The only way to deal with this ridiculous Ponzi scheme is bankruptcy. The way to start that healing process, in our view, is by the Fed emulating the FDIC's treatment of DSL, withdrawing financial support for AIG and pushing the company into the arms of the bankruptcy court. The eager buyers for the AIG insurance units, cleansed of liability via a receivership, will stretch around the block.
By embracing Geithner, President-elect Barack Obama is endorsing the ill-advised scheme to support AIG directed by Hank Paulson et al at Goldman Sachs and executed by Tim Geithner and Ben Bernanke. News reports have already documented the ties between GS and AIG, and the backroom machinations by Paulson to get the deal done. This scheme to stay AIG's resolution cannot possibly work and when it does collapse, Barak Obama and his administration will wear the blame due through their endorsement of Tim Geithner
Sounds like all that Big Money Money paid to Rahm Israel Emanuel and others is going to turn out to be a good investment. The US will end up bankrupt and in default, but by then the usual suspects will have cashed out of their bailout-rescued investments and moved into Swiss francs and gold. I got more puts today, on GS XOM and CVX, and on MSFT just because I hate them. I'm making money like crazy off of this mess of waste, fraud and corruption. I just need to remember to get it all out of USD before the plug gets pulled.
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