AIG Bonuses [Archive] - SpursTalk.com Forums

boutons_

03-15-2009, 07:37 PM

http://www.alternet.org/images/site/logo.gif
AIG Bonuses Scandal: CEOs Take Our Billions and Are Accountable to No One

By Robert B. Reich, Robert Reich's Blog
Posted on March 15, 2009, Printed on March 15, 2009
http://www.alternet.org/story/131721/

The real scandal of AIG isn't just that American taxpayers have so far committed $170 billion to the giant insurer because it is thought to be too big to fail -- the most money ever funneled to a single company by a government since the dawn of capitalism -- nor even that AIG's notoriously failing executives, at the very unit responsible for the catastrophic credit-default swaps at the very center of the debacle, are planning to give themselves over $100 million in bonuses. The scandal is that even at this late date, even in a new administration dedicated to doing it all differently, Americans still have so little say over what is happening with our money.

The administration is said to have been outraged when it heard of the bonus plan last week. Apparently Secretary of the Treasury Tim Geithner told AIG's chairman, Edward Liddy (who was installed at the insistence of the Treasury, in the first place) that the bonuses should not be paid. But it turns out that most will be paid anyway, because, according to AIG, the firm is legally obligated to pay them. The bonuses are part of employee contracts negotiated before the bailouts. And, in any event, Liddy explained, AIG needs to be able to retain talent. :lol

AIG's arguments are absurd on their face. Had AIG gone into chapter 11 bankruptcy or been liquidated, as it would have without government aid, no bonuses would ever be paid (they would have had a lower priority under bankruptcy law that AIG's debts to other creditors); indeed, AIG's executives would have long ago been on the street. And any mention of the word "talent" in the same sentence as "AIG" or "credit default swaps" would be laughable if laughing weren't already so expensive.

This sordid story of government helplessness in the face of massive taxpayer commitments illustrates better than anything to date why the government should take over any institution that's "too big to fail" and which has cost taxpayers dearly. Such institutions are no longer within the capitalist system because they are no longer accountable to the market. To whom should they be accountable? As long as taxpayers effectively own a large portion of them, they should be accountable to the government.

But if our very own Secretary of the Treasury doesn't even learn of the bonuses until months after AIG has decided to pay them, and cannot make stick his decision that they should not be paid, AIG is not even accountable to the government. That means AIG's executives -- using $170 billion of our money, so far -- are accountable to no one.

Robert Reich is professor of public policy at the Richard and Rhoda Goldman School of Public Policy at the University of California, Berkeley. He was secretary of labor in the Clinton administration.
© 2009 Robert Reich's Blog All rights reserved.

View this story online at: http://www.alternet.org/story/131721/

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American "free market capitalism" is corrupt at the top, which controls the rest of the market, so it all corrupt, aided and abetted by the captured assholes in governemt.

boutons_

03-15-2009, 07:47 PM

http://graphics8.nytimes.com/images/blogs_v3/dealbook/dealbook_print.png (http://dealbook.blogs.nytimes.com/)

March 15, 2009, 5:16 pm

A.I.G. Reveals Its Biggest Counterparties

Update | 6:23 p.m. The American International Group on Sunday released the names of financial institutions that benefited last fall when the Federal Reserve saved it from collapse with an $85 billion rescue loan and then 3 subsequent bailouts.

The disclosure included counterparties to both its credit default swap operations and its securities lending businesses, both of which contributed heavily to A.I.G.’s troubles, as well as to muncipalities who participated in certain investment programs. All told, Sunday’s statement detailed payments of more than $94 billion, excluding payments to municipalities. All were made using government loans. (Read the disclosure by A.I.G. after the jump.)

Many critics of the company have demanded the names of A.I.G.’s counterparties as the insurer received government money totaling $170 billion. A.I.G. said in a statement that it made the disclosure in consultation with the Federal Reserve.

“Our decision to disclose these transactions was made following conversations with the counterparties and the recognition of the extraordinary nature of these transactions,” Edward M. Liddy, A.I.G.’s government-appointed chief executive, said in a statement.

Time and again, the rationale given for bailout out A.I.G. was that its credit default swap agreements — essentially insurance contracts on mortgage-backed securities — were so interwoven into the global financial web that to let the insurer fail would create chaos.

As the mortgages underlying the credit default swap agreements decayed, A.I.G. was required to post collateral to its counterparties. By September, the firm warned that it would run out of money, prompting the government to swoop in with its initial $85 billion loan. That money was used to post collateral to counterparties, including France’s Société Générale, Germany’s Deutsche Bank and Goldman Sachs.

All told, the posting of collateral for the swap agreements cost $22.4 billion, A.I.G. said. The money was paid to the counterparties between Sept. 16 and Dec. 31.

A subsequent government bailout provided money for the Federal Reserve to buy the securities underpinning these credit default swap agreements, canceling the contracts. Nearly $30 billion was spent to do so.

Foreign banks, including Deutsche Bank, France’s Societe Generale and Calyon and Britain’s Barclays, figured prominently among the firm’s credit default swap counterparties.

Deutsche Bank, Goldman Sachs and others also were owed money under securities lending agreements with the insurer. In this business, A.I.G. lent out shares in companies, primarily to hedge funds that sold short. While the business is normally considered safe, A.I.G. had reinvested proceeds from the business into mortgage-backed securities to earn a higher return. Those investments have since sunken in value.

Nearly $44 billion was paid out to 20 firms, most of which were banks.

(One non-bank that appeared on the list was the Citadel Investment Group, the giant hedge fund based in Chicago. It received about $200 million.)

A.I.G. also disclosed $12.1 billion in payments to municipalities, including about $1 billion each to California and and Virginia, under guaranteed investment agreements. These were essentially places for municipalities to hold money raised from the likes of bond issuances until the cash was needed.

The insurer has already taken fire this weekend for its plans to pay out more than $165 million in bonuses (http://dealbook.blogs.nytimes.com/2009/03/15/aig-to-pay-big-bonuses-setting-off-storm-of-criticism/) to employees in the unit that brought A.I.G. down to its knees. Despite the consternation of the Obama administration and Republicans alike, the company was allowed to make the payments because of contractual obligations.

At a Senate Banking Committee hearing earlier this month, legislators demanded to know (http://dealbook.blogs.nytimes.com/2009/03/06/senators-ask-who-got-money-from-aig/) who was on the opposite side of the table from A.I.G. on these contracts.

”We need to know who benefited, and we’re going to find out,” said Senator Richard C. Shelby, Republican of Alabama and the ranking member of the committee. ”The Fed can be secretive for a while but not forever.”

–Michael J. de la Merced

http://wt.o.nytimes.com/dcsym57yw10000s1s8g0boozt_9t1x/njs.gif?dcsuri=/nojavascript&WT.js=No&WT.tv=1.0.7=================

That's how the AIG "TALENT" performs.

ducks

03-15-2009, 08:17 PM

new yorks times
=liberal

spurster

03-15-2009, 09:18 PM

Prosecute them! The DOJ needs to make examples of a few of these jokers.

Trainwreck2100

03-16-2009, 01:12 AM

They got free money for doing nothing but losing money, if you did that wouldn't you expect a bonus?

spurster

03-16-2009, 12:12 PM

Even if AIG is somehow obligated, I would think the government could tie things up for a while. Also, I'd be interested in what happens to any exec who sues for his bonus.

http://www.nytimes.com/2009/03/17/us/politics/17obama.html

Obama Orders Treasury Chief to Try to Block A.I.G. Bonuses

By HELENE COOPER
Published: March 16, 2009

WASHINGTON — President Obama vowed to try to stop the faltering insurance giant American International Group from paying out hundreds of millions of dollars in bonuses to executives, as the administration scrambled to avert a populist backlash against banks and Wall Street that could complicate Mr. Obama's economic recovery agenda.

"In the last six months, A.I.G. has received substantial sums from the U.S. Treasury," Mr. Obama said. He added that he had asked Treasury Secretary Timothy F. Geithner "to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole."

...

Marcus Bryant

03-16-2009, 12:17 PM

I guess the govt could sue as a shareholder, but on what basis? Some kind of securities fraud claim would have to be developed.

Bartleby

03-16-2009, 12:31 PM

new yorks times
=liberal

And your point is . . . ?

RandomGuy

03-16-2009, 01:13 PM

Obama came out today and instructed that all legal means necessary would be used to prevent the bonuses from being given out.

RandomGuy

03-16-2009, 01:16 PM

new yorks times
=liberal

http://www.spurstalk.com/forums/picture.php?albumid=57&pictureid=328

or if you prefer:

Translation:

"Yeah man, I tell ya what, man. That dang ol' Internet, man. You just go on there and point and click. Talk about W-W-dot-W-com. An' lotsa nekkid chicks on there, man. Click. Click. Click. Click. Click. It's real easy, man."

Thanks ducks.

ratm1221

03-16-2009, 02:33 PM

Regulation is not the answer. Let them do what they want, they will get it right eventually. Regulation is bad.

That bonus money will trickle down to us making less that 7 figures eventually.

MannyIsGod

03-16-2009, 03:04 PM

Yeah - the bonuses are bullshit, but doesn't anyone else just roll their eyes at the outrage of those in DC - including Obama - at this amount of money when they didn't do shit about the billions in ear marks in the Omnibus bill?

Now, I am a believer that a lot of those earmarks are justified and none of these bonuses are, but the amounts are incredibly different as well.

I don't know, this form of populism in the context of everything thats happend just annoys me. I'm pretty outraged at AIG, but I'm pretty fucking annoyed with the government as well.

DarrinS

03-16-2009, 03:07 PM

If it's in their contracts, what are you supposed to do?

MannyIsGod

03-16-2009, 03:12 PM

Renegotiate their contracts? Of course that means the people who receive the money have to agree to do so, which they most likely won't. I just hope this is a catalyst for a dramatic change in the way these CEO's and upper management are compensated. The gap in pay is phenomenal and outrageous. Stock Prices are the end all be all for these companies and they're obviously not an accurate indicator of the companies productivity or worth.

Trainwreck2100

03-16-2009, 03:21 PM

It's in their contract, do they deserve it? fuck no. Are they entitled to it? sadly yes

PixelPusher

03-16-2009, 03:39 PM

Something to bear in mind - when a lot of these Bank CEO's talk about the need to give out bonuses in order to "retain talent", that's a euphemism for "don't let that guy with his big portfolio of clients (investors) walk out of here, and wander over to one of our competitors".

This is one of those rare instances where the euphemism is more damaging to their PR than the plain-spoken truth would have been.

Winehole23

03-16-2009, 04:04 PM

Looks like the USG will use the upcoming $30 billion infusion for AIG as leverage (http://online.wsj.com/article/SB123721970101743003.html#mod=testMod) to get AIG to "pay back" the bonuses.

TDMVPDPOY

03-16-2009, 04:10 PM

these stimulus packages......a % of it will be funneled into dodgy accounts....

:D

jack sommerset

03-16-2009, 04:22 PM

Seriously if you are not outraged by this I don't know what could get a rise out of you. 165 million dollars in bonuses after the goverment just gave you billions to help you keep ur jobs. Are you kidding me? What the fuck do people think? I know they should be using every penny they got from the USA to make sure they are not in this position again. Bonuses! Absolutly no excuse for this.

coyotes_geek

03-16-2009, 04:32 PM

Blake

03-16-2009, 04:51 PM

while festering up some quality outrage let's be sure to save some for our government who has blindly given away billions and billions of dollars to aig with no strings attached whatsoever and who only became "outraged" upon finding out that we the people were legitmately outraged.

+1

TDMVPDPOY

03-16-2009, 05:29 PM

seriously those books should be audited....

i wonder where most of that money is channeled too....

z0sa

03-16-2009, 05:46 PM

z0sa

03-16-2009, 05:52 PM

Yep, its true, and that 60mil or whatever is a drop in the bucket compared to what they really fucked up.

http://thesource.typepad.com/thesource/2009/03/surprise-surprise-bailout-money-for-aig-goes-overseas.html

The Politico reported late last night that billions of dollars used to bailout AIG has gone to secure the footing of banks overseas. This is a huge set-back to the Obama Administration and the Democrat party, as the sole purpose of these bailouts was to help American banks who will in-turn start making sound loans that will help revitalize the economy. Now, we are learning billions were pumped into the largest foreign banks across the globe instead of providing help to banks here in the United States.

From the Politico:

AIG ships billions in bailout abroad
By: Eamon Javers
March 15, 2009 07:40 PM EST

Billions of American taxpayer dollars used to bailout insurance giant AIG are flowing to some of the largest foreign banks in the world, according to new documents released by beleaguered company Sunday.

The revelation seemed sure to cause political complications for President Barack Obama and his economic team, already on the defensive Sunday over why they couldn’t stop AIG from doling out $165 million in bonuses to some of its top corporate officials – even as the company was receiving a massive infusion of taxpayer funds.

The documents AIG released account for some of the more than $180 billion in aid that AIG has received, and they detailed for the first time which financial firms are benefitting from the federal handout.
In all, AIG disclosed payments of $105.3 billion between September and December 2008. And some of the biggest recipients were European banks. Societe Generale, based in France, was the top foreign recipient at $11.9 billion, Deutsche Bank of Germany got $11.8 billion and Barclays, based in England, was paid $8.5 billion.

Here in the U.S. , Goldman Sachs received $12.9 billion. Edward Liddy, the government-installed CEO of AIG, sat on the board of directors of Goldman Sachs until he joined AIG.

He took the position while President Bush's Treasury Secretary, Henry Paulson—who until joining the administration had served as Goldman's Chairman and CEO—arranged the insurance company's initial government bailout.

The disclosure of US taxpayer money going to foreign banks rankled some analysts. “These revelations raise serious questions about the extent to which U.S. taxpayers are being asked to bail out foreign banks,” said James Rickards, the Senior Managing Director for Market Intelligence at Omnis, an applied research organization. “Why were French and German authorities not asked to pick up the tab for their portion of potential AIG losses?”

Political pressure is also building on AIG, as House Speaker Nancy Pelosi on Sunday called on AIG executives to “renounce” their bonuses and refuse retention pay, and said that House Financial Services Chairman Barney Frank would “examine options that are legally available to recover taxpayer funds of companies that abuse the privilege of taxpayer assistance.”

The House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises has called on Liddy to testify before the committee on Wednesday.

That’s information that members of Congress and media outlets have been trying to get either AIG or the federal government to divulge since last year. The U.S. government now holds a majority stake in the bank,

AIG has resisted disclosure of the so-called “counterparties” who were at the other end of the firm’s complicated financial transactions. The company argued that such information was proprietary and private. And the Bush and Obama administrations also declined to divulge the information. But some in Congress pushed hard for it, insisting that taxpayers had a right to know which companies were benefiting from bailout money.

