As chairman of New York Fed, Obama's treasury secretary essentially gifted Goldman Sachs billions of taxpayer dollars

(Gawker) -- Thanks to Bloomberg News, we now have a good idea how much of that $13 billion pass-through bailout Goldman Sachs got from AIG last year was pure taxpayer-financed gravy: $5.2 billion, courtesy Tim Geithner. AIG collapsed last year in part because it had written insurance policies on billions of dollars in stupid bets made by Goldman, Merrill Lynch, Deutsche Bank and others. Since it was functionally bankrupt, last September AIG thought it would be able to convince those banks to accept significantly less than face value on the credit default swaps it had sold them...Then a funny thing happened: The New York Fed opened an $85 billion credit line for AIG, staving off bankruptcy with a massive influx of taxpayer dollars and effectively taking control of the insurer. Habayeb was pushed aside as chief negotiator with Goldman and the other banks on the issue of how much AIG owed for those swaps and replaced by Tim Geithner, then the chairman of the Federal Reserve Bank of New York...We'll never know how much Goldman would have accepted in the end, or how much the other banks would have accepted, or if one or all of them would have forced AIG into bankruptcy. But we know this: AIG's target was 60 cents on the dollar, and after Geithner turned on the taxpayer-financed spigot the banks got everything...LINK