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Fed sitting on a pile of $47 bln in to be riches from AIG | Banking insight – Debt Insight

Things you must know  in this story:

NY FED owns $47 bln of AIG CDOs, it still has not auctioned. The FRBNY as it is known, has pushed back on efforts by AIG to buy this toxic package preferring to seell it down to multiple new owners.

Credit Suisse won the auction worth $6 bln in January and Goldman in February for Maiden lane II portfolio of sub prime MBS. The Fed still owns Maiden Lane II and a lot of collateral it received worth $47 bln

Today’s newsmakers elsewhere: Apple’s iPad to take 80% of Tablet market , Undercover billionaires who own even $5 bln in minority stakes in Public and Private companies unearthed by Bloomberg, Lloyds’ bonuses with executives eligible being picked and chosen “with malice” and Google smacked for hurting privacy with penalties of more than $16000 per day, and Spain the latest loser in horse trading as France “prefers to look away” and Lux will end up with the second seat on the Governing council.

 

Apparently this time one of the likely winners on the AIG portfolio should be Barclays and others as the Fed does not want all the bad eggs to go back to AIG or to go to the same holders, but I would not mind berated Goldman Sachs or even Credit Suisse catching more of the action. When the first auction was created the sub prime index was in the 40s , near 41 and when Goldman Sachs  bid $6 bln next month the index had climbned to 65 on the day of the auction a nearly 50% return for the investors who bought from the Fed at 47 in February

Goldman Sachs, Credit Suisse and Barclays approached the Fed to encourage Fed to let them bid for the entire tranche of $47 bln in one go

 

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