“Our decision to disclose these transactions was made following conversations with the counterparties and the recognition of the extraordinary nature of these transactions,” said Liddy.

Additional reporting by Lisa Lerer.

z0sa

03-16-2009, 05:54 PM

The american government isn't even bailing out America anymore :lmao

ChumpDumper

03-16-2009, 05:54 PM

Well, if that's who bought the CDSs, that's where the money goes. I'm more pissed off about the bonuses that that.

TDMVPDPOY

03-16-2009, 06:00 PM

someone mentioned to me today at work that 90+ billion of the dollars the government gave AIG went to overseas banks ... they quoted their source as Rush Limbaugh, so take it or leave it, but that made me much more angry than the bonus bullshit. I've glanced over a few sites who just put that news out today and they don't mention any amounts, but the story is most definitely true.

But isnt most of AIG international divisions are doing better than compared to the parent company....

doesnt really make sense when you have to consolidate accounts anyway

z0sa

03-16-2009, 06:01 PM

Well, if that's who bought the CDSs, that's where the money goes. I'm more pissed off about the bonuses that that.

you don't mind at least 30 billion of the people's dollars went to overseas banks? This isn't about who bought what, this is huge amoutns of mine and your dollars being used to help banks in Europe.

LOL, I can't believe you really think 163 million tax payer dollars in bonuses to Americans matters compared to 30 billion tax payer dollars to Europeans. We shouldnt have given AIG any bailout money, or much less, not just overlook the much more vast number of dollars that would be leaving the country. :td

TDMVPDPOY

03-16-2009, 06:07 PM

werent AIG holding 1.4-1.6trillion debt?

umm i think the govt shouldve just let it fold and use the bailout money on something else....

ChumpDumper

03-16-2009, 06:08 PM

If you didn't think AIG owed money to overseas interests, you aren't thinking properly.

MannyIsGod

03-16-2009, 06:11 PM

you don't mind at least 30 billion of the people's dollars went to overseas banks? This isn't about who bought what, this is huge amoutns of mine and your dollars being used to help banks in Europe.

LOL, I can't believe you really think 163 million tax payer dollars in bonuses to Americans matters compared to 30 billion tax payer dollars to Europeans. We shouldnt have given AIG any bailout money, or much less, not just overlook the much more vast number of dollars that would be leaving the country. :td

We should just build a big ass great wall of America around our country too and stop dealing with anyone who's not in the 50 states. We don't need the rest of the world!

Oh wait.

z0sa

03-16-2009, 06:11 PM

you aren't thinking properly.

I'm more pissed off about the bonuses that that

Yeah, I got a good grasp on who's thinking properly and who's not.

The American government should have let AIG collapse, not given them billions upon billions to pay off overseas debts.

You're not a fool, are you?

z0sa

03-16-2009, 06:14 PM

We should just build a big ass great wall of America around our country too and stop dealing with anyone who's not in the 50 states. We don't need the rest of the world!

Oh wait.

so you agree with sending tens of billions of mine, yours, and every american's dollars to europe?

i don't care what the US Government does generally, but indirectly giving at least (from the article) 30 billion dollars europe is morally, ethically, totally wrong. Last I checked, Germany's banks problems are Germany's problems, not America's or even AIG's, no matter how much money they owe them.

ChumpDumper

03-16-2009, 06:14 PM

Yeah, I got a good grasp on who's thinking properly and who's not.

The American government should have let AIG collapse, not given them billions upon billions to pay off overseas debts.

You're not a fool, are you?The bailout was a fait accompli. Nobody wanted to think about what would happen if AIG could not cover its obligations. Some like you are apparently unable to even think what may have happened. when guys like Bush and Paulson pull a complete 180 on government intervention like that, you have to know shit it serious.

ChumpDumper

03-16-2009, 06:17 PM

We should just build a big ass great wall of America around our country too and stop dealing with anyone who's not in the 50 states. We don't need the rest of the world!

Oh wait.Protectionism was what pulled us out of the Great Depression, wasn't it?

Yonivore

03-16-2009, 06:17 PM

TDMVPDPOY

03-16-2009, 06:18 PM

If you didn't think AIG owed money to overseas interests, you aren't thinking properly.

its a business, should just let it default.....

the american govt is just pouring in money where there is no possible future that AIG can pay back its loans and shit....the bailout money is doing atm is just covering their asses for interest payments.....this is just getting worster by the day which has no cause :(

so what happen to american govts interest into this company or any other company it has bought shares into? how come they are not forcing meetings and change of pay scales/bonuses policys....im sure you dont have to wait for the AGM to start firing directors and shit, the govt holds enough % to force a emergency meeting if im not correct according to company law. The govt is just sitting still letting them company's continue the mess.

ChumpDumper

03-16-2009, 06:18 PM

Let's hear it for bankruptcy, then, shall we?

It strikes me that this episode illustrates the inherent evils of a bailout...nevermind the irony of Congressional Democrats being "outraged" about 1/10 of 1% of the money they gave AIG when it was them that fostered this mess to begin with, bloviating blowhard Barney Frank being chief idiot.

There really are no rules; the government pumped many billions into AIG, but the company and its new "owners," the taxpayers, are making it up as they go along. AIG is likely right in saying it is contractually obligated to pay the bonuses, but the public is also right in believing a bailout shouldn't work this way. The problem is that we have no established rules to govern bailouts.

Which is one basic reason why bankruptcy is far preferable. Bankruptcy has reasonably clear rules that have been developed over many years. The bankrupt company is run for the benefit of its creditors, or, if appropriate, shut down. The creditors decide whether to keep existing management on. Executory contracts can be accepted or rejected; labor and supply agreements can be renegotiated. A judge presides so that disputes can be fairly resolved.

A bailout is an ill-defined procedure in which no one's rights are clear, and political calculation counts for more than fairness or transparency. The flap over AIG bonuses is just one of many that we can expect to arise if we continue down the path of endless bailouts, rather than allowing insolvent companies and their creditors and investors to pay the price of that insolvency.

I say the government demand AIG return either all or, at the least, 1/10 of 1% of the bailout funds. Then, it could be said the 165 million wasn't bailout funds and everyone can just shut the fuck up already.

Let's Hear It For Bankruptcy!

March 16, 2009 Posted by John at 5:12 PM

The big news of the day is the AIG bonuses. Barack Obama, obviously worried about getting on the wrong side of the bailout backlash, berated AIG and directed Tim Geithner to do what he can to block their payment. Republicans weighed in too; John Boehner called the bonuses "outrageous" and demanded an "exit strategy" from AIG. The company, meanwhile, says it is contractually obligated to pay the bonuses and has no choice.

It strikes me that this episode illustrates the inherent evils of a bailout. There really are no rules; the government pumped many billions into AIG, but the company and its new "owners," the taxpayers, are making it up as they go along. AIG is likely right in saying it is obligated to pay the bonuses, but the public is also right in believing a bailout shouldn't work this way. The problem is that we have no established rules to govern bailouts.

Which is one basic reason why bankruptcy is far preferable. Bankruptcy has reasonably clear rules that have been developed over many years. The bankrupt company is run for the benefit of its creditors, or, if appropriate, shut down. The creditors decide whether to keep existing management on. Executory contracts can be accepted or rejected; labor and supply agreements can be renegotiated. A judge presides so that disputes can be fairly resolved.

A bailout is an ill-defined procedure in which no one's rights are clear, and political calculation counts for more than fairness or transparency. The flap over AIG bonuses is just one of many that we can expect to arise if we continue down the path of endless bailouts, rather than allowing insolvent companies and their creditors and investors to pay the price of that insolvency.

http://www.powerlineblog.com/archives/2009/03/023078.php

z0sa

03-16-2009, 06:21 PM

bullshit

dude, you already made it clear you care more about principle than the actual money involved.

excuse the poor fucks like me who pay roughly every extra dime I have to goddamn europeans.

YOU MAKE ME FUCKING SICK.

ChumpDumper

03-16-2009, 06:21 PM

its a business, should just let it default.....Then what?

ChumpDumper

03-16-2009, 06:22 PM

bullshit.Dude, nice to know you can't get your head around the issue and resort to one word arguments. I can declare victory.

z0sa

03-16-2009, 06:23 PM

Then what?

since when is that mine and your problem?

ChumpDumper

03-16-2009, 06:23 PM

dude, you already made it clear you care more about principle than the actual money involved.

excuse the poor fucks like me who pay roughly every extra dime I have to goddamn europeans.

YOU MAKE ME FUCKING SICK.You're poor?

z0sa

03-16-2009, 06:24 PM

Dude, nice to know you can't get your head around the issue and resort to one word arguments. I can declare victory.

argument? are you retarded? THE GOVERNMENT GAVE OUR MONEY THAT COULD FEED THE FUCKING STARVING FOR HUNDREDS OF YEARS TO EUROPE.

jesus what does it take to get that the money could have been used BETTER.
let me be fair: couldn't they have used this money for anything other than bailing out european banks?

surely you can understand.

z0sa

03-16-2009, 06:25 PM

You're poor?

in terms of money yes, in terms of spirit, I try not to be but this shit makes me sick to my stomach.

TDMVPDPOY

03-16-2009, 06:25 PM

Then what?

im sure there is smaller players out there who could expand with some govt package, swallow up AIGs employees and market share....no need to buy AIG debt.

z0sa

03-16-2009, 06:37 PM

Protectionism was what pulled us out of the Great Depression, wasn't it?

So me giving my money to banks in europe helps the other struggling Americans how?

TDMVPDPOY

03-16-2009, 06:39 PM

So giving money to banks in europe helps the struggling American how?

use that money buy more american bonds?

ChumpDumper

03-16-2009, 06:41 PM

So giving money to banks in europe helps the struggling American how?By not having the world economy melt down.

I agree that the governments of those countries should be pitching in -- some are, some aren't -- but we're all in this together.

ChumpDumper

03-16-2009, 06:41 PM

im sure there is smaller players out there who could expand with some govt package, swallow up AIGs employees and market share....no need to buy AIG debt.But what about that debt?

z0sa

03-16-2009, 06:46 PM

But what about that debt?

When/if you have kids, do you expect them to pay you back for all the food, bills, etc they consumed as soon as they move out despite the fact they have no viable means of doing so, at least for some time -- and even if you yourself has fallen on hard times?

z0sa

03-16-2009, 06:49 PM

By not having the world economy melt down.

I agree that the governments of those countries should be pitching in -- some are, some aren't -- but we're all in this together.

I understand, within a certain margin.

We are talking tens of billions of American dollars here, and dollars that were meant for Americans.

And, I apologize for saying you are retarded. I just don't see how your opinion can differ so greatly.

TDMVPDPOY

03-16-2009, 06:49 PM

But what about that debt?

the debt has nothing to do with the new player in the market whose over expanding and eating up market share, the consumers will vote with their feet and move to the new player...

as for AIGs mountain of debt? fuck them....just look at fanny may and shit who has gone bankrupt, you dont see anyone buying their debt, so why should the new player/tax payer buy AIG debt? just go bankrupt damn it.

MannyIsGod

03-16-2009, 06:56 PM

http://freakonomics.blogs.nytimes.com/2008/09/18/diamond-and-kashyap-on-the-recent-financial-upheavals/

A.I.G. had to raise money because it had written $57 billion of insurance contracts whose payouts depended on the losses incurred on subprime real-estate related investments (http://money.cnn.com/2008/09/16/news/derivatives_benner.fortune/?postversion=2008091621). While its core insurance businesses and other subsidiaries (such as its large aircraft-leasing operation) were doing fine, these contracts, called credit default swaps (http://en.wikipedia.org/wiki/Credit_default_swap) (C.D.S.’s), were hemorrhaging.
Furthermore, the possibility of further losses loomed if the housing market continued to deteriorate. The credit-rating agencies looking at the potential losses downgraded A.I.G.’s debt on Monday. With its lower credit ratings, A.I.G.’s insurance contracts required A.I.G. to demonstrate that it had collateral to service the contracts; estimates suggested that it needed roughly $15 billion in immediate collateral.
A second problem A.I.G. faced is that if it failed to post the collateral, it would be considered to have defaulted on the C.D.S.’s. Were A.I.G. to default on C.D.S.’s, some other A.I.G. contracts (tied to losses on other financial securities) contain clauses saying that its other contractual partners could insist on prepayment of their claims. These cross-default clauses are present so that resources from one part of the business do not get diverted to plug a hole in another part. A.I.G. had another $380 billion of these other insurance contracts outstanding. No private investors were willing to step into this situation and loan A.I.G. the money it needed to post the collateral.
In the scramble to make good on the C.D.S.’s, A.I.G.’s ability to service its own debt would come into question. A.I.G. had $160 billion in bonds that were held all over the world: nowhere near as widely as the Fannie and Freddie bonds, but still dispersed widely.
In addition, other large financial firms — including Pacific Investment Management Company (Pimco), the largest bond-investment fund in the world — had guaranteed A.I.G.’s bonds by writing C.D.S. contracts.
Given the huge size of the contracts and the number of parties intertwined, the Federal Reserve decided that a default by A.I.G. would wreak havoc on the financial system and cause contagious failures (http://faculty.chicagogsb.edu/douglas.diamond/research/liqshort.pdf). There was an immediate need to get A.I.G. the collateral to honor its contracts, so the Fed loaned A.I.G. $85 billion.

I read this back in September and it remains the best explanation as to why we had to bail out AIG. Ignoring what is contained in this link simply points out to me those who either can't comprehend the collapse of the world financial system and the havoc that would cause and those who simply try to make political gain by saying we shouldn't have bailed them out.

I don't care which category of those people fall into, but when they fall into one of those categories I simply find it easier to tune them out because they've got nothing constructive to say.

smeagol

03-16-2009, 07:01 PM

z0sa

03-16-2009, 07:09 PM

I wonder what a world with Citi, BoA, AIG, GM and many other bellweather institutions going bankrupt would look like?

I'm sure many posters on this thread know exactly what that world would like, and they seem to like what they see . . . :depressed

If we got to go back to the dark ages just to get our heads out of our asses, so be it. I could give a fuck being a texas guy barely making it as it is.

SequSpur

03-16-2009, 07:10 PM

Ok, cool, I see I am not the only one... I think they should go through reorganization... Fuck..why not?

boutons_

03-16-2009, 07:11 PM

boutons_

03-16-2009, 07:14 PM

The Repugs, Whott, WC and other righties have NO alternative solution.

