Extended interview with top TARP cop, Harvard Professor, Elizabeth Warren. Shes sassy and real and tells it like it is…

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Today, a Bloomberg story revealed that under Timothy Geithner’s leadership, the Federal Reserve Bank of New York told AIG to withhold details from the public about its payments to banks during the crisis. This information was discovered when emails between the company and the Fed were requested by representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The emails requested by Issa span five months beginning in November 2008. If five months of emails reveal information key to our understanding of the aftermath of the crisis, imagine what 10 years of emails could contribute to our understanding of its causes. We believe the AIG emails and other internal company documents are the ‘black box’ of the financial crisis. If we understand the failure of AIG, we will more fully understand the crisis – what caused it and more importantly how to prevent it from happening again.

The emails today detail the efforts of the Fed to suppress the disclosure of payments made to banks such as Goldman, Sachs Group for reimbursement of their credit-default swap exposure. When the Treasury Department stepped in, AIG had at least $440 billion in credit-default swaps outstanding. The Fed, led by Tim Geithner, paid Goldman, Sachs Group and other banks 100 cents on the dollar for these instruments rather than negotiating a lower rate closer to the actual value, (estimated by some to have been as little as 20 cents). In testimony to the Congressional Oversight Panel, Tim Geithner insisted it was necessary to make these payments in full, arguing that even a small downward negotiation would prove catastrophic to the financial sector. Elizabeth Warren, head of the oversight panel has repeatedly challenged repeatedly (sic) this assertion.

via Tip of the Iceberg » New Deal 2.0.

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Elizabeth Warren from ‘Capitalism: A Love Story’ on MSNBC’s Morning Joe: “The way I think of it is: they say something like ‘Give me your money, investors and I’m going to Las Vegas and put it all on red 22. And if red 22 comes in — woo! we are RICH. If red 22 doesn’t come in, don’t worry because the tax payers will pay you back the money you invested.”