The AIG bonus hullabaloo may be a smoke screen

Everybody from President Obama down to pond scum like Barney Frank and Chris Dodd is yelling and screaming about $165 million in bonuses that AIG paid to employees who had contracts guaranteeing them those bonuses.

All this outrage is itself a hypocritical outrage because the stimulus bill that President Obama rushed to sign and that Barney Frank and Chris Dodd rushed through congress contains specific language that seems almost designed to guarantee those bonuses.

But I think this is all a sideshow and perhaps even a consciously designed smoke screen to hide the real thievery. The really interesting question is why everybody is so excited about $165 Million when AIG has already taken in $173 Billion of our money and has been rapidly paying out that money to a whole host of institutions all over the world with barely any transparency.

Here are the key question about this matter that we need an answer to before those tens of billions disappear and are no longer possible to recover.

Who is AIG paying those tens of billions out to? When did those recipients buy the the AIG mortgage derivative guarantees that AIG is paying off on with our money?

I think I saw the other day, for instance, that Goldman Sachs is a big recent recipient of money from AIG and that Goldman Sachs executives helped to design the TARP plan. Did Goldman Sachs buy those derivatives before or after it's executives "helped" Timothy Geithner and Ben Bernanke to design the TARP program?

I'd be willing to bet that there are smart folks out there who bought up AIG insurance guarantees at fire sale prices way below face value because they knew that they could get a little help from their friends in putting the government on the hook to pay off those guarantees at face value.

http://online.wsj.com/article/SB123743055512280701.html

Update: This guy makes a start at answering the question: http://www.globalresearch.ca/index.php?context=va&aid=12679 I've quoted him below.

During his testimony this week, Fed Chairman Bernanke felt compelled to say, and I quote:
"AIG exploited a huge gap in the regulatory system; there was no oversight of the financial products division. This was a hedge fund basically that was attached to a large and stable insurance company, made huge numbers of irresponsible bets, took huge losses" One knows the folks at Goldman are no fools. Were they going to put good money down for CDS that their counterparty (AIG) might not be able to honor because it made no reserve provisions? Or was the temptation of another big pay day just too tempting not to risk Other People's Money to play the game?
To date we have poured $160 billion into AIG -- this while others see the value of their homes cut in half, the better part of their 401(k)s wiped out, their government services significantly reduced, and other lending institutions diligently try to work out past due credits, taking significant mark-downs and extending due dates to keep industries and corporations alive.
This, as Goldman Sachs and Morgan Stanley are being covered 100 cents on the dollar on their speculative positions of intrinsically flawed CDS derivatives on which they gorged themselves to the bursting point. It is past time that a distinction be made between that part of AIG's business that was a "large and stable insurance company," and that part that was a "hedge fund," or better put, a casino. So the big question becomes, why should AIG's CDS be paid down 100 cents on the dollar when the rest of the country is taking at or near 50% haircut on the value of its assets?