The Repugs voting against the bailout and then doing and saying everything to make the bailout fail is typical rotten will we know so well.

z0sa

03-16-2009, 07:14 PM

I read this back in September and it remains the best explanation as to why we had to bail out AIG. Ignoring what is contained in this link simply points out to me those who either can't comprehend the collapse of the world financial system and the havoc that would cause and those who simply try to make political gain by saying we shouldn't have bailed them out.

I don't care which category of those people fall into, but when they fall into one of those categories I simply find it easier to tune them out because they've got nothing constructive to say.

The problem is that Americans didn't get a choice in the matter. We're being forced to use our dollars to bail banks out who just shouldn't have loaned the money out. Like my earlier analogy demonstrated.

Honestly, I think letting AIG collapse then using the tax money directly to help, equally, those struggling foreign entities would have been a slightly better option...

or we could have started paying off the national debt my kids are going to be liable for.

smeagol

03-16-2009, 07:18 PM

The problem is that Americans didn't get a choice in the matter. We're being forced to use our dollars to bail banks out who just shouldn't have loaned the money out. Like my earlier analogy demonstrated.

Here we go again . . . :rolleyes

Americans had nothing to do with the mess America is in.

If you repeat it loud enough, it might just turn out to be true . . .

smeagol

03-16-2009, 07:19 PM

If we got to go back to the dark ages just to get our heads out of our asses, so be it. I could give a fuck being a texas guy barely making it as it is.

Emphasis on "Texas guy"!

z0sa

03-16-2009, 07:19 PM

Here we go again . . . :rolleyes

Americans had nothing to do with the mess America is in.

If you repeat it loud enough, it might just turn out to be true . . .

explain exactly where I said or implied this.

smeagol

03-16-2009, 07:33 PM

explain exactly where I said or implied this.

The problem is that Americans didn't get a choice in the matter. We're being forced to use our dollars to bail banks out who just shouldn't have loaned the money out.

z0sa

03-16-2009, 07:40 PM

you do understand I'm talking about the european banks, don't you?

InK

03-16-2009, 08:09 PM

you do understand I'm talking about the european banks, don't you?

Do you have any idea why the european banks are in this mess?

MannyIsGod

03-16-2009, 08:24 PM

The problem is that Americans didn't get a choice in the matter. We're being forced to use our dollars to bail banks out who just shouldn't have loaned the money out. Like my earlier analogy demonstrated.

Honestly, I think letting AIG collapse then using the tax money directly to help, equally, those struggling foreign entities would have been a slightly better option...

or we could have started paying off the national debt my kids are going to be liable for.

Is possibly the dumbest idea I've ever fucking heard. You are essentialy asking for the US government to pay off all of the debt without any hopes of a return on the money they've spent.

So Fucking Retarded.

MannyIsGod

03-16-2009, 08:25 PM

If we got to go back to the dark ages just to get our heads out of our asses, so be it. I could give a fuck being a texas guy barely making it as it is.

Misery loves company? Well its obvious you lack persepctive and don't care what happens since your life sucks. Not everyone else is in the same boat.

MannyIsGod

03-16-2009, 08:27 PM

an alternative would have been to let AIG die, and all their blow-dried, fat-ass fat cats with it, and then payoff AIG's obligations directly to the counter-parties, keeping our tax dollars out of AIG's filthy, corrupt hands.

Yeah and never seeing any of the money back. Even if the US only gets 10 cents on the dollar backthen its far better then this idiocy.

Aggie Hoopsfan

03-16-2009, 08:38 PM

Got to love the Democraptic leadership.

Pelosi, Reid, Obama, and co. shoved TARP down our friggin' throats in the fall under the guise that we had to do something then and there or else!

Many on the right said passing TARP without conditions was stupid, but the Dems were having nothing of it.

They got the POS legislation passed, and now here we are 5 months later and all of a sudden Obama's 'outraged' at how companies like AIG spent the bailout funds.

Classic democrats....

MannyIsGod

03-16-2009, 08:54 PM

LaMarcus Bryant

03-16-2009, 08:58 PM

LOL OMG AHF are you shitting me? Obama and Pelosi were the ones pushing TARP? Are you fucking shitting me?

What planet do you live on, jesus christ, wipe the hannity jizz from your mouth, shave, put on some nice clothes, and wake up to reality already. McCain lost, get fucking over it, you have been at an all time high douchebaggery level ever since the election and your bitterness over the democrat's victory still oozes out of every post you make...plus you've resorted to outright lies in your posts now. That's not the AHF that used to post here.
Pathetic.

z0sa

03-16-2009, 09:22 PM

Misery loves company? Well its obvious you lack persepctive and don't care what happens since your life sucks. Not everyone else is in the same boat.

I guess the tax man doesn't take half your pay check and give it Europeans.

You're the moron here, acting like tens of billions of our dollars saving the world economy is something we should not be pissed about. I guess you've just been pussified to such a level that you'd rather accept getting fucked in the ass while giving two thumbs up than take a stand and say, "This is wrong, no matter the circumstance."

MannyIsGod

03-16-2009, 09:27 PM

I guess the tax man doesn't take half your pay check and give it Europeans.

He's not doing that to you either. I guess when your argument has no legs this is the type of argument you fall back on.

z0sa

03-16-2009, 09:31 PM

He's not doing that to you either. I guess when your argument has no legs this is the type of argument you fall back on.

I think its more than safe to say $30 billion is mine, yours, and a few others contributions as well.

I give up. I don't see how anyone could be pissed about bonuses to Americans when this shit is going on, oh well. Which, if you remember, was my original point.

RandomGuy

03-16-2009, 09:31 PM

While festering up some quality outrage let's be sure to save some for our government who has blindly given away billions and billions of dollars to AIG with no strings attached whatsoever and who only became "outraged" upon finding out that We The People were legitmately outraged.

We haven't "blindly given away billions and billions of dollars to AIG with no strings attached".

We went in with full knowledge and awareness of what would happen should AIG fail, and have pretty much full ownership of the place.

We should be pissed about having to pump up these assholes, and we are, but the bonuses were the last straw. Quite frankly, I think a lot of those executives are lucky that lynch mobs are mostly a thing of the past.

RandomGuy

03-16-2009, 09:34 PM

Well, if that's who bought the CDSs, that's where the money goes. I'm more pissed off about the bonuses that that.

Yup. Anybody who thinks this is somehow specifically a bailout of foreign companies or is really outraged at that simply has no concept of how interlinked the world's economy.

If you are outraged that the world's economy is interlinked, then quit buying all of that Chinese shit, and build your own fucking factories.

RandomGuy

03-16-2009, 09:36 PM

you don't mind at least 30 billion of the people's dollars went to overseas banks? This isn't about who bought what, this is huge amoutns of mine and your dollars being used to help banks in Europe.

LOL, I can't believe you really think 163 million tax payer dollars in bonuses to Americans matters compared to 30 billion tax payer dollars to Europeans. We shouldnt have given AIG any bailout money, or much less, not just overlook the much more vast number of dollars that would be leaving the country. :td

And astonishingly enough, I see it is your dumb ass that is surprised about this.

Tell me, oh great intellect, do US banks hold the bonds of European firms?

I'll leave you to mull that one over for a while.

RandomGuy

03-16-2009, 09:37 PM

z0sa

03-16-2009, 09:45 PM

And astonishingly enough, I see it is your dumb ass that is surprised about this.

Tell me, oh great intellect, do US banks hold the bonds of European firms?

I'll leave you to mull that one over for a while.

You, my friend, are fucking annoying. I need go no further than the article to prove I have documented support.

The revelation seemed sure to cause political complications for President Barack Obama and his economic team, already on the defensive Sunday

http://thesource.typepad.com/thesource/2009/03/surprise-surprise-bailout-money-for-aig-goes-overseas.html

If the president will surely be on the defensive more+political complications, seems my astonishment is shared with some.

Not only this, the use of the word "revelation" clearly denotes this was unexpected.

RandomGuy

03-16-2009, 09:49 PM

You, my friend, are fucking annoying. I need go no further than the article to prove I have documented support.

http://thesource.typepad.com/thesource/2009/03/surprise-surprise-bailout-money-for-aig-goes-overseas.html

If the president will surely be on the defensive more+political complications, seems my astonishment is shared with some.

Dingle dick, I wasn't asking for support about whether financial institutions were intertwined. They are.

And if you want to further be an idiot, and think that the administration didn't/doesn't know that some of the bailout money will go to foreign firms you go ahead. They know, but for political reasons don't want to emphasize it, and you would do the same if your ass was hired to do that job.

Why don't you ask how much European bailout money has gone to US firms and be outraged about that?

(shakes head)

Do your research, boy.

RandomGuy

03-16-2009, 10:01 PM

.

Honestly, I think letting AIG collapse then using the tax money directly to help, equally, those struggling foreign entities would have been a slightly better option...

No, no it wouldn't.

The problem with this statement is multifold.

Here is a rather complicated analysis that shows exactly the impact of the shitstorm you so flippantly suggest was the better option.

http://www.scribd.com/doc/13112282/Aig-Systemic-090309

Let's step you through the basics, and I will set aside my irritation with your rank ignorance on the subject for a moment.

Let's say you are a bank. Banks are measured by their ending bottom line "surplus" of built-up equity.

You have assets of 100 dollars, liabilities of 90 dollars and 100-90 equals 10 bucks.

You are solvent.

Now let's say the value of your assets goes down by 11%. 100-11=89

89 dollars of assets, minus 90 dollars of liabilities, leaves you -$1. You are insolvent, and it sucks to be you.

BUT

Your bonds are assets on the books of another bank with identical assets and liabilities. You default on your debts, and THAT banks assets decline by 11%, making IT insolvent.

Oops.

A third bank holding bonds/stock from the first two suddenly loses 40% of the value of its assets.

Etc

Etc

Etc.

All the goverment had to do was to prop up the first bank with $11 in capital and it could have saved itself $100's of dollars of expenses and lost revenues, while it forced the original bank to wind down the bad assets.

z0sa

03-16-2009, 10:03 PM

Dingle dick, I wasn't asking for support about whether financial institutions were intertwined. They are.

Of course not. You're only goal:

And astonishingly enough, I see it is your dumb ass that is surprised about this.

To insult me, despite the fact the article clearly implies being surprised is a natural reaction to the news.

And if you want to further be an idiot, and think that the administration didn't/doesn't know that some of the bailout money will go to foreign firms you go ahead.

Look bro, you have no clue what I'm thinking. You completely misread my intentions and bring your hateful agenda against me, despite the fact I have not even revealed much of my opinion on the matter.

They know, but for political reasons don't want to emphasize it,

no shit, is this the political insight you possess that I do not? :lmao

and you would do the same if your ass was hired to do that job.

Last I checked, their ass is hired to protect the interests of the American people, not deliberately hide or cast shadow upon potential connotations of their actions (which they did, if you noticed in my original post - again, why would Obama be worried about bonuses to americans when american dollars, meant to bailout americans, are bailing out Europeans - and there will be political complications).

(shakes head)

Do your research, boy.

:bking

RandomGuy

03-16-2009, 10:06 PM

Somewhere along the line, the nationality of those banks changes. That is the way global capital systems work.

Normally having all that capital available to back profitable businesses is a very good thing.

But the problem comes when all those banks are intertwined. When one falls, it starts a rather nasty cascade.

The suck thing is that if AIG really didn't get any government money, it would have to have a fire sale on assets to raise cash, flooding the bond market with bonds for sale, and driving down asset prices for EVERYBODY, in addition to fucking over the institutions that held/hold its debt/stock.

Any asshat who says "let them fail, 'cause some of that money might go to them foreigners" deserves to be bitch slapped, and forced to take a few finance classes.

boutons_

03-16-2009, 10:09 PM

Rage at AIG Swells As Bonuses Go Out

Fed Decided Payouts Couldn't Be Stopped

By Brady Dennis and David Cho
Washington Post Staff Writers
Tuesday, March 17, 2009; A01

A tidal wave of public outrage over bonus payments swamped American International Group (http://financial.washingtonpost.com/custom/wpost/html-qcn.asp?dispnav=business&mwpage=qcn&symb=AIG&nav=el) yesterday. Hired guards stood watch outside the suburban Connecticut offices of AIG Financial Products, the division whose exotic derivatives brought the insurance giant to the brink of collapse last year. Inside, death threats and angry letters flooded e-mail inboxes. Irate callers lit up the phone lines. Senior managers submitted their resignations. Some employees didn't show up at all.

"It's a mob effect," one senior executive said. "It's putting people's lives in danger."

Politicians and the public spent yesterday demanding that AIG rescind payouts that they said rewarded recklessness and greed at a company being bailed out with $170 billion in taxpayer funds. But company officials contend that the uproar is scaring away the very employees who understand AIG Financial Products' complex trades and who are trying to dismantle the division before it further endangers the world's economy.

"It's going to blow up," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I have a horrible, horrible, horrible feeling that this is going to end badly."

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/16/AR2009031602961_pf.html

========

Madame LaFarge is knitting furiously!! :lol

RandomGuy

03-16-2009, 10:10 PM

Of course not. You're only goal:

To insult me, despite the fact the article clearly implies being surprised is a natural reaction to the news.

Look bro, you have no clue what I'm thinking. You completely misread my intentions and bring your hateful agenda against me, despite the fact I have not even revealed much of my opinion on the matter.

no shit, is this the political insight you possess that I do not? :lmao

Last I checked, their ass is hired to protect the interests of the American people, not deliberately hide or cast shadow upon potential connotations of their actions (which they did, if you noticed in my original post - again, why would Obama be worried about bonuses to americans when american dollars, meant to bailout americans, are bailing out Europeans - and there will be political complications).

:bking

Meh, I'm cranky tonight, and I generally don't like your dumbassery. Deal.

Obama is not worried about the money going to the big bad Europeans, because he has been briefed and presumedly understands that the financial system is a bit more interdependent than most Americans realize or understand.

The bonuses are just fucking stupid.

If you can't differentiate between the two, then again: Do your research.

Aggie Hoopsfan

03-16-2009, 10:16 PM

:lmao

O rly????

WHY IS THIS FORUM FILLED WITH FUCKING MORONS?

You shouldn't be so hard on yourself, Manny.

Oh wait, you liberals, as usual, want to gloss over the work of the Messiah and his merry band of socialists...

And all you liberal shills who replied with petty insults can go F yourselves, you're showing yourselves to be the partisan hacks that you are.

Pelosi spoke on the House floor in support of the bill, and had this to say:

Over the past several days, we have worked with our Republican colleagues to fashion an alternative to the original plan of the Bush administration.

I must recognise the outstanding leadership provided by Barney Frank, whose enormous intellectual and strategic abilities have never before been so urgently needed, or so widely admired.

