So the American taxpayer is sending money to stupid European bankers.
Why use such a harsh (and accurate) word, "stupid"?
One of the basic rules of banking and finance is to know your counterparty. If you have a contract with someone you ask "Are they able to uphold their end of the bargain?".
No one forced Deutsche Bank and the others to do deals with AIG, they voluntarily entered into these speculations, either to place bets for profit or to hedge other speculations. And profit they did, to the tune of hundreds of billions of dollars (euros, pounds).
You pays your money and you takes your chances.
Except when you can get your finance/politician buddies to take the money from the chumps in Peoria (or Topeka, Tuscaloosa, Schenectady and Bozeman).
These self-selected elites are very close to facing popular wrath and it won't be pretty.
Following up on "Goldman, Deutsche Bank and Others Got AIG Aid" we have this story from Reuters:
European banks declined to discuss a report that they were beneficiaries of the $173 billion bail-out of insurer AIG that has sparked political furor in the United States.
Goldman Sachs, Morgan Stanley and a host of other U.S. and European banks had been paid roughly $50 billion since the Federal Reserve first extended aid to AIG, the Wall Street Journal reported on Friday.
French banks Societe Generale and Calyon on Sunday declined to comment on the story, as did Deutsche Bank, Britain's Barclays and unlisted Dutch group Rabobank.
Other banks mentioned in the Journal's article include HSBC , Wachovia, Merrill Lynch, Banco Santander and Royal Bank of Scotland.
Separately, French newspaper Le Parisien newspaper on Sunday said that SocGen might have got $4.8 billion from the bailout and Calyon $1.8 billion....MORE