http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aaIuE.W8RAuU
I'd say more like Timmy played the "system" rather than saved the system.
Congress never agreed to the bailout money being spent for the purpose of buying
credit default swaps, the "People" would have strung them up if they had.
This should be seen for exactly what it was: The junkies were caught without a fix and Timmy copped them a score on money they fronted from us the taxpayer, even after we told congress in an exceptionally loud voice.....NO BAILOUT
The House heard "Us" but the Senate chose to just ignore "The People", so that Timmy could do his dealing, and now because of Timmy's dealings the FED is the proud owners of all the garbage that Timmy arranged to buy for them, and the 30 million dollar a month payment for it, has only just begun and the FED is now foreclosing on people to ensure that, that payment is met.
Saving the System
Treasury Secretary Timothy Geithner was head of the New York Fed at the time of the AIG moves. He maintained during Wednesday’s hearing that the New York bank had to buy the insurance contracts, known as credit default swaps, to keep AIG from failing, which would have threatened the financial system.
The hearing before the House Committee on Oversight and Government Reform also focused on what many in Congress believe was the New York Fed’s subsequent attempt to cover up buyout details and who benefited.
By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve.
This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.
Geithner’s Bosses
The New York Fed is one of 12 Federal Reserve Banks that operate under the supervision of the Federal Reserve’s board of governors, chaired by Ben Bernanke. Member-bank presidents are appointed by nine-member boards, who themselves are appointed largely by other bankers.
As Representative Marcy Kaptur told Geithner at the hearing: “A lot of people think that the president of the New York Fed works for the U.S. government. But in fact you work for the private banks that elected you.”
And yet the New York Fed played an integral role in the government’s bailout of banks, often receiving surprisingly free rein to act as it saw fit.