I also want to recognise Rahm Emanuel, who combined his deep knowledge of financial institutions with his pragmatic policy experience to resolve key disagreements.

Yeah, I'm clueless, a mental midget. I forgot, those are Democrats she referenced, and she was taking the credit on behalf of the Bush White House, right?

http://abcnews.go.com/Business/Economy/story?id=5904056

Late Sunday afternoon, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid held a news conference with Senate Banking Committee chairman Chris Dodd to announce that Congress would vote quickly on the legislation.

Earlier the Democratic Chairman of the House Financial Services Committee, Barney Frank, said the House would "definitely" begin debate Monday on the rescue package. A House vote could follow the same day, with the Senate possibly voting by mid-week.

"Inaction would paralyze our economy," Reid said. Dodd, who has been heavily involved in the rescue negotiations, praised Republican leaders, saying that "this was a collaborative effort."

Democrats agreed to the deal after accepting compromises demanded by some conservative Republicans and moderate Democrats.

"This agreement, while not perfect, will help stabilize the economy," Reid, D.-Nev., said in the news conference Sunday.

....

Obama, appearing on CBS's "Face the Nation," was asked whether McCain should receive credit.

"No," he responded, and then tried to take some of the credit himself.

"For two weeks, I was on the phone every day with Secretary Paulson and the congressional leaders, making sure that the principles that have ultimately been adopted were incorporated into the bill."

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3110968/George-W-Bush-urges-Congress-to-accept-700bn-bail-out-plan.html

Senator Barack Obama...

"I will be talking to leaders and members of Congress later today to offer this idea and urge them to act without delay to pass a rescue plan," Mr Obama said in an e-mailed statement to reporters.

http://www.nytimes.com/2008/09/22/business/22talkshow.html?partner=rssnyt&emc=rss

Democratic lawmakers said Sunday that they shared the sense of urgency, though they called for “reciprocity” to ensure that not only Wall Street investors but also Main Street taxpayers would get relief. And they said they wanted to press ahead, probably in a parallel initiative, with a new economic stimulus package.

Senator Charles E. Schumer, New York Democrat, said legislators would not imperil the proposal by adding too many extras. “We will not Christmas-tree this bill,” he said Sunday on Fox. “The times are too urgent.”

...

“We don’t have any choice but to act,” Senator Christopher J. Dodd, a Connecticut Democrat who is the Banking Committee chairman, said on ABC. “But you’ve got to deal with that problem of foreclosures or this problem persists.”

...

Representative Nancy Pelosi of California, the House speaker, made clear earlier that she would push for a stimulus initiative, likely as part of the budget resolution Congress must adopt before adjourning. Such a plan could include an increase in unemployment benefits and spending on infrastructure projects to create jobs.

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/3131377/Congress-passes-bail-out-at-second-attempt.html

"We were dealt a bad hand and we made the most of it," said Nancy Pelosi, the Democratic House Speaker. "We were faced with a situation with terrible implications for Main Street."

...

Elijah Cummings, from Maryland, said he was voting Yes based on conversations with Mr Obama. "I've got a man who I'm hoping will be president who's saying that's he's going to do the very things that I want done," he said. "It makes me feel a lot better."

Awww, Obama called Rep. Cummings and made him feel better.

Yep, Pelosi, Obama, and co. weren't pushing TARP1.0 at all...

Just sayin'...

z0sa

03-16-2009, 10:16 PM

Meh, I'm cranky tonight, and I generally don't like your dumbassery. Deal.

Generally? So we have some chance of getting along eventually, Deal it is.

Obama is not worried about the money going to the big bad Europeans, because he has been briefed and presumedly understands that the financial system is a bit more interdependent than most Americans realize or understand.

Economics is fascinating. That said, we've gotten to a pretty shitty point when you can accept mine and your tax dollars are helping europeans get back on their feet, and not .. well, me and you.

The bonuses are just fucking stupid.

Agreed, but with all the money we gave them, what does it really matter?

RandomGuy

03-16-2009, 10:25 PM

You shouldn't be so hard on yourself, Manny.

Oh wait, you liberals, as usual, want to gloss over the work of the Messiah and his merry band of socialists...

And all you liberal shills who replied with petty insults can go F yourselves, you're showing yourselves to be the partisan hacks that you are.

Pelosi spoke on the House floor in support of the bill, and had this to say:

Yeah, I'm clueless, a mental midget. I forgot, those are Democrats she referenced, and she was taking the credit on behalf of the Bush White House, right?

http://abcnews.go.com/Business/Economy/story?id=5904056

[/b]

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3110968/George-W-Bush-urges-Congress-to-accept-700bn-bail-out-plan.html

http://www.nytimes.com/2008/09/22/business/22talkshow.html?partner=rssnyt&emc=rss

http://www.telegraph.co.uk/news/worldnews/northamerica/usa/3131377/Congress-passes-bail-out-at-second-attempt.html

Awww, Obama called Rep. Cummings and made him feel better.

Yep, Pelosi, Obama, and co. weren't pushing TARP1.0 at all...

Just sayin'...

http://trephination.net/gallery/macros/reacharound.jpg

Just sayin'...

Seriously for half a second: You are a hack. GTFO, because the only thing you ever accomplish with your posts is to prove how biased and unfair you are. Honestly, you are the kind of idiot who hurts conservatism and the Republican party the most.

The juiciest part of that is that you either don't want to admit that to yourself, or just can't wrap your mind around how unproductive your posts are to your cause.

You are just like the islamic terrorists who indescriminately bomb places to wage a jihad. Sure, you kill people you hate, but in the end you end up turning a lot more against you.

Sure, you score some cheap points here and there, but in the end you turn a lot of people against you.

FAIL.

RandomGuy

03-16-2009, 10:27 PM

Generally? So we have some chance of getting along eventually, Deal it is.

Economics is fascinating. That said, we've gotten to a pretty shitty point when you can accept mine and your tax dollars are helping europeans get back on their feet, and not .. well, me and you.

Agreed, but with all the money we gave them, what does it really matter?

Dammit, it is a lot easier to be cranky with you when you are being cranky right back.

Here I go off on a tear, and you go being halfway decent. Dammit. How can I be cranky now?

:depressed

Oops, wife wants to watch "Bones". Time to do that.

New smiley face!! Neato.

:pop:

LnGrrrR

03-16-2009, 10:28 PM

Quite frankly, I think a lot of those executives are lucky that lynch mobs are mostly a thing of the past.

They better hope.

z0sa

03-16-2009, 10:36 PM

Dammit, it is a lot easier to be cranky with you when you are being cranky right back.

Here I go off on a tear, and you go being halfway decent. Dammit. How can I be cranky now?

:depressed

i'd be cranky watching bones too, but seriously, i don't think ill of you, in fact very much the opposite.

Jekka

03-16-2009, 10:38 PM

Anyone watching Colbert? I'm starting to like his angry pitchfork-wielding mob idea ...

MannyIsGod

03-16-2009, 11:35 PM

:hack should bring up an AHF icon.

Trainwreck2100

03-17-2009, 12:02 AM

whf is the gov. getting a free pass on this they've already giben this company money twice and each time they could have put stipulations on the injections.

TDMVPDPOY

03-17-2009, 05:43 AM

JudynTX

03-17-2009, 08:15 AM

This is pissing me off more each day. $@!$!@$%!#&^%#%@@$@^%#%$^%%(*&^))!@%!%!$%!$!#$^^(^)&#$!@$%!5

101A

03-17-2009, 08:32 AM

Hari Kari (http://apnews.myway.com/article/20090317/D96VPA601.html)?:

Senator suggests AIG execs should kill themselves

By NIGEL DUARA p {margin:12px 0px 0px 0px;} IOWA CITY, Iowa (AP) - Iowa Sen. Charles Grassley suggested that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant by resigning or killing themselves.
The Republican lawmaker's harsh comments came during an interview with Cedar Rapids, Iowa, radio station WMT on Monday. They echo remarks he has made in the past about corporate executives and public apologies, but went further in suggesting suicide.
"I suggest, you know, obviously, maybe they ought to be removed," Grassley said. "But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide.
"And in the case of the Japanese, they usually commit suicide before they make any apology."
Grassley spokesman Casey Mills said the senator isn't calling for AIG executives to kill themselves, but said those who accept tax dollars and spend them on travel and bonuses do so irresponsibly.
"Senator Grassley has said for some time now that generally speaking, executives who make a mess of their companies should apologize, as Japanese executives do," Mills said. "He says the Japanese might even go so far as to commit suicide but he doesn't want U.S. executives to do that."
The senator's remarks added to a chorus of public outrage over the disclosure that AIG intends to pay its executives $165 million in bonuses after taking billions in federal bailout money. President Barack Obama lambasted the insurance giant for "recklessness and greed" on Monday and pledged to try to block payment of the bonuses.

Pretty funny, but in one of the most ironic statements I've read in a while (coming from a Senator):

those who accept tax dollars and spend them on travel and bonuses do so irresponsibly

Extra Stout

03-17-2009, 08:41 AM

We should be pissed about having to pump up these assholes, and we are, but the bonuses were the last straw. Quite frankly, I think a lot of those executives are lucky that lynch mobs are mostly a thing of the past.
In any halfway decent country that had any respect for itself, those executives would be long since dead.

This isn't the first time in American history Wall Street richers have regarded themselves as above the law. The last time it happened class warfare became literal.

One building on Wall Street still bears scars from the shrapnel.

Just sayin'.

RandomGuy

03-17-2009, 08:42 AM

barak obama administration = AIG = fail

his administration continue to pump money into this company which is continue in the red, which has not shown any favorable results why it should continue asking for bailout money.

so far he has spent so much on bailout companys, yet he has done nothing to stimulate the economy, whatever happen to approving infrastructure projects, creating jobs? shit bro you already spent 1/10 of the allocated budget available on something that isnt doing shit to the economy. Watabout the SME and small businesses who are struggling to attain credit to keep their business going or keeping employees, keeping jobs....where are the incentives that these struggling businesses should be getting to keep jobs.

im sure his going to ask for another bailout package when his admin runs out of money to start funding projects.......

I liken a lot of the bailouts to stopping the bleeding for an accident victim. Stopping the bleeding will not in and of itself heal injuries, but if you don't do it, the injuries will never have a chance to heal, because the person will bleed to death first.

As I have said before, and explained here in this thread, stopping a large institution from going under and winding it down is better for all concerned than letting it fail.

If one goes back to our notional bank:

Assets = 100
Liabilities= 90
Equity/Surplus=10

This company was vulnerable to an 11% drop in asset prices.

Now, lets assume that regulators relaxed the reserve requirements from a minimum of 10% (of assets) to, say, 2%(of assets).

The bank can now go out and borrow (leverage) itself even more to maximize returns.

Since it only has to have 2% reserve, it can instantly "grow" itself by borrowing somebody elses assets and promising to pay that back at a future date.

On the books, that transaction looks like this:

Assets = 100 + 400 = 500
Liabilities = 90 + 400 = 490
Equity/Surplus= 10

On paper the bank has gotten FIVE times larger in terms of assets.

BUT

What happens if those assets take drop now? Before the banks assets would have to drop by 11% to make it insolvent.

Let's assume that the drop now is only 4%.

Assets = 500*.96 = 480
Liabilities = 490
Surplus = -10

With this leverage, a smaller percentage drop equals a MUCH larger negative surplus (loss) in absolute terms.

Before the bank was -$1 in the hole, with an 11% drop, but now with a 4% drop it is -$10. The scope of the losses is TEN times larger.

What happens if that new, bigger bank had actually exeperienced a similar 11% decline in assets as its smaller, better capitalized cousin?

Assets = 500*.89 = 445
Liabilities = 490
Surplus = -45

Same percentage drop in asset value, but the losses are FORTY-FIVE times larger.

Oops.

RandomGuy

03-17-2009, 08:46 AM

RandomGuy

03-17-2009, 08:57 AM

In any halfway decent country that had any respect for itself, those executives would be long since dead.

This isn't the first time in American history Wall Street richers have regarded themselves as above the law. The last time it happened class warfare became literal.

One building on Wall Street still bears scars from the shrapnel.

Just sayin'.

The governemnt + management of AIG before estimated that the legal costs in going back on the contracts would cost more than the bonuses themselves.

Now, if I were AIG's management, and I guess I am in a way, I would say to the executives:

"We aren't paying you shit. You can sue, but we WILL publish your name and the amount of the bonus and make that as public as possible. At the very least, you will be hounded by reporters looking for some cheap ratings, at worst... well, let's just leave it at that."

I think that the leverage we have to cancel those bonuses is a tad greater than it was a month ago for that reason.

Further,

Someone used the argument that it would "chase away the talent" at a time when we need their skills to wind down the complicated transactions.

To that I say: Oh really? Would YOU hire an AIG financial arm executive?

These people's job prospects should they choose to leave AIG, would be... limited. I think that the person making the argument about "chasing away talent" doesn't seem to realize how bad the job market is for finance people at the moment.

coyotes_geek

03-17-2009, 08:57 AM

We haven't "blindly given away billions and billions of dollars to AIG with no strings attached".

We went in with full knowledge and awareness of what would happen should AIG fail, and have pretty much full ownership of the place.

We should be pissed about having to pump up these assholes, and we are, but the bonuses were the last straw. Quite frankly, I think a lot of those executives are lucky that lynch mobs are mostly a thing of the past.

Fine, we own the place. But has that given us any control? None that I've seen. Has the Board of Directors been replaced by administration appointees who are going to look out for Our investment? Can anyone tell us where the money is going? How is Our company that we own accountable to us? Judging from the bonus scandal, it sure looks like it isn't. It looks like business as usual, only that AIG gets to burn our money instead of theirs.

LnGrrrR

03-17-2009, 09:04 AM

That new -$45 loss is bad.

That is where your bailouts are going, to cover those kinds of losses.

Remember, that the over-extended bank you are helping has outstanding bonds and stock held by OTHER banks.

If that bad bank fails, then the assets of the other banks take a hit too, multiplying the losses in a nasty cascade of failures.

Remember, banks CANNOT loan money if they do not meet the minimum reserve requirements.

So, if the losses in a bank don't make it insolvent, it still might not be able to loan out money, until it unwinds (read: shrinks over time) to a point where it has the mininum percentage surplus.

Hence the "credit" crunch.

RG, I get your point about the credit crunch, and it is quite valid. My concern is twofold.

From a realist standpoint, will bailing these banks out support our extended, debt-run economy in the long run, or will it only extend an artificial bridge until the next collapse? Is a crunch inevitable? Or do we hope to sustain our economy until America discovers the next "Big Thing" to sustain it?

From an ideological standpoint, is it correct to support the economy (and Wall St) on the backs of workers? Should we just take this financial hit and crunch our spending back to where it should be, free market style? Or is it a better good to prevent the loss of established wealth through unfair means, by rationalizing that the ends will be worth the means? Is it right to tax the majority of citizens unfairly to support a failing structure, even if supporting that structure would theoretically help citizens much more than letting it collapse?

(I know, it's wordy, but I have trouble explaining things without a white board and markers. :D)

RandomGuy

03-17-2009, 09:05 AM

Fine, we own the place. But has that given us any control? None that I've seen. Has the Board of Directors been replaced by administration appointees who are going to look out for Our investment? Can anyone tell us where the money is going? How is Our company that we own accountable to us? Judging from the bonus scandal, it sure looks like it isn't. It looks like business as usual, only that AIG gets to burn our money instead of theirs.

Yes, it has given us control. We are in the middle of exercising that control.

The money used to fund the losses are going to the holders of the deriviatives contracts, whoever they are, and yes, that includes foreign banks, and companies.

It is accountable to us, just as any management is accountable to us. We can and probably will, fire a few people.

Remember that the bonuses were allocated last january or so, well before the losses and bailouts. We weren't in control, and they weren't in trouble at this time last year.

You CAN bet that going forward some, if not all, of these asshats WILL lose their jobs, and WILL find it almost impossible to get jobs someplace else doing the same thing they were doing.

The most probable outcome is to break up the company into the sound parts ( the stable, profitable insurance companies), sell them, and for the investment arm, we will simply wind that down.

AIG will pretty much cease to exist, and the government/shareholders will get money from the sale of those subsidiaries.

MannyIsGod

03-17-2009, 09:12 AM

Think about it this way. When you have a sore throat you don't run to the emergency room and you simply wait it out because the consequences aren't great.

But when you have a cancerous tumor you don't avoid chemotherapy because the chemo hurts your body. You take the short term pain because as much as it hurts and damages your body it sure beats the alternative of dying.

The bailouts are an imperfect solution where there was no perfect solution to be had. We can fix our economy in the long term but it will involve changes. Personally I believe the greatest change that needs to be made has to do with the education of our work force which is why I really think Obama's long term plans are on the right track.

I think your last statement clearly answers itself. Is it better for us to experience short term pain to avoid what amounts to financial death? Yes. I sincerely believe that people cannot fathom what the collapse of the United States financial system means to the world. If such an event were to occur, it would be the defining moment in our lives and would make 9/11 look like a wonderful day in comparison because of all the death and destruction that would result.

RandomGuy

03-17-2009, 09:15 AM

RG, I get your point about the credit crunch, and it is quite valid. My concern is twofold.

From a realist standpoint, will bailing these banks out support our extended, debt-run economy in the long run, or will it only extend an artificial bridge until the next collapse? Is a crunch inevitable? Or do we hope to sustain our economy until America discovers the next "Big Thing" to sustain it?

From an ideological standpoint, is it correct to support the economy (and Wall St) on the backs of workers? Should we just take this financial hit and crunch our spending back to where it should be, free market style? Or is it a better good to prevent the loss of established wealth through unfair means, by rationalizing that the ends will be worth the means? Is it right to tax the majority of citizens unfairly to support a failing structure, even if supporting that structure would theoretically help citizens much more than letting it collapse?

(I know, it's wordy, but I have trouble explaining things without a white board and markers. :D)

Bailing out these banks will sort of support our "debt-ridden" economy, but I think this episode will probably change people's willingness, and certainly their capacity to borrow. I think that is a good thing overall.

It is an "artificial" bridge in the sense that a patch on a cracked dam is artificially keeping that dam from bursting.

As I noted in my post this stuff will wind down eventually. The result WILL be a smaller economy that won't grow as fast as it had been, but that isn't a bad thing, because that past growth was unsustainable.

History has shown that economies will have some sort of bubbles and that pattern, I would bet, will be likely to continue in the future. I think it is simply a feature of free-market capitalism.

One can limit the damage, and or risk-taking using regulatory levers, such as requiring the banks to keep a larger % surplus, and you can be that is what is going to happen.

It happened in the insurance industry in the 80's and 90's, and unsurprisingly, the insurance industry (don't think of AIG, because their investment arm was NOT an insurance company, it was more like a hedge fund) has proven remarkably resiliant.

Bottom line Realistic answer:
We will be ok. It will suck in the short term. Yes, somehow, somewhere, somewhen, there WILL be another bubble. I think this episode will be fresh enough on people's minds though that as soon as that bubble is recognized, it has a greater chance of being deflated sooner to limit the damage tho'.

On to the ideological part of your question. Next post.

RandomGuy

03-17-2009, 09:27 AM

From an ideological standpoint, is it correct to support the economy (and Wall St) on the backs of workers? Should we just take this financial hit and crunch our spending back to where it should be, free market style? Or is it a better good to prevent the loss of established wealth through unfair means, by rationalizing that the ends will be worth the means? Is it right to tax the majority of citizens unfairly to support a failing structure, even if supporting that structure would theoretically help citizens much more than letting it collapse?

Is it correct, as in moral/ethical?

Yes.

Remember that it is all somewhat interconnected.

If a big bank raises capital on Wall Street through selling stocks to investors, it has money to loan to your small business, and that directly links investors to Main Street.

Remember also that MOST stocks sold are sold to retirement funds, and mutual funds. So Wall Street IS Main Street at some level.

We are now, as we have always done, using something of a hybrid of free-market solutions and governmental policy solutions. There has never been a truly "free" market, and likely never will be.

We will let a lot of the bad companies unwind over time and simply fade away. This process of putting them to sleep will take a bit longer than putting a bullet in their figurative brain, but will cause a lot less disruption.

I think the end of the process will be about the same, it is simply the speed that will be a bit different. It is very hard to say whether dragging it out is worse than letting it collapse totally and getting it over with.

I would prefer the slower stable option, as my gut says that is better overall, but if you were to ask me to back that intiution up with data or any kind of reasoning, I couldn't. On the other side of the coin, the "sharp shock" school of thought has as much data on their side, i.e. little to none.

RandomGuy

03-17-2009, 09:30 AM

Personally, I think there will be some rather fundamental changes in a lot of people's thinking after this is all over.

I think we will be a bit more risk-averse, and more prone to saving more, both of which bode well for reduing our overall personal, corporate, and governmetnal debt load.

The next big nastiness will be what we do with Social Security and Health Care, both of which promise to be even more expensive than our current bailout.

I think the result of THAT will be to force us to be: more risk-averse and more prone to save.

DarrinS

03-17-2009, 09:35 AM

I don't want to see the CEO of AIG berated by the likes of Barney Browneye Frank. If there's really this much outrage, then DO SOMETHING ABOUT IT besides grandstanding.

smeagol

03-17-2009, 10:06 AM

you do understand I'm talking about the european banks, don't you?

I think RG answered this question appropriately.

LnGrrrR

03-17-2009, 10:14 AM

But when you have a cancerous tumor you don't avoid chemotherapy because the chemo hurts your body. You take the short term pain because as much as it hurts and damages your body it sure beats the alternative of dying.

A great analogy! I think many on the other side are saying, "Why go through the chemo and pain if there's a good chance that my cancer might not go into remission?"

And yes, I think you're right about the financial crisis. I can not picture it being that bad, to be honest. But I have no background in economics, so my opinions are just that.

LnGrrrR

03-17-2009, 10:17 AM

Bottom line Realistic answer:
We will be ok. It will suck in the short term. Yes, somehow, somewhere, somewhen, there WILL be another bubble. I think this episode will be fresh enough on people's minds though that as soon as that bubble is recognized, it has a greater chance of being deflated sooner to limit the damage tho'.

So, assuming I'm reading you right, you're saying that it's much better if we support our current economy now, as consequences will be dire if not. By easing slowly into an economic crunch, it will prevent widespread panic/global disarray of finances. And the scare will be enough to ease the people along towards this path.

A true free market economy would involve wickedly jagged spikes both up and down, which does not necessarily lead to a better economy, as wealth can be taken apart quicker. Hence the regulation, to smooth out the hills and valleys.

LnGrrrR

03-17-2009, 10:19 AM

I would prefer the slower stable option, as my gut says that is better overall, but if you were to ask me to back that intiution up with data or any kind of reasoning, I couldn't. On the other side of the coin, the "sharp shock" school of thought has as much data on their side, i.e. little to none.

Thanks for the nuanced answer. As you said, I think both standpoints have their ethical issues. It's similar to the "Push a man in front a bus" question, which has no correct answer.

LnGrrrR

03-17-2009, 10:26 AM

The next big nastiness will be what we do with Social Security and Health Care, both of which promise to be even more expensive than our current bailout.

The Social Security/Medicare issue provides interesting contrasts with the Bank Bailout crisis as well as the problems that the Auto makers are having.

What's the best way to deal with moral hazard in these situations, where it benefits a person/company to make a guarantee now that they won't have to pay on in the future?

The members of government who made a promise to future generations knew that they'd be long gone when the bill came due.

The members of the automakers who made a promise to union workers knew that they'd be long gone when the bill came due.

The members of the banks who took their money knew they could make enough for life even if it was at the expense of the life-blood of their company.

What is a good way to reduce these sorts of moral hazards, given that humans are in general short-sighted and greedy? Are there good, documented methods? Are they regulatory in nature or otherwise?

RandomGuy

03-17-2009, 10:45 AM

The Social Security/Medicare issue provides interesting contrasts with the Bank Bailout crisis as well as the problems that the Auto makers are having.

What's the best way to deal with moral hazard in these situations, where it benefits a person/company to make a guarantee now that they won't have to pay on in the future?

The members of government who made a promise to future generations knew that they'd be long gone when the bill came due.

The members of the automakers who made a promise to union workers knew that they'd be long gone when the bill came due.

The members of the banks who took their money knew they could make enough for life even if it was at the expense of the life-blood of their company.

What is a good way to reduce these sorts of moral hazards, given that humans are in general short-sighted and greedy? Are there good, documented methods? Are they regulatory in nature or otherwise?

Very good questions that will have to wait. Time to get some work done.

Crookshanks

03-17-2009, 12:15 PM

This is a phony outrage - Congress knew about these bonuses last year. These are not production bonuses - they're retention bonuses and they are contractually agreed upon in the year BEFORE they are given out. Also, take a look at the following article - Chris Dodd is an idiot - he's only upset that he's been exposed!
=========================

Amid AIG Furor, Dodd Tries to Undo Bonus Protections He Put In Rich Edson
FOXBusiness

Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG: 0.9011, 0.121, 15.51%) bonus recipients so the government could recoup some or all of the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing an AIG bonus tax.

The move represents somewhat of an about-face for the Senator.

While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009” -- which exempts the very AIG bonuses Dodd and others are now seeking to tax.

The amendment made it into the final version of the bill, and is law.

Separately, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.

Dodd’s office did not immediately return a request for comment.

One of AIG Financial Products’ largest offices is based in Connecticut.

Dodd Amendment Rules

Crack down on bonuses, retention awards and incentive compensation: Bonuses can only be paid in the form of long-term restricted stock, equal to no greater than 1/3 of total annual compensation, and will vest only when taxpayer funds are repaid. There is an exception for contractually obligated bonuses agreed on before Feb. 11, 2009.
For institutions that received assistance totaling less than $25 million, the bonus restriction applies to the highest compensated employee; $25 million to $250 million, applies to the top five employees; $250 million to $500 million, applies to the senior executive officers and the next top 10 employees; and more than $500 million applies to the senior executive officers and the next top 20 employees (or such higher number as the Secretary determines is in the public interest).

--------------------------------------------------------------------------------

Name Office Total Contributions

Dodd, Chris (D-CT) Senate $103,100
Obama, Barack (D-IL) Senate $101,332
McCain, John (R-AZ) Senate $59,499
Clinton, Hillary (D-NY) Senate $35,965
Baucus, Max (D-MT) Senate $24,750
Romney, Mitt (R) Pres $20,850
Biden, Joseph R Jr (D-DE) Senate $19,975
Larson, John B (D-CT) House $19,750
Sununu, John E (R-NH) Senate $18,500
Giuliani, Rudolph W (R) Pres $13,200

The Franchise

03-17-2009, 04:44 PM

AIG should not be getting any tax money. If anything, the tax money should go to homeowners in foreclosure. If AIG didn't get the bailout money, then they would be bankrupt and these executive would not get their unearned bonuses.

There is nothing in the U.S. Constitution authoring these bailouts, and on top of that they are bad policy, not in the public's interest. Taxing the middle class, including those in foreclose, and then sending money to millionaires does not help the economy. it only props up crooked people who are financing the campaigns of the very same republicrats who are voting for these bailouts.

+1 :toast

Marcus Bryant

03-17-2009, 06:39 PM

Marcus Bryant

03-17-2009, 06:46 PM

When I drink I read this (http://www.federalreserve.gov/monetarypolicy/files/20090224_mprfullreport.pdf).

Marcus Bryant

03-17-2009, 06:48 PM

Anyways, the font of our current troubles is that nobody wants to reign in their appetites.

boutons_

03-17-2009, 06:55 PM

http://accuracy.org/images/ipa_01.gif [/URL] (http://accuracy.org/index.php) (http://accuracy.org/subscribe.php) (https://secure.groundspring.org/dn/index.php?id=415)
News Release

How to Stop AIG's Bonuses

March 16, 2009

[URL="http://accuracy.org/email.php?articleId=1949"] (http://accuracy.org/search.php)Four leading analysts on finance Monday issued a statement outlining how to stop the AIG bonuses:

"AIG's decision to pay out at least $165 million in bonuses takes the bank bailout program's abuse of the public trust to a whole new level.

"This act simply cannot be allowed to stand. The only question is how to stop it.

"'Sanctity of contracts' has for some time been TARP's equivalent of Harry Potter's magic wand, the thing you waved to make difficulties disappear. AIG clearly takes the Treasury, the Federal Reserve, and the Obama administration for fools, who can be counted on to roll over yet again at the first whisper of the magic words. There is no reason for agents of the people of the United States, whose money AIG plays with, to be so sheep-like.

"Remember that this is a firm that is 79.9 percent owned by the United States government. It is therefore quite possible to abort this outrage, by decisive exercise of public authority. Within existing law, there is more than one way to do it. But a direct solution is readily at hand:

Firstly, the U.S. trustees in charge of the firm must immediately instruct the corporate treasurer to make no payments of any bonuses. They also need to order him to issue stop-payment orders on any checks that fly out the door at the last minute, as with Merrill Lynch.

Then the trustees need to split off the derivatives unit from the rest of the firm and separately incorporate it. This step leaves AIG's other businesses free to operate as usual. If the recipients of the bonuses refuse to waive them, then the derivatives unit should at once be thrown into bankruptcy, terminating all obligations to pay them.

