Thursday, October 28, 2010

Tales from Bailout Nation Pt. XXVII

...and like that, it's gone.

The special inspector general for the Troubled Asset Relief Fund (TARP) has reported that the Treasury Department’s initial estimates of the cost of the American International Group bailout are likely too low, according to Bloomberg. In a report on Tuesday, Neil Barofsky said the government’s latest projection of a $5 billion loss on AIG’s TARP investment “represents a dramatic shift from the $45 billion loss that Treastury had projected in its AIG investment just six months earlier.”

Barofsky acknowledged that there has been improvement in the situation over the past six months, but said the dramatic revision was likely more a product of “a change in Treasury’s methodology for calculating the loss,” and called the discrepancy a “serious question.” However, a Treasury official defended the estimate and insisted that the methodology has remained consistent, clashing with claims from the watchdog that the latest estimate “fails to meet basic transparency standards,” for withholding information about a new calculation protocol. The Treasury official said the lower loss estimate treats the government’s AIG position like common stock due to recent a recapitalization transaction announcement.

$40 billion makes like Keyzer Soze.

You wouldn't be blamed one bit for thinking no one knows what the hell is happening here and also thinking this stinks to high heaven.

Barofsky has appeared to be a stand-up guy in watch-dogging Bailout Nation so if we are taking any sides in this, it's got to be his.

Apply Occam's razor: if General Motors can simply draw from a seperate line of TARP credit and apply it to original TARP loan and then lie about it claiming the retirement of that debt was from sales revenue, what's to prevent the Treasury-AIG partnership from engaging in similar shenanigans?

Given their track record why should we believe them?

Instead of scolding the electorate or opining that voter frustration is due to poor "salesmanship", perhaps this country's electoral leadership should look at the fact that they have exercised such malfeasance and have done so in such a dishonest fashion that the country's default position on everything they do and say is... You Lie!

No comments: