News that doesn't receive the necessary attention.

Monday, March 30, 2009

Architects of AIG and US ruin were in London

9/21/08: "Joe Cassano was the president of a subsidiary of AIG that 'lost' £5.5bn earlier this year, setting the insurer on a path to bankruptcy.
  • And today The Mail on Sunday can reveal that the dealings that brought it to the edge of collapse were done in London.

Last week, AIG was effectively nationalised with an £48bn loan from the US Federal Reserve to avert a collapse that would have triggered unimaginable consequences on the world's financial markets.

In March, when the losses were revealed, Mr Cassano, a 53-year-old New Yorker who had an office in Mayfair, left the company. Asked by The Mail on Sunday if he felt responsible for the AIG crisis, he smiled and said: 'I left there six months ago.'

Refusing to answer further questions, he went inside his four-storey townhouse in one of London's most exclusive streets.

  • Mr Cassano, who learned his craft on Wall Street, was one of the founding team in 1987 of AIG Financial Products. Effectively the insurer's banking unit, it sold cover to financial speculators, many involved in the American housing market.

Two decades on, Mr Cassano is one of several AIG executives facing a lawsuit accusing them of deceiving hundreds of thousands of investors who suffered huge losses in the latest crash on Wall Street. According to papers filed in New York's federal court,

His pitch was so convincing that many small investors sank substantial sums of their life savings into AIG shares.

A financial expert told The Mail on Sunday: 'I'm not going to call Cassano a crook but he was the head of the division that took AIG down. If the US government had not stepped in, and AIG had gone bankrupt, the knock-on effect at institutions around the world would have been disastrous.

Cassano moved to England in 1987 from the US but still owns a house in Westport, Connecticut. His division AIG FP sold credit default swaps (CDSs), which are, in effect, a type of insurance against an organisation going bust. AIG FP wrote CDS contracts with a range of investment banks and other financial groups. A CDS is linked to a specific type of asset, typically a company bond or other loan or package of loans. The buyer of the CDS pays a regular sum to the issuer. In return, if there is a default on the asset the issuer pays out a predetermined amount of money.

London has seen a boom in the credit derivatives market over the past ten years because of a combination of the

During the credit explosion the CDS demand was huge. By 2007 Cassano's division was providing guarantees mainly

  • through credit default swaps

on about $ 500bn of assets (£285bn).

In effect Cassano's business was underwriting a huge proportion of the global credit bubble -including the vast American subprime mortgage market. And as house prices in the US fell, the AIG books began to unravel. In December 2007, Martin Sullivan, chief executive of the whole of AIG, assured shareholders that the chances of the US housing bust leading to losses at AIG was 'close to zero'. But he confirmed AIG Financial Products had written off $1.1bn (£600m) because of its credit contracts covering American mortgages.

  • The bombshell came on February 11. PricewaterhouseCoopers, auditors to AIG, said there had been 'material weaknesses' in the standards of financial reporting at Cassano's division. Worse was to come. On February 29, AIG announced it was writing off $11.1bn (£ 5.5bn) on its CDS business.

Troops' fears over their life cover in war zone

By Jonathan Petre, Mail on Sunday British soldiers have expressed alarm that a scheme to insure them on the battlefield could have been put in serious jeopardy if the US insurance giant AIG had collapsed last week.

  • Most members of the armed forces top up inadequate Government compensation by joining the recommended private scheme PAX, which is underwritten by AIG.

Soldiers fighting in Iraq or Afghanistan tend to take out the maximum cover possible to double the money that will be paid out to them if they are wounded, or to their families if they are killed.

  • With high casualty rates --almost 200 servicemen or women have been killed in the two conflicts - manyms of pounds have already been claimed.

The British arm of AIG that operates PAX insisted yesterday it would have been able to meet its obligations if its troubled parent company had folded.

But at the height of the crisis, servicemen and women were expressing their fears on unofficial websites.

One anonymous posting on the British Army Rumour Service website was headed

  • Are Our PAX Policies In Safe Hands? It read:

The Ministry of Defence admitted yesterday that it had been so concerned about the situation it had sought assurances the scheme would continue if AIG collapsed. "...

Wednesday, March 25, 2009


This pathetic banner at the entrance of the American Museum of Natural History in New York City was photographed in March 2009 by Tom Nelson and posted on his blog. "Climate" Shake Down artists got B of A and the Rockefeller Foundation to sponsor it, per Tom Nelson's blog.

Sunday, March 8, 2009

Harrisburg, Pa. crowd rallies against tyranny of Obama

"The symbols of revolution were on full display,.

There was the famous Colonial flag with a coiled rattlesnake and the words
  • "Don't Tread on Me."
  • Another early American flag showed 13 stars arranged in a circle.
  • And then there were the tea bags hung from the brims of people's hats and ears.
Hundreds of protesters gathered at the Capitol in Harrisburg on Saturday afternoon to throw a "tea party" against President Barack Obama's $787 billion economic stimulus package.

"You are called to a new revolution today," conservative talk radio host Gary Sutton, of York's WSBA-910, told the crowd, estimated to have numbered around 1,000 by the State Capitol Police.
  • "This is about right and wrong," Sutton said.
"A government that is big enough to give you freedom is big enough to take it away," state Sen. Mike Folmer (R-48th District) told the protesters.
  • Cries of indignation and outrage against the stimulus plan and the president roared from the crowd. People held signs slamming Obama and other Democratic politicians as communists.
"End the socialist experiment!" a sign read.

"This is treason," said Mark Holloway, a self-employed contractor from Red Lion.
  • The consensus among protesters was clear:
  • The stimulus plan won't lift the country out of its economic crisis.
"This bill is going to reward people who are grossly irresponsible," said David Nace, a Lititz resident and co-owner of Wickersham Construction & Engineering Inc.

The president has also called for an additional $75 billion to stem home foreclosures.
  • Blasting Obama's proposals, protesters clamored for more tax cuts and reduced government spending to solve the country's economic troubles.
A tractor-trailer driver from Allentown, Dawn Blocker said she only worked 17 hours last week because there's just not enough freight to carry anymore.
The Harrisburg tea party hasn't been the only one of its kind in the country.
"This is America! How many of you people want to pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills?" he asked Joe Kernen on CNBC's "Squawk Box" program. "We're thinking about having a Chicago tea party in July. All you capitalists that want to show up to Lake Michigan, I'm gonna start organizing."

The rant became an instant Internet smash, generating nearly a million hits on the video-sharing Web site YouTube. The rant inspired conservative bloggers and pundits to organize tea party protests of their own.
With some notable exceptions, including the Harrisburg rally, other tea parties haven't attracted large crowds. The effectiveness and popularity of the tea party rallies is still debated.
  • "I'm a realist," said Andrew Emerick, of Baltimore. Asked whether the rallies will have any effect, he replied: "Probably not." Holding a "Don't Tread on Me" flag, the real estate investor is looking to the 2010 congressional elections as the point to direct change in fiscal policy.
Joe Sterns, communications director for the Commonwealth Foundation, a fiscally conservative think-tank group that organized the Saturday rally, said a Philadelphia tea party attracted only 50 people. The Village Voice reported a Boise, Idaho, tea party attracted a paltry four protesters.
"We cast the net far and as wide as we could for this rally," Sterns said.
Despite varying turnouts, conservative pundits say the tea parties aren't over. A grass-roots movement sponsored by Eric Odom, a conservative blogger, is hoping to inspire nationwide tea parties on tax day, April 15." via the Drudge Report. photo


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I'm the daughter of an Eagle Scout (fan of the Brooklyn Dodgers and Mets) and a Beauty Queen.