Will We Remember 9-17 the Way We Remember 9-11?

In my last posting, I pointed out the incredible irony that the FDIC liquidity quagmire is $9.17 trillion and that the global market can expect to see the consequence of it on September 17. Symmetry? Irony? Are we going to declare war on rating agencies and derivative traders? Can we have a “shock and awe” aerial campaign on S&P, Moody’s, and Fitch? Can we have a Cabinet appointment of the Department of Home Finance Accountability? Can we declare a “Greenberg Zone” around 70 Pine St. in Manhattan and insure that we have a demilitarized zone cordon around it? Oh, that’s right, we’ve already done that! Where’s the yellow cake?

I was sitting down after a leisurely dinner looking across the hilltop to the home of Mr. Jefferson wondering WWJD? I figured, as he was a voracious reader, he’d pick up the August 2009 AIG financial statement, like I did, to see how we’re doing as shareholders in the stalwart financial institution we now own. Because, you see, I’m trying to make sense out of some numbers. I’m sure that the solution will turn out to be the absolute value of the Fibonacci sequence divided by the number of Goldman Sachs former executives employed by the Federal Reserve and the U.S. Treasury divided by 9.17. And in my quest for the mean of Phidias, I decided to do something more accessible – namely read the financial statement. And…

In the past 6 months, our total liabilities in AIG have reduced by $30.4 billion. That’s GREAT news and somewhat mysterious as the debt to the Federal Reserve Bank of New York actually rose by $432 million during the same period. And then there’s another mysterious thing-a-ma-jig that you see if you happen to look at the interest obligation to the Federal Reserve in that we accrued $2.9 billion in interest and amortization for the debt in 6 months of 2009 – money that apparently we don’t seem to need to integrate into our aggregate liabilities. Oh, and since we need to have a balance sheet that, well, balances, we LOST $30 billion in assets. Isn’t it cool that we lost less balance on one side of a Balance than on the other? And then, one final note. Isn’t it ironic that the Federal Reserve Bank of New York has the senior lien holder preference and the U.S. taxpayer – the one we were just told is lucky that it has been the beneficiary of government bailout investments that have been profitable – is fourth in line AFTER all other non-taxpayer interests (see the Reuters report of August 31, 2009 in which they extol the $14 billion Fed profit from bailout loans). It’s the FED, not the taxpayer that’s done well and it’s the FED, not the taxpayer who stands at the preferred front of the line.

Sooo, I went back to our Federal Reserve’s Flow of Funds Fun Filled Fact Sheet and I looked for the GREAT AIG news on the Table F.1 summary of Borrowing and Lending in the Credit markets and, if you look at the second significant digit in the 2009 net borrowing… drum roll please… you get the digits of the Fibonacci sequence. Almost. Kind of in the same “almost” category as the US Financial institutions were “almost” compliant with the IMF’s accountability standards reported on August 31, 2009 – in other words, NOT.


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