More Blowback on the Fed and Treasury from AIG Bailout

Janet Tavakoli was the first one out of the gate this morning, calling for a General Fraud Audit of investment banks who received mortgage security related bailouts:

Goldman should not be exempt from the general fraud audit of mortgage securitizations that all of the former investment banks [Lehman, Bear Stearns, Morgan Stanley, Goldman Sachs , Merrill Lynch, and some foreign banks doing business in the U.S. (DMB Pp. 97‐107.)] should undergo

At ZeroHedge, Dan Ratigan is calling for Tim Geithner to be replaced as Treasury Secretary:

To stop the theft from continuing, it requires that the most basic rules of capitalism be applied to our banks and that our future national wealth be safeguarded by the US Government. The current custodian of America's wealth, Treasury Secretary Tim Geithner, is not doing a good job of either. The time for corrective action is now.

And Congressman Darell Issa, Ranking Member of the Committee on Oversight and Government Reform, has written a letter to NY Fed President William Dudley demanding the NY Fed:

...assist the Committee with its investigation of this matter, please provide the following information no later than close of business on Friday, November 13, 2009: All records and communications referring or relating to the FRBNY’s negotiationswith AIG’s CDS counterparties, including but not limited to:

a) Emails, phone logs and meeting notes of the following people: Timothy Geithner, Stephen Friedman, Tom Baxter, and Sarah Dahlgren;

b) Term sheets, including drafts, relating to AIG’s payments to its CDS counterparties;

c) Emails, phone logs and meeting notes referring or relating to public disclosure of AIG’s payments to its CDS counterparties including disclosure to the SEC.

The full letter is worth reading (Pdf)

Other related matters:

ZeroHedge again highlights its FOIA request for which the Fed has not yet provided information on:

all documentation that was part of the discussions between the Federal Reserve and Davis Polk with regard to the AIG bankruptcy. Furthermore, I would like to see all prepared materials by either Davis Polk or Morgan Stanley and presented to the Federal Reserve, as well as any documents indicating how and why the Fed decided to bailout AIG instead of pursuing a bankruptcy option for the company

ZeroHedge also highlights EPJ's background report on Mel Watt, who "gutted" Ron Paul's Audit the Fed Bill.