Right now, press reports suggest that the firm's top management waited until the last minute to inform the government of what was happening. AIG CEO Edward Liddy, accordingly, should be asked to resign at once, for the sake of public confidence and to send a clear signal that gaming the system is unacceptable. It is also past time for an investigation of the validity of AIG's past accounting and securities disclosures and its executive compensation program by the Office of Thrift Supervision, the Securities and Exchange Commission, and the FBI.

"This leaves open the question of how to deal with all other obligations of the derivatives unit, including the notorious credit default swaps. We, like most independent analysts, are mystified by the determination of the Federal Reserve and Treasury to keep paying these off at 100 percent of their face value. But that's an issue for tomorrow. Today the task is to stop a grotesque abuse before it is too late. The path we outline here would do it, without throwing markets into turmoil. Nothing less than public confidence in the United States government as a whole is now at stake."

Interviews are available with the analysts who issued the statement:

WILLIAM K. BLACK ([email protected])
Black is associate professor of economics and law at the University of Missouri, Kansas City. He was a senior regulator during the savings and loan scandal and blew the whistle on prominent politicians, including House Speaker Wright and the five U.S. senators who became famous as the “Keating Five.” He was the lead staffer on the successful reregulation of the S&L industry and directed the investigations that led to convictions in many of the worst S&L frauds.

THOMAS FERGUSON ([email protected])
Ferguson is professor of political science at the University of Massachusetts, Boston and the author of Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems.

ROBERT JOHNSON ([email protected])
Johnson was formerly a managing director at Soros Funds Management and chief economist of the Senate Banking Committee. Part I of Ferguson and Johnson’s “Too Big To Bail: The 'Paulson Put,' Presidential Politics, and the Global Financial Meltdown," appears in the next issue of the International Journal of Political Economy.

WALKER TODD ([email protected])
Todd worked for many years in the Federal Reserve System. He was a legal officer of the Federal Reserve Bank of New York and a legal and research officer at the Cleveland Federal Reserve Bank. He is the author of many studies of bank failure, reform of the Fed's discount window, open market operations, and the Reconstruction Finance Corporation of the 1930s.

Also, see "The Sanctity of AIG's Contracts (http://www.commondreams.org/view/2009/03/16-6)" by Glenn Greenwald.

For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167

Yonivore

03-17-2009, 09:14 PM

Cant_Be_Faded

03-18-2009, 12:00 AM

I'd rather Barack become dictator than anyone remotely like yonivore becoming president ever again.

jack sommerset

03-18-2009, 12:06 AM

i'd rather barack become dictator than anyone remotely like yonivore becoming president ever again.

weak

fail

ChumpDumper

03-18-2009, 02:45 AM

Bush never plagiarized other people's articles to make himself look smarter.

MaNuMaNiAc

03-18-2009, 06:42 AM

So, now you've got the White House calling it the "Dodd Amendment" in an attempt to deflect attention from the fact Obama (nor his aides) read the Spendulus Bill before signing it. Democrats throwing each other under the bus.

This administration is a joke and, it'd be funny if he weren't so incompetent.

...

http://www.spurstalk.com/forums/showpost.php?p=3201164&postcount=48

zero fucking shame, don't you? I was half expecting a meltdown similar to Buddy Holly's after that post, but you've done it before, and obviously hasn't stopped you from still posting as if you're still relevant :rolleyes

The administration is a joke?? :lol what about you? you plagiarizing fuck

cool hand

03-18-2009, 07:57 AM

well.......AIG is paying back the bonuses..............end of story...lets move on.

Repugs lose again.

coyotes_geek

03-18-2009, 08:14 AM

well.......AIG is paying back the bonuses..............end of story...lets move on.

Repugs lose again.

:lol Please. The employees get to keep the money and all Geitner is doing is deducting the bonus money out of the next round of bailout money. And AIG can always get more bailout money. This is just a lame attempt by Geitner to save face. It's the equivalent of trying to punish a teenager by telling them you're going to take away 100 text messages a month from their unlimited texting plan.

smeagol

03-18-2009, 08:56 AM

This administration is a joke and, it'd be funny if he weren't so incompetent.

What about the last one? Wasn't that one a fucking joke?

MannyIsGod

03-18-2009, 09:33 AM

DarrinS

03-18-2009, 09:39 AM

coyotes_geek

03-18-2009, 09:56 AM

I wish someone from AIG would just come out and tell the government to shut the fuck up. They need to stop acting like they made some kind of philanthropic move by saving AIG. They did it only because it was nessecary to save all of us, and in the long run the 135 million in bonus money isn't even to shake your dick act considering the context of the entire situation.

I'm really annoyed with all the political grandstanding to this point. I was annoyed on day one, but now that this is everywhere I'm really annoyed.

Well said.

True, there are a bunch of douchebags at AIG. But they are douchebags who our government willingly made business partners to taxpayers. And frankly the harsh truth of the matter is that if we taxpayers want to hold on to any hope whatsoever that we might actually get our money back out of this deal then we need to realize that we're dependent upon those douchebags to fix this mess. I'm sure they'll be more motivated than ever to look out for our best interests now that we've made a public spectacle of them.

coyotes_geek

03-18-2009, 10:03 AM

Yes, it has given us control. We are in the middle of exercising that control.

The money used to fund the losses are going to the holders of the deriviatives contracts, whoever they are, and yes, that includes foreign banks, and companies.

It is accountable to us, just as any management is accountable to us. We can and probably will, fire a few people.

Remember that the bonuses were allocated last january or so, well before the losses and bailouts. We weren't in control, and they weren't in trouble at this time last year.

You CAN bet that going forward some, if not all, of these asshats WILL lose their jobs, and WILL find it almost impossible to get jobs someplace else doing the same thing they were doing.

The most probable outcome is to break up the company into the sound parts ( the stable, profitable insurance companies), sell them, and for the investment arm, we will simply wind that down.

AIG will pretty much cease to exist, and the government/shareholders will get money from the sale of those subsidiaries.

Apparently the only control we have is the ability to drag their CEO in front of congress and ridicule him. We effectively own the company, yet all we can do is try to exert some external political pressure. That's not control. Who the hell buys 80% of a company and doesn't even have one seat on the board of directors?

Crookshanks

03-18-2009, 10:39 AM

FURY, DC HYPOCRITES
March 18, 2009

ALL the world's a stage, wrote Shakespeare, and in the world of Washington, the curtains have opened on the most elaborate farce of the year.

Welcome, taxpayers, to the Kabuki Theater of AIG Outrage - where DC's histrionic enablers of taxpayer-funded corporate bailouts compete for Best Performance of Hypocritical Indignation.

Over the weekend, cloaked in their finest populist costumes, the Beltway's hair-sprayed and powdered politicians and White House aides took to the airwaves to inveigh against $165 million in employee-retention payments made by the government-backed insurance giant.

The checks were mailed Friday, but the March 15 bonus deadline had been on the Capitol Hill radar screen since December.

But it wasn't until last week that the hapless court jester of the Obama administration, Treasury Secretary Timothy Geithner, scrambled to rein in the payments.

AIG Chief Executive Edward Liddy basically told him to buzz off.

Geithner, the primary architect of the original $85 billion AIG bailout last fall, "reluctantly" approved the bonuses.

And now his outraged boss has ordered him to scour every legal nook and cranny possible to get the money back.

Spare me President Obama's finger-wag. He's "outraged?" Meh.

Two weeks ago, Team Obama forked over another $30 billion for the basket-case company after it reported $61.7 billion in fourth-quarter losses.

That's on top of the first $85 billion round and the second $38 billion round under George W. Bush - both of which Obama supported. (Obama, by the way, collected more than $101,000 in AIG campaign contributions.)

Don't talk to me about how the Obama administration opposes rewarding failure. And don't talk to me about all the politicians stampeding to tax AIG's bonuses.

Democratic Sen. Chris Dodd of Connecticut, the corporate crony who is the largest recipient of AIG donations, is now leading the charge to tax the retention payments in order to recoup the $450 million the company is paying to employees in its financial-products unit.

But Dodd, it turns out, was for protecting AIG's bonuses before he was against them.

Fox Business reporter Rich Edson pointed out that during the Senate porkulus negotiations last month, Dodd successfully inserted a teeny-tiny amendment that provided for an "exception for contractually obligated bonuses agreed on before Feb. 11, 2009," which exempts the very AIG bonuses Dodd and others are seeking to tax.

Pay no attention to what his left hand was doing. Dodd's right fist is pounding mightily, mightily for the sake of the taxpayers. The hypocritical indignation on the Hill is bipartisan.

On his Twitter page last night, Sen. John McCain huffed, "If we hadn't bailed out AIG = no bonuses for greedy execs."

Well, if the GOP presidential candidate had held fast to his opposition to such doomed corporate bailouts in the first place, maybe bailout-a-palooza wouldn't have spiraled into the gazillion-dollar mess it inevitably became.

If Washington's newfound opponents of rewarding failure want to do taxpayers a favor, how about giving back their automatic pay raises? How about returning all their AIG donations?

How about taking back all the bailout money to all the failed enterprises, from Fannie Mae and Freddie Mac to AIG, the automakers and the big banks? Barry? Harry? Nancy? John? Chris? Bueller? Bueller?

Exit stage left. The curtain falls.

Michelle Malkin is author of "Unhinged: Exposing Liberals Gone Wild."

MannyIsGod

03-18-2009, 10:44 AM

Ok, fair enough with the article since I can't disagree with most of it. But McCain should add a bit more to his twitter page. I suggest this.

"If we hadn't bailed out AIG = no bonuses for greedy exects BECAUSE THERE WOULD BE NO WORLD FINANCIAL SYSTEM AS WE KNOW IT"

That works about well. There's nothing else like attacking fake political moves with fake political moves.

ChumpDumper

03-18-2009, 10:45 AM

A lot of it depends upon who specifically is getting these bonuses. AIG is a big company, and many of its components were performing well and had nothing to do with the meltdown. Those guys who got the company and the everyone else into the current financial crisis, though -- why were they even retained long enough to receive a bonus?

Can you imagine that performance review?

"Well, on the plus side you have perfect attendance the past two quarters and you won the limbo contest at our last corporate retreat. On the minus side you ruined this company and threw the economy of the entire world into a deep recession that will probably get worse in the near future. Here's a check for a few million for staying on. Thanks for everything you do."

Crookshanks

03-18-2009, 10:49 AM

A lot of it depends upon who specifically is getting these bonuses.

I heard this morning that over 40 people who got these bonuses are no longer even employed by AIG. Considering these were "Retention" bonuses - that seems rather idiotic!

MannyIsGod

03-18-2009, 10:50 AM

Oh, and making AIG pay back the bonuses is laughable considering that by this point WE ARE AIG since we fucking own it. I just hate this entire dog and pony show.

Cant_Be_Faded

03-18-2009, 11:00 AM

I'm waiting for a yonivore post that is 99% from an article he did not reference . . . .

LockBeard

03-18-2009, 11:02 AM

George Gervin's Afro

03-18-2009, 11:09 AM

This entire ordeal is getting really fucking entertaining.

Bunch of career politician morons who could not hack it in business are now trying to tighten up the leash and act like they have any fucking idea of what to do.

Seriously dude you listen to talk radio to much. Politicians who could not hack it in business?:lmao

Please give me one example of one the politicians you cite as having failed in business..

Of course being a CEO for failed company can get you the republican nomination for President..

you my friend are a moron.

MannyIsGod

03-18-2009, 11:48 AM

Seriously dude you listen to talk radio to much. Politicians who could not hack it in business?:lmao

Please give me one example of one the politicians you cite as having failed in business..

Of course being a CEO for failed company can get you the republican nomination for President..

you my friend are a moron.

George W. Bush

MannyIsGod

03-18-2009, 11:54 AM

Obama probably just gave one of the better simple explanations of the situation I've heard. I hope they gets played on the news over and over so people gain a better understanding for the reasoning on enacting the rescue of AIG. Actually the entire press conference held a much better tone regarding what they will do with this situation. Maybe he realized how ridiculous the outrage statements a few days ago were (not to mention useless) and are moving in a better direction now.

Viva Las Espuelas

03-18-2009, 11:58 AM

con⋅tract

–noun
1. an agreement between two or more parties for the doing or not doing of something specified.
2. an agreement enforceable by law.
3. the written form of such an agreement.

RandomGuy

03-18-2009, 12:18 PM

well.......AIG is paying back the bonuses..............end of story...lets move on.

Repugs lose again.

You got pinked.

Ouch. Wha' happen'?

RandomGuy

03-18-2009, 12:20 PM

DarkReign

03-18-2009, 12:48 PM

Outrage Game

Succinct. Thats exactly what it is for these politicians. A contest on who can look more appalled, but effectively do nothing.

clambake

03-18-2009, 02:02 PM

Lynch is a real douchebag. how do you jump on someone for contracts they didn't write?

MannyIsGod

03-18-2009, 02:14 PM

The more of that hearing I watched the more I hated some members of congress and the media and the more I like Edward Liddy.

DarrinS

03-18-2009, 02:17 PM

3I80qfMdraM

MannyIsGod

03-18-2009, 02:28 PM

Fucking congress wants to micromanage this? Seriously, the more I watch of this grandstanding the more I want to yell at these assholes.

MannyIsGod

03-18-2009, 02:32 PM

BTW the poster of that video (on youtube) is pretty funny. I don't think the Federal Reserve's involvement in bailing out AIG was exactly unknown.

MannyIsGod

03-18-2009, 04:09 PM

The congressperson that removed the restrictions from that bill is going to be under huge fire when they find out who it was.

Yonivore

03-18-2009, 05:38 PM

The congressperson that removed the restrictions from that bill is going to be under huge fire when they find out who it was.
It was a Democrat bill...they're all in it up to their wallets.

Crookshanks

03-18-2009, 05:47 PM

The congressperson that removed the restrictions from that bill is going to be under huge fire when they find out who it was.

Uh - that would be Chris Dodd - the biggest receipient of contributions from AIG executives!

Yonivore

03-18-2009, 05:49 PM

The more of that hearing I watched the more I hated some members of congress and the media and the more I like Edward Liddy.
Liddy took the job for a dollar a year, last September.

The Retention Contracts -- put in place to keep key people working on a sinking ship and known about by the Fed and Congress and the administration a lot longer ago than last week -- were executed long before Liddy.

AIG is headquartered in Connecticut. If they break the contracts, the employees can sue and, if they win, can recover twice the amount the contracts promised plus court and attorney's fees. That $330 million plus costs.

