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Bailout

: Bailout Report

Maiden Lane LLCs: The Backdoor Bailout

By USLaw.com

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In late 2008, the New York Fed, then headed by now Treasury Secretary Timothy Geithner, created a special entities, Maiden Lane II and Maiden Lane II LLCs, to funnel $70 billion to 16 big U.S. and European banks whose failed “hedge trades” would otherwise have prevented a single bonus from being paid.

The Federal Reserve, Securities and Exchange Commission, and Treasury Department colluded to keep thisbackdoor bailout, which nowthreatens the careers of Timothy Geithner, secret.In a frantic back pedal announced the day before Goldman Saches announced it’s 2009 bonus payout, the Federal Reserveseeks to explain the unusual circumstances behind the AIG payments.

Along with surrendering $25.9 billion of collateral that had been previously posted by AIG with the counterparties, the purchase of the $46.1 billion of par value essentially made the counterparties whole.?

The publicly disclosed information from the secretive “Schedule A“, also known as the Amended Shortfall Agreement, reports the the aggregate notional value, aggregate total collateral posted and aggregate negative mark to market with respect to the credit default swaps which the US government made good on for the benefit of the following banks:

                                                                                                                  Aggregate                                                                Aggregate              Aggregate Total             Negative
Institution                                                   Notional Value          Collateral Posted         Mark to Market
Deutsche Bank                                                $  8,518,356,966        $     5,715,341,619        $ 3,644,691,001
Landesbank Baden-Wuerttemberg (George Quay)                  $     89,034,985        $                 0        $    40,937,631
Wachovia                                                     $    926,335,734        $       164,607,606        $   404,018,461
Calyon                                                       $  4,323,637,555        $     3,128,037,164        $ 2,413,600,219
Rabobank                                                     $    649,590,459        $       336,620,199        $   362,881,964
Goldman Sachs                                                $ 13,978,535,327        $     8,422,666,771        $ 7,998,529,640
Societe Generale                                             $ 16,424,803,684        $     9,568,581,132        $ 8,390,548,571
Merrill Lynch                                                $  6,223,719,622        $     3,110,396,153        $ 3,398,791,448
Bank of America                                              $    772,111,117        $       267,404,090        $   396,835,377
The Royal Bank of Scotland                                   $  1,131,034,073        $       624,290,063        $   601,061,184
HSBC Bank USA                                                $    155,675,217        $       149,724,900        $   131,700,553
Deutsche Zentral-Genossenschaftsbank (Coral Purchasing)      $  1,795,127,468        $       818,267,668        $   993,019,847
Dresdner Bank AG (ReMo Finance Inc.)                         $    398,443,938        $                 0        $   169,597,157
UBS                                                          $  3,833,585,715        $     1,306,638,258        $ 1,977,043,626
Barclays (BGI Cash Equivalent Fund II and Barclays)          $  1,537,250,236        $       889,155,039        $   976,019,953
Bank of Montreal                                             $  1,372,477,391        $       503,719,529        $   644,506,924
The following other banks were also bailed out: Barclays, Rabbobank, Danske, Banco Santander, Morgan Stanley, and Lloyds Banking Group.

Full post as published by Bailout Report on January 24, 2010 (boomark / email).

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