Did then-New York Fed President Timothy Geithner give away the farm when negotiating with AIG’s creditors? A new report by special inspector general Neil Barofsky says yes. The Fed's bailout strategy with AIG, says Barofsky, "came with a cost," and "led directly to a negotiating strategy with the counterparties that even then-New York Fed President Geithner acknowledged had little likelihood of success." After AIG failed, top officials at the Fed spoke with representatives at some of AIG's biggest trading partners, including Goldman Sachs, Merrill Lynch, UBS and Bank of America, asking if they would be willing to accept concessions on loans—only UBS agreed to a "haircut," to the tune of 2 percent, and only if other counterparties would also agree. The Fed ended up buying tens of billions of dollars of securities.