165 Million is 9/100 of 1% of the total amount of bailout funds given to AIG.

Fannie Mae and Freddie Mac who have received comparable amounts of our money are also handing out bonuses. Where's the outrage? I guess Barney Franks can't afford a lover's spat right now.

All the bluster about passing a specific law to claw back the bonuses from AIG executives violates at least two Constitutional provisions;

Article 1 Section 9 says, in pertinent part, "No Bill of Attainder or ex post facto Law shall be passed."

Article 1 Section 10 says, in pertinent part, "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

The lefties on this board harped about how President Bush was trashing the constitution when discussing issues where there was considerable disagreement over whether or not he had even broken the law, much less violated any constitutional tenets. How do you guys feel about this blatant display of willingness to abandon the constitution?

Yonivore

03-18-2009, 05:49 PM

Uh - that would be Chris Dodd - the biggest receipient of contributions from AIG executives!
I thought he was second to Obama.

MannyIsGod

03-18-2009, 05:57 PM

Uh - that would be Chris Dodd - the biggest receipient of contributions from AIG executives!

Try again - Chris Dodd is in the senate.

MannyIsGod

03-18-2009, 05:59 PM

Liddy took the job for a dollar a year, last September.

The Retention Contracts -- put in place to keep key people working on a sinking ship and known about by the Fed and Congress and the administration a lot longer ago than last week -- were executed long before Liddy.

AIG is headquartered in Connecticut. If they break the contracts, the employees can sue and, if they win, can recover twice the amount the contracts promised plus court and attorney's fees. That $330 million plus costs.

165 Million is 9/100 of 1% of the total amount of bailout funds given to AIG.

Fannie Mae and Freddie Mac who have received comparable amounts of our money are also handing out bonuses. Where's the outrage? I guess Barney Franks can't afford a lover's spat right now.

All the bluster about passing a specific law to claw back the bonuses from AIG executives violates at least two Constitutional provisions;

Article 1 Section 9 says, in pertinent part, "No Bill of Attainder or ex post facto Law shall be passed."

Article 1 Section 10 says, in pertinent part, "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

The lefties on this board harped about how President Bush was trashing the constitution when discussing issues where there was considerable disagreement over whether or not he had even broken the law, much less violated any constitutional tenets. How do you guys feel about this blatant display of willingness to abandon the constitution?

I think I've made it quite clear about how I feel on this subject, but lets also make one thing clear. Bush took actions which violated the Constitution so lets not compare mere bluster with actual action.

Yonivore

03-18-2009, 06:00 PM

Try again - Chris Dodd is in the senate.
That's what you get for passing and signing legislation into law without reading it.

Didn't President Teleprompter call it the "Dodd Amendment?" Dodd's protestations (from under the bus) notwithstanding?

Crookshanks

03-18-2009, 06:08 PM

Try again - Chris Dodd is in the senate.

How about YOU try again Manny!

BREAKING: I was responsible for bonus loophole, says Dodd

Posted: 05:56 PM ET

WASHINGTON (CNN) — Senate Banking committee Chairman Christopher Dodd told CNN’s Dana Bash and Wolf Blitzer Wednesday that he was responsible for adding the bonus loophole into the stimulus package that permitted AIG and other companies that received bailout funds to pay bonuses.

Watch: I'm responsible for bonus loophole, Dodd says

On Tuesday, Dodd denied to CNN that he had anything to do with the adding of that provision.

clambake

03-18-2009, 06:11 PM

that bastard.

Crookshanks

03-18-2009, 06:12 PM

I thought he was second to Obama.

Obama was second - but not by much! I posted the amounts earlier in this thread.

Yonivore

03-18-2009, 06:14 PM

Obama was second - but not by much! I posted the amounts earlier in this thread.
Cool

Yonivore

03-18-2009, 06:15 PM

Try again - Chris Dodd is in the senate.
Try again, both houses had a hand in making this sausage that no one ever read.

I can't wait to see what else is going to pop up in the days, weeks, months, and years to come.

Yonivore

03-18-2009, 06:22 PM

One othe thing. It was passed by Democrats...all of them.

MannyIsGod

03-18-2009, 06:22 PM

Yonivore

03-18-2009, 06:32 PM

That is not what I was referring to at all. There was a republican congresswoman from Maine who had some of her language removed with restrictions. In any event, Dodd's changes look awful. Obama's outrage comments seem even more ridiculous now if they had a hand in this.
That's because he's a fucking liar...and they're catching up with him. I suspect his approval ratings are headed South, and fast.

MannyIsGod

03-18-2009, 06:40 PM

One othe thing. It was passed by Democrats...all of them.

By the entire Senate actually. Unanimously. That means your precious GOP senators were in on this too.

RandomGuy

03-19-2009, 09:24 AM

All the bluster about passing a specific law to claw back the bonuses from AIG executives violates at least two Constitutional provisions;

Article 1 Section 9 says, in pertinent part, "No Bill of Attainder or ex post facto Law shall be passed."

Article 1 Section 10 says, in pertinent part, "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

The lefties on this board harped about how President Bush was trashing the constitution when discussing issues where there was considerable disagreement over whether or not he had even broken the law, much less violated any constitutional tenets. How do you guys feel about this blatant display of willingness to abandon the constitution?

oooh Legal FAIL.

Nice. We don't get to see that too often. I wonder what right wing media talking point you're parroting here, or if you thought of that dumb shit by yourself.

1) Those constitutional clauses deal with making something criminal or treasonous, after the act has taken place.

Taxing the snot out of it, does not make the receipt of those bonuses criminal,

you

dumb

ass.

2) Taxing the snot out of it, does not impair the "Obligation of Contracts"

I was going to put a lmao smiley here, but on second thought it isn't funny. You suck and that's sad. :depressed

If the proposed a law specifically interfered in the contracts, you might have a point. Show me that it does, and I will retract this and apologize. If you can't do that, you're a dumb ass.

The other thing is that as owners, the government has a right to, WITHOUT PASSING LAWS, require that the contracts be renegotiated. Renegotiating contracts happens all the time.

In this case, as I have pointed out before, if I were to have received one of these bonuses, given the outright death threats floating around out there over them, I would be falling all over myself to give it back before my name went public.

I doubt that there would be ANY lawsuits from the recipients over this forced renegotiation. There might have been the potential, but not now.

RandomGuy

03-19-2009, 09:32 AM

Liddy took the job for a dollar a year, last September.

The Retention Contracts -- put in place to keep key people working on a sinking ship and known about by the Fed and Congress and the administration a lot longer ago than last week -- were executed long before Liddy.

AIG is headquartered in Connecticut. If they break the contracts, the employees can sue and, if they win, can recover twice the amount the contracts promised plus court and attorney's fees. That $330 million plus costs.

165 Million is 9/100 of 1% of the total amount of bailout funds given to AIG.

Fannie Mae and Freddie Mac who have received comparable amounts of our money are also handing out bonuses. Where's the outrage? I guess Barney Franks can't afford a lover's spat right now.

Liddy seems to be doing a good job winding it down.

I think there will be some outrage over Fannie and Freddie, but the people who really steered AIG, Fannie, and Freddie, into the toilet are probably gone already and the scale of the bonuses is much less than the milliion dollar+ stuff.

You are also right to wonder if Frank might hold off criticism of those two institutions because of romantic entanglements. I would wonder however, if Franks actually did criticise/investigate whether you would actually give him credit for that.

The first part of this post is great, and I astonishingly agree with a good chunk of it.

Yonivore

03-19-2009, 09:48 AM

oooh Legal FAIL.

Nice. We don't get to see that too often. I wonder what right wing media talking point you're parroting here, or if you thought of that dumb shit by yourself.

1) Those constitutional clauses deal with making something criminal or treasonous, after the act has taken place.

Taxing the snot out of it, does not make the receipt of those bonuses criminal,

you

dumb

ass.

2) Taxing the snot out of it, does not impair the "Obligation of Contracts"

I was going to put a lmao smiley here, but on second thought it isn't funny. You suck and that's sad. :depressed

If the proposed a law specifically interfered in the contracts, you might have a point. Show me that it does, and I will retract this and apologize. If you can't do that, you're a dumb ass.

The other thing is that as owners, the government has a right to, WITHOUT PASSING LAWS, require that the contracts be renegotiated. Renegotiating contracts happens all the time.

In this case, as I have pointed out before, if I were to have received one of these bonuses, given the outright death threats floating around out there over them, I would be falling all over myself to give it back before my name went public.

I doubt that there would be ANY lawsuits from the recipients over this forced renegotiation. There might have been the potential, but not now.
Where'd you get the idea that Article I, Section 9 limitations on Congress applied only to criminal activity? Just a couple of clauses down it says, "No tax or duty shall be laid on articles exported from any state."

How is that related to treason or criminal activity?

Article I, Section 9 deals with the limitations under which Congress can execute its Article I powers. If there are laws, in place, that contemplate or define the tax burden due by the recipients of those bonuses then, making new law to treat them differently is the very definition of ex-post facto law making.

If you do it from a fake sense of outrage over an issue you created to begin with...it's still ex-post facto law making...just rancidly political.

As far as renegotiating contracts, you're right. But, if both parties can't reach agreement, then you're left with either honoring the existing contracts or reneging and getting sued.

And, as I understand it, most of the executives have already been terrorized into relinquishing their bonuses. But, had they known what would have happened, they could just as easily have been employed elsewhere, making just as much money without the hassle. AIG would have failed without the expertise the retention bonuses were meant to retain and I guess we would have all seen what would have happened if AIG failed.

Too bad.

RandomGuy

03-19-2009, 10:07 AM

Where'd you get the idea that Article I, Section 9 limitations on Congress applied only to criminal activity? Just a couple of clauses down it says, "No tax or duty shall be laid on articles exported from any state."

How is that related to treason or criminal activity?

Article I, Section 9 deals with the limitations under which Congress can execute its Article I powers. If there are laws, in place, that contemplate or define the tax burden due by the recipients of those bonuses then, making new law to treat them differently is the very definition of ex-post facto law making.

If you do it from a fake sense of outrage over an issue you created to begin with...it's still ex-post facto law making...just rancidly political..

Keep it up and Jerry Louis will start starring in your FAILATHON.

The way you are putting this out there convinces me that you are merely parroting something you read somewhere and didn't think of it yourself.

1) Please name the "article" exported from "any state" for a retention bonus.

2) Tax law in the US routinely treats different things with different taxing approaches. That particular legal precedent is well-established, tax-protestor nutjobs notwithstanding.

Lastly:

Ex post facto law, a law which operates by after enactment. The phrase is popularly applied to any law, civil or criminal, which is enacted with a retrospective effect, and with intention to produce that effect; but in its true application, as employed in American law, it relates only to crimes, and signifies a law which retroacts, by way of criminal punishment, upon that which was not a crime before its passage, or which raises the grade of an offense, or renders an act punishable in a more severe manner that it was when committed. Ex post facto laws are held to be contrary to the fundamental principles of a free government, and the States are prohibited from passing such laws by the Constitution of the United States. --Burrill. --Kent.

The law didn't make receiving the bonuses criminal.

Care to re-think your approach on this one? Hmmm?

TDMVPDPOY

03-19-2009, 10:16 AM

too big to fail = too big to exists

Yonivore

03-19-2009, 10:27 AM

Keep it up and Jerry Louis will start starring in your FAILATHON.

The way you are putting this out there convinces me that you are merely parroting something you read somewhere and didn't think of it yourself.

1) Please name the "article" exported from "any state" for a retention bonus.

2) Tax law in the US routinely treats different things with different taxing approaches. That particular legal precedent is well-established, tax-protestor nutjobs notwithstanding.

Lastly:

The law didn't make receiving the bonuses criminal.
No, but the rhetoric sure is designed to make it appear criminal.

Care to re-think your approach on this one? Hmmm?
Well, that just sucks, doesn't it? Maybe this will cause the courts to revisit Calder v. Bull?

And, it's Jerry LEWIS, you twit.

RandomGuy

03-19-2009, 10:48 AM

No, but the rhetoric sure is designed to make it appear criminal.

Well, that just sucks, doesn't it? Maybe this will cause the courts to revisit Calder v. Bull?

And, it's Jerry LEWIS, you twit.

:lol Indeed that is his stage name, not Louis. My bad.

You will have to pardon my lack of knowledge about movies stars whose last real hit movie was probably about the time I entered kindergarden in the mid-seventies.

For the rest of it:

I guess that is as close as you ever get to admitting you were wrong.

'Sokay, we understand.

Not everybody has the intellectual courage/honesty to admit when they are wrong.

I looked over that after typing it, and man was that a liberal statement. I didn't fault you for being yourself.

Were I a conservative, I would say that you lacked the sense of personal responsibility to owe up to your mistake.

Aren't you glad I'm not a conservative? :p:

Yonivore

03-19-2009, 10:54 AM

:lol Indeed that is his stage name, not Louis. My bad.

You will have to pardon my lack of knowledge about movies stars whose last real hit movie was probably about the time I entered kindergarden in the mid-seventies.

For the rest of it:

I guess that is as close as you ever get to admitting you were wrong.

'Sokay, we understand.

Not everybody has the intellectual courage/honesty to admit when they are wrong.

I looked over that after typing it, and man was that a liberal statement. I didn't fault you for being yourself.

Were I a conservative, I would say that you lacked the sense of personal responsibility to owe up to your mistake.

Aren't you glad I'm not a conservative? :p:
And, I would say you lack the intellectual capacity to understand an admission that doesn't explicitly include the words "I was wrong."

And, contrary to popular belief, I've been wrong before and admitted it.

So, tell me, do you think it's right to change the law, retroactively, after decisions are made and contracts are executed based on existing law? Doesn't that undermine all contractual obligations?

Winehole23

03-19-2009, 11:07 AM

So, tell me, do you think it's right to change the law, retroactively, after decisions are made and contracts are executed based on existing law? Doesn't that undermine all contractual obligations?It would, but that's all speculative. We already know the USG will use the forthcoming $30 billion loan to AIG as leverage to negotiate.

My point is this: so long as the USG does not continue to neglect its own advantages, the political end (clawback on bonuses) can mostly be accomplished through renegotiation. Didn't we force the auto companies to to renegotiate labor contracts not too long ago? Why not AIG?

Yonivore

03-19-2009, 11:13 AM

It would, but that's all speculative. We already know the USG will use the forthcoming $30 billion loan to AIG as leverage to negotiate.

My point is this: so long as the USG does not continue to neglect its own advantages, the political end (clawback on bonuses) can mostly be accomplished through renegotiation. Didn't we force the auto companies to to renegotiate labor contracts not too long ago? Why not AIG?
And that takes me back to my original point of we should have never bailed any of them out.

They should either have restructured, under existing bankruptcy law, or liquidated and had their assets bought up and exploited by others in the market.

Government has no business being in business.

coyotes_geek

03-19-2009, 11:28 AM

It would, but that's all speculative. We already know the USG will use the forthcoming $30 billion loan to AIG as leverage to negotiate.

"We can't let you die, but if you don't do what we want we'll deny you the money you need to survive."

Winehole23

03-19-2009, 11:30 AM

"We can't let you die, but if you don't do what we want we'll deny you the money you need to survive." Well, it's worth a try isn't it?

clambake

03-19-2009, 11:31 AM

"We can't let you die, but if you don't do what we want we'll deny you the money you need to survive."

as it should be.

Winehole23

03-19-2009, 11:41 AM

And that takes me back to my original point of we should have never bailed any of them out.

They should either have restructured, under existing bankruptcy law, or liquidated and had their assets bought up and exploited by others in the market.

Government has no business being in business.In principle I think you're right, but I'm suitably convinced that in practice the *orderly* route of bankruptcy and reorganization (for AIG) would've triggered a cascade of bank failures and a financial panic geometrically worse than the one we're in right now. I'm frankly conflicted about whether, economically speaking, long term, it will have been wise to put off the day of reckoning, but the political calculation in retrospect is easy enough to understand.

If AIG had been allowed to bite the dust the ensuing crisis might've killed capitalism as we know it. It might still have. Hence, my own very conflicted feelings about the bailout. Everything about it is wrong, except that maybe it kept the sky from falling for a little while.

RandomGuy

03-19-2009, 11:45 AM

And, I would say you lack the intellectual capacity to understand an admission that doesn't explicitly include the words "I was wrong."

And, contrary to popular belief, I've been wrong before and admitted it.

So, tell me, do you think it's right to change the law, retroactively, after decisions are made and contracts are executed based on existing law? Doesn't that undermine all contractual obligations?

mmm tasty pluperfect tense.

Were you to have said that I lack the intellectual capacity to understand an implict admission, you would be wrong. I do undestand that you rhetorically backed off that unconstitutional claim.

If you have admitted you were wrong, then good for you, and I will take you at your word for that. Kudos.

That said:

Tax laws, like many are changed all the time in reaction to events and/or public policy goals. Whether or not any decision is right about how the law is changed depends on the situation.

Do I think it is right or ethical to claw them back coercively?

No. Although ultimately I do sympathize with the sentiment underlying the action and feel it certainly is wrong that those responsible should make so much money simply for being there.

The executives receiving the bonuses presumedly did not have a part in the decision. You can't blame them for someone else's dumb business decision.

That said, I do think the executives do have something of a weak moral obligation to return the bonuses. This should remain a moral and voluntary obligation, though.

This doesn't undermine all contractual obligations any more than regular estoppel does. (estoppel = court nullification of a contract if enforcing the contract or portions of a contract is unconscionable)

I don't buy the argument that it somehow undermines ALL contract law, no. It might make people think twice about accepting federal bailout money, and that isn't exactly a bad thing.

If you can tell me exactly how this might undermine contract law, with say, a specific feasible example, I might be persuaded to change my mind about that, but my gut says this is simply political noise meant to paint the left as somehow "socialistic destroyers of contracts".

Yonivore

03-19-2009, 11:47 AM

In principle I think you're right, but I'm suitably convinced that in practice the *orderly* route of bankruptcy and reorganization would've triggered a cascade of bank failures and a financial panic geometrically worse than the one we're in right now. I'm frankly conflicted about whether, economically speaking, long term, it will have been wise to put off the day of reckoning, but the political calculation in retrospect is easy enough to understand.

If AIG had been allowed to bite the dust the ensuing crisis might've killed capitalism as we know it. It might still have. Hence, my own very conflicted feelings about the bailout. Everything about it is wrong, except that maybe it kept the sky from falling for a little while.
I think we'll just have to disagree on what would have happened, we'll never know now; and, besides, that's water under the bridge now. But, I think Congress micromanaging and fomenting outrage is just worsening the problem. Particularly when, from my perspective, they're only doing it to deflect blame and skirt their own complicity in the problem.

If they were dead set on bailing these companies out, they should have put a bit more thought into the plan. Hell, Shut down the markets until you have it written if you have to.

But throwing a trillion dollars out there and then saying, OH SHIT! You can't do that, you must do this -- well after the barn is empty -- is a bit ridiculous.

RandomGuy

03-19-2009, 11:54 AM

In principle I think you're right, but I'm suitably convinced that in practice the *orderly* route of bankruptcy and reorganization would've triggered a cascade of bank failures and a financial panic geometrically worse than the one we're in right now. I'm frankly conflicted about whether, economically speaking, long term, it will have been wise to put off the day of reckoning, but the political calculation in retrospect is easy enough to understand.

If AIG had been allowed to bite the dust the ensuing crisis might've killed capitalism as we know it. It might still have. Hence, my own very conflicted feelings about the bailout. Everything about it is wrong, except that maybe it kept the sky from falling for a little while.

I agree. This would have been anything but "orderly".

People who think that bankruptcy and "market mechanisms" would have done this better need to stand in front of a padlocked fire door in a crowded nightclub yelling "fire" for a minute or two, and see how a true "free-market" rush for the exits works.

Does ANYBODY here think that a massive, panicked sell-off of assets wouldn't be more ultimately destructive than winding them down and bailing them out?

Those who say that any bailout is bad, are implying that they think panicked, irrational sell-offs are the right way to go. That isn't a strawman distortion, that is simply the logical end to that line of reasoning, because we all know exactly what would have happened.

Banks are too inter-linked for it not to have.

Yonivore

03-19-2009, 11:54 AM

I don't buy the argument that it somehow undermines ALL contract law, no. It might make people think twice about accepting federal bailout money, and that isn't exactly a bad thing.

If you can tell me exactly how this might undermine contract law, with say, a specific feasible example, I might be persuaded to change my mind about that, but my gut says this is simply political noise meant to paint the left as somehow "socialistic destroyers of contracts".
Well, seeing as how these retention bonuses were contracted prior to any bail out being given or even contemplated, I'd say it not only makes one think twice about accepting bail out money but, it might make one think twice about agreeing to stay on -- on the promise of a retention bonus -- if a failing company is likely to receive bailout money in the future and thus, jeopardize their reason for staying at all.

If I had been an executive offered one of the bonuses and known that they could be nullified by Congressional action or worse, witness Congress fomenting a murderous rage against me and my family, in the future...I'd of found work elsewhere and AIG would have been toast.

Winehole23

03-19-2009, 11:55 AM

If they were dead set on bailing these companies out, they should have put a bit more thought into the plan. Hell, Shut down the markets until you have it written if you have to.Bank holiday? Yonivore gets Rooseveltian?

But throwing a trillion dollars out there and then saying, OH SHIT! You can't do that, you must do this -- well after the barn is empty -- is a bit ridiculous.It is. It's even more embarrassing that the Obama administration needs the political cover of bogus populism to get *tougher* with AIG. If only there were some analogous outrage about the banks...

coyotes_geek

03-19-2009, 11:56 AM

Well, it's worth a try isn't it?

Depends how good a poker face we've got.

RandomGuy

03-19-2009, 11:58 AM

I think we'll just have to disagree on what would have happened, we'll never know now; and, besides, that's water under the bridge now. But, I think Congress micromanaging and fomenting outrage is just worsening the problem. Particularly when, from my perspective, they're only doing it to deflect blame and skirt their own complicity in the problem.

If they were dead set on bailing these companies out, they should have put a bit more thought into the plan. Hell, Shut down the markets until you have it written if you have to.

But throwing a trillion dollars out there and then saying, OH SHIT! You can't do that, you must do this -- well after the barn is empty -- is a bit ridiculous.

I agree somewhat.

The problem with really doing it "right" is that the time it would have taken to get the perfect plan down was greater than the time it would have taken for a complete collapse.

"shutting down" the markets is not really an option that is feasible in any way. Too much money/pressure for that not to happen.

In business, as in war, having a bad plan at the right time, is often better than no plan at all, hesitating, and getting swept away by events.

RandomGuy

03-19-2009, 12:04 PM

Well, seeing as how these retention bonuses were contracted prior to any bail out being given or even contemplated, I'd say it not only makes one think twice about accepting bail out money but, it might make one think twice about agreeing to stay on -- on the promise of a retention bonus -- if a failing company is likely to receive bailout money in the future and thus, jeopardize their reason for staying at all.

If I had been an executive offered one of the bonuses and known that they could be nullified by Congressional action or worse, witness Congress fomenting a murderous rage against me and my family, in the future...I'd of found work elsewhere and AIG would have been toast.

All of the executives responsible for writing the CDS's and making the shitty, risky decisions, are gone already. It was part of Liddy's testimony, by the way.

I doubt many of them will want to list that particular job on their resume's. :lol

Quite frankly, if I were a firm that had to take that bailout money because some talented idiot fucked my company, I would probably fire them anyways, and find someone who didn't fuck up.

That kind of knowledge of finance isn't *that* rare. Hell, maybe I should start applying to the companies winding this shit down and firing the idiots responsible. Gimmie a bonus... :greedy

Winehole23

03-19-2009, 12:28 PM

http://www.scribd.com/doc/13112282/AIG-Risk-Bankruptcy-Report

Winehole23

03-19-2009, 12:39 PM

The GAO reports (http://www.mcclatchydc.com/251/story/64311.html) that AIG's ability to pay back the $170 billion loaned to it so far is "deteriorating."

Yonivore

03-19-2009, 01:27 PM

All of the executives responsible for writing the CDS's and making the shitty, risky decisions, are gone already. It was part of Liddy's testimony, by the way.

I doubt many of them will want to list that particular job on their resume's. :lol

Quite frankly, if I were a firm that had to take that bailout money because some talented idiot fucked my company, I would probably fire them anyways, and find someone who didn't fuck up.

That kind of knowledge of finance isn't *that* rare. Hell, maybe I should start applying to the companies winding this shit down and firing the idiots responsible. Gimmie a bonus... :greedy
You didn't respond to the point that the executives getting bonuses were hired and promised the bonuses pre-bailout and how that might affect your assertion that they might think twice before accepting bailout money.

coyotes_geek

03-19-2009, 01:30 PM

The GAO reports (http://www.mcclatchydc.com/251/story/64311.html) that AIG's ability to pay back the $170 billion loaned to it so far is "deteriorating."

I'm guessing not too many people are going to be surprised by this.

Yonivore

03-19-2009, 01:32 PM

Should have just let them go down the toilet...there is no way government can dig this out any better than the market.

Crookshanks

03-19-2009, 03:09 PM

I really can't believe some of you think what Congress is doing to AIG is okay. The gov't put Liddy in charge and the gov't orchestrated the bail out - bonuses and all. Then Dodd put in the amendment to protect those bonuses that everyone is now screaming about. Maybe if they'd taken the time to READ the stimulus bill before ramming it through, they would've known what was in there!

Are you really okay with Congress targeting a small group of private citizens and seeking to punish them through excessive taxation? And in the process, they are inciting the mobs and putting these PRIVATE citizens at risk. This is insanity and very scary!

RandomGuy

03-19-2009, 03:15 PM

You didn't respond to the point that the executives getting bonuses were hired and promised the bonuses pre-bailout and how that might affect your assertion that they might think twice before accepting bailout money.

??

Um, not sure what you want here.

They were promised this before the company went down the tubes. That is a very valid point, and it kind of mitigates a lot of the criticism of the current administration's handling of the bonuses. They were stinky and repugnant, but pre-existing conditions so to speak.

The assertion about banks not wanting to accept bailout money because of the publicity their execs' pay package might cause would be unaffected.

Personally I think CEO's in this country are vastly overpaid at the expense of shareholders.

There was one economist who studied returns of companies and found that it actually varied inversely with executive pay packages, i.e. the more they got paid over the average worker at the company, the worse the performance. Not sure how valid that linkage is, as I can think of a few factors that might affect that, but it wouldn't surprise me if it turned out to be the case.

Winehole23

03-19-2009, 03:16 PM

I'm guessing not too many people are going to be surprised by this.Among those who've be tracking the story? No.

I'm surprised by how many people don't know anything about AIG or are just now getting acquainted.

(*Hauteur (http://www.merriam-webster.com/dictionary/hauteur)* of the record store clerk) --

"Still listening to THAT, I see."

Winehole23

03-19-2009, 03:25 PM

The assertion about banks not wanting to accept bailout money because of the publicity their execs' pay package might cause would be unaffected.In the same ballpark: a few banks loudly insist they want to return TARP funds (http://money.aol.com/news/articles/_a/bbdp/some-banks-seek-to-return-tarp-funds/378800). Some said the money tainted their banks as troubled; others that they only accepted the money in the first place at the behest of Treasury.

RandomGuy

03-19-2009, 03:44 PM

Should have just let them go down the toilet...there is no way government can dig this out any better than the market.

(padlocks fire escape door in crowded night club)
(hands Yonivore a megaphone, centers him squarely infront of the doors, and moves away)

It's all yours. Shout "fire" when you are ready.

(END REFERENCE TO PREVIOUS POST)

So how exactly would "the market" handle the problem?

What is your market-based solution, and why would that work better than what is being done?

Honestly, I am dubious, but if it works, fuck it, I'm all for just about anything at this point.

Viva Las Espuelas

03-19-2009, 03:59 PM

whoopsie..........

also, is it me or does geithner favor beavis? besides the hair color.
----------------------------------------------------------------------

Geithner: Treasury pushed for bonus loophole (http://politicalticker.blogs.cnn.com/2009/03/19/geithner-treasury-pushed-for-bonus-loophole/)
Posted: 04:25 PM ET
http://i2.cdn.turner.com/cnn/2009/images/03/19/art.geithner1.gi.jpg Treasury Secretary Timothy Geithner told CNN Thursday his department asked Sen. Chris Dodd to include a loophole in the stimulus bill allowing bonuses to be paid.

http://i.l.cnn.net/cnn/.element/img/2.0/mosaic/base_skins/baseplate/corner_wire_BL.gif

(CNN) — Treasury Secretary Timothy Geithner told CNN Thursday his department asked Sen. Chris Dodd to include a loophole in the stimulus bill that allowed bailed-out insurance giant American International Group to keep its bonuses.
In an interview with CNN's Ali Velshi, Geithner said the Treasury Department was particularly concerned the government would face lawsuits if bonus contracts were breached.
Dodd admitted to CNN Thursday he'd added the controversial provision after a Treasury official pushed for it. Earlier in the week, Dodd had said he had not played any role in the addition of the loophole.
Geithner told Velshi Thursday he takes full responsibility for the situation