AIG paying millions of dollars in bonuses, will fix things later.

[Marginal]

This doesn't have anything to do with the efficiency of the private sector. When the government decided to subsidize their business practices, they removed the incentive for efficacy.

Any system is only as efficient as it needs to be. Unregulated business would not be more efficient.

 

[Bill Mattocks]

It gets deeper. Apparently, our good friends the French, the Germans, and the British have decided to siphon off a few billion of that latest round of bailout money we gave AIG:

http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52F29720090316

But they were 'entirely within their rights', you see.

Among European banks, SocGen was the biggest recipient at $11.9 billion, Deutsche Bank AG received $11.8 billion and the UK's Barclays Plc was paid $8.5 billion.
AIG, which has received federal bailouts totaling $173 billion, said on Sunday it had paid billions of dollars to a number of banks, partially in the form of collateral to back up credit default swaps, a form of financial insurance.

 

[cdunn]

It gets deeper. Apparently, our good friends the French, the Germans, and the British have decided to siphon off a few billion of that latest round of bailout money we gave AIG:

http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE52F29720090316

But they were 'entirely within their rights', you see.

It is ******** that what they insured was insurable, but the basic function of the American Insurance Group is to pay people for their losses when things go south. Problem is, their business model only works when not everyone goes south at oncew

 

[cdunn]

Bleh, it double posted.

 

[Bill Mattocks]

It is ******** that what they insured was insurable, but the basic function of the American Insurance Group is to pay people for their losses when things go south. Problem is, their business model only works when not everyone goes south at oncew

So, not only are we giving away our grandkids and greatgrandkids money, but we're exporting it people who hate our guts and tell us how awful we are on a daily basis?

Somebody explain that one to me. Because frankly, I think it sucks.

 

[cdunn]

Oh, it sucks, I fully agree.

However, if your house burns down, you're going to put in a claim to your homeowners, and they're contractually obligated to pay - it's why you pay them so much money every year. Same deal here. This is money that AIG is contractually obligated to pay to banks all over the place, because they got paid a boatload of money to do so, but less than the total amount that they were insuring plus their overhead. This is how insurance companies function. You expect that you will have x outlay per time unit, so you charge your customers enough that the total incoming per time unit is x + some profit. You can then jigger it around so people who are more likely to take more money pay more in, and so people less likely to take money pay less, but the principle is the same.

AIG is in the uncomfortable position where they were insuring most of San Francisco... and it's 1906. It can be argued that funding their insurance outlays is the most efficient way to put money in the sectors where it is most needed, but I think it just papers over the gigantic hole in the wall, without patching it.

 

[Phoenix44]

I hope you all called your Senators and Representatives today to let them know you're furious that the companies they're bailing out are using our money not only for CEO bonuses, but also to pay off FOREIGN BANKS.

I did. And tonight, I'm sending them my daughter's tuition bill. I figure since they don't give a damn what they're doing with my money, they may as well give a measly $50,000 to her college.

 

[zDom]

http://www.sfgate.com/cgi-bin/artic...4/national/w154601D88.DTL&type=business&tsp=1

 

[zDom]

We've long been told from various quarters that we were most threatened by the exploding and gas gouging A-rabs, or the inscrutable scheming Chinese hordes, or the spineless Europeeeens, or the nouveau Commie Russians. or sneaky Mexicans....... now, let's wake up. Nobody has done more damage to America in recent years - stealing, corrupting, offshoring, closing, squandering, mismanaging - than our very own (mostly white) upper class executives. They are killing us.... and they are making still more money doing so.

QFT, bolded by me.

 

[Bob Hubbard]

http://www.cnn.com/2009/POLITICS/03/16/AIG.bonuses/index.html

Obama tries to stop AIG bonuses: 'How do they justify this outrage?'

Because Mr. President, you, your VP, and your esteemed Secretary of State, as well as your former co-traitors in Congress let it happen, but rushing through a flawed bailout plan with no requirement for transparency, nor penalties for taking the money and crapping on us, or you. Good work sir, a testament of that which is to come I'm sure.

He noted in a written statement that executives at other companies that received bailout funds have volunteered to forgo bonuses. "There's no reason why those at AIG shouldn't do the same," he said.

Of course there is. They're under no obligation to restrict what they did with all that free cash you all gave them, despite what "We The People" wanted.

(New York Attorney General Andrew Cuomo) He said he had already asked for the names and titles of the people who are to receive the payments, "and it is surprising that you have yet to provide this information."
"Covering up the details of these payments breeds further cynicism and distrust in our already shaken financial system."
He added that he also is seeking "whatever contracts you now claim obligate you to make these payments" and the names of whoever negotiated them.

​

"Finally, we demand an immediate status report as to whether the payments under the retention plan have been made," he said.

Maybe those requirements and obligations should have been included as terms for accepting the money, ya think?

 

[Gordon Nore]

We've long been told from various quarters that we were most threatened by the exploding and gas gouging A-rabs, or the inscrutable scheming Chinese hordes, or the spineless Europeeeens, or the nouveau Commie Russians. or sneaky Mexicans....... now, let's wake up. Nobody has done more damage to America in recent years - stealing, corrupting, offshoring, closing, squandering, mismanaging - than our very own (mostly white) upper class executives. They are killing us.... and they are making still more money doing so.

I missed this the first time around, but seeing it quoted above, I wanted to call attention to this worthy argument. Whether or not they've done more damage, they've done a lot of damage. The entitled attitude about bonuses is completely out of whack with the reality of working people who entrust their funds and futures to these guys.

 

[Xue Sheng]

What’s Good, What’s Bad About the AIG Bailout - U.S.News

 

[Gordon Nore]

Notwithstanding the outrage over these retention bonuses and the threats against Liddy and the mostly unnamed recipients, I've noticed a change of tone amongst politicos of all stripes.

Last night on CNN I was listening to Ariana Huffington, Ben Stein, and two congresswomen (1 Dem, 1 Rep), all speaking basically the same language. Rather than pinning this situation on either Bush or Obama specifically as Presidents, they addressed broader problems