Mark your calendars for 10 a.m. on Wednesday, Jan. 27. That’s when the fireworks will start at the obscure House Oversight and Government Reform Committee.

The Committee will hold a hearing tomorrow entitled “Factors Affecting Efforts To Limit Payments To AIG Counterparties,” but it could just as easily have been labeled, “Tim Geithner’s Second Job Interview.” That’s because the hearing amounts to a public explication of the AIG counterparty payouts at par in November 2008 — and no one appears to have had a greater role in that than the Treasury secretary, who was at the time president of the Federal Reserve Bank of New York.

(Click here for a link to the live feed of the hearing.)

I’ve had a chance to read some of the expected opening statements from tomorrow’s witnesses, and the defense of the the AIG counterparty payouts are varied and, well, lame.

* Henry Paulson: “We could not have anticipated the magnitude of AIG’s problems; and we had no way of letting it fail without disastrous collateral consequences. We had to intervene, and I am thankful that we did.” [My response: No one said the government shouldn’t have intervened; you just should have done so at a better price for the American taxpayer, Hank.]

* Elias Habayeb, the former CFO of AIG’s financial services division: “Unfortunately, we had little negotiating leverage with [AIG’s] counterparties to extract discounts.” [My response: Totally unprovable — and probably false.]

* New York Fed General Counsel Thomas Baxter: “In our judgment, taking additional time to press further for a discount was not justified in light of the overwhelming risk and catastrophic consequences of failing to complete the transaction by November 10.” [My response: Who was holding the cards here? Goldman or of the United States of America? Wait, don’t answer that, Tom.]

In addition to Geithner, Stephen Friedman, the New York Fed’s former chairman, is also expected to testify.

What all these excuses boil down to is that federal government could not extract discounts from the counterparties. (See here for a list of which firms got paid and how much.) Apparently, there was an attempt to do so, but reportedly the effort was half-hearted at best. From the FT:

The sad truth of tomorrow’s hearings won’t be that a cover-up was perpetrated, however. No, the government just doesn’t have very good traders, it turns out. In any trade, price is based on a confluence of factors, most notably the perceived maximum price the market will bear. Perception is the key here, and the government’s understanding of the degree of pricing flexibility available to them was limited, to say the least. It still is, as evidenced by Baxter’s statement above. How is he absolutely certain that there were “overwhelming risk and catastrophic consequences of failing to complete the transaction by November 10”? He perceived as such — and he still perceives that to be the case.

All this points to a bad trade by the federal government. Malicious? No. Negligent? Perhaps to some degree. Unfortunate? Clearly. Is that enough to can Geithner? Probably not. But it is enough to stain his resume. Or at least that’s how I perceive it in advance of tomorrow’s salacious hearing.