of the falling U.S. dollar. Philadelphia Federal Reserve Bank President Charles Plosser and Dallas Federal Reserve Bank President Richard Fisher both said the U.S. recovery was underway but noted risks to growth remain. "It's not going to be zippy," Fisher said of the recovery, adding he is concerned growth will fall short of 3 percent next year and unemployment will remain high for a long time. With firms increasing neither hiring nor investing, "inflation is obviously not an issue," he said in an ... Read Full Story

NEW YORK (Reuters) - Goldman Sachs Group Inc <GS.N> could have suffered dramatic losses if the federal government had not intervened to prop up American International Group Inc <AIG.N>, according to a government report. The report by the special inspector general for the government bailout program raises doubts about Goldman's previous claims that it was hedged against potential AIG losses. Last fall, as the financial services industry stood on the brink of collapse, the government stepped in with an unprecedented effort to rescue the system. AIG was among the companies that received billions of dollars from the U.S. Treasury's Troubled Asset Relief Program. If ... Read Full Story

(snippet) Though private fraud gets the bigger headline (think Bernie Madoff), fraud in federal government programs is now so pervasive that even the Obama press is taking notice. The scope of fraud in all federal programs dwarfs the corruption in the private sector the media loves to sensationalize. Consider the fraud in the Wall Street bailout. Here's just one example. This past week, the Inspector General for the TARP $700 billion bailout reported that taxpayers will "almost certainly" lose money on their investments in the "too big to fail" financial institutions. One reason, it’s safe to say, is contained in Neil Barofsky’s revelation that ... Read Full Story

WASHINGTON (Reuters) - The Federal Reserve Bank of New York used a weak negotiating strategy that failed to wring concessions from AIG trading partners last year, allowing them to reap nearly $30 billion in payments from U.S. taxpayers, a government audit report said on Monday. The New York Fed had little room to maneuver after bailing out American International Group <AIG.N> in September but failed to use what leverage it had when it later cut a deal with AIG counterparties, according to the report by the Troubled Asset Relief Program's special inspector general. This resulted in the New York Fed paying full market value ... Read Full Story

Officials managing the multibillion dollar bailout of insurance giant American International Group Inc. bungled the first rescue and may have overpaid other banks to wind down AIG's business relationships, a government watchdog says. The Federal Reserve Bank of New York — headed at the time by now Treasury Secretary Timothy Geithner — paid AIG's business partners face value for securities so they would cancel insurance-like contracts AIG had written and ease the firm's liquidity crunch. But at least one of those partner banks would have canceled the contracts for less, according to a report Tuesday from Neil Barofsky, the Special Inspector General for the ... Read Full Story