The first bail-out: NFIP accessed by manipulation of construction price data following Hurricane Katrina

Connect the dots.  Russell left a big one in his recent post, Where insurance finally meets the big bailout – AIG a massive ponzi scheme?

They [AIG]would sign a reinsurance contract with an insurance company, take a certain amount of money, and at the same time form a side agreement that essentially said: “We will not pay you on this policy.” Why would the insurance company do this: to lower their capital requirements. And since AIG did not perform much in the way of the services, they could kick some of the money back to the insurance company via an offshore entity which would allow the insurance company to write off all the money paid off to AIG, and then accept back part of the money back as tax free profits.

CLS has been leaving dots on the ALL Board for some time – here’s one from October 2007, for example.

Connect the dots in any fashion and they lead to a  bottom line “short” on reinsurance in the face of the nation’s largest disaster; a legal storm as claims were denied; and to the scheme for a bail-out from the US Treasury via the NFIP.

In a February 2007 report, Congressional Research Service identified two broad sets of post-Katraina claims-adjustment issues that might be relevant to Congress… One set of these relevant issues is centered on the previously discussed policy language on causation; and, the other…

…is the alleged adverse impact on insureds of computerized claims settlement systems and products. Continue reading “The first bail-out: NFIP accessed by manipulation of construction price data following Hurricane Katrina”

Musical Repeat for a New Reader

Christina Gombar was kind enough to write me this afternoon with some observations. We hope you stick around for a while and visit with us slabbers. The people here yearn for justice. Lately all its been is just-us. No one, no company should be above the law but when there is only just-us some have proven exempt. Meantime me, Nowdy and the gang will continue to beat the drum.


SLABBED Daily – April 6 (blow-out sequel to bail-out)

Congressional Oversight Panel to Call for Wiping Out Shareholders, Ouster of Top Brass at TARP Recipients from naked capitalism is a Monday morning wake-up call:

This is going to get interesting. The head of the Congressional Oversight Panel, Elizabeth Warren, is expected to issue a report this week calling on the Treasury to get much tougher with the big recipients of TARP funds. And if the report in the Guardian is right, the recommendations have been softened a tad so as not to be too hard on Treasury Secretary Timothy Geithner.

Elizabeth Warren, chief watchdog of America’s $700bn (£472bn) bank bailout plan, will this week call for the removal of top executives from Citigroup, AIG and other institutions that have received government funds in a damning report that will question the administration’s approach to saving the financial system from collapse. Continue reading “SLABBED Daily – April 6 (blow-out sequel to bail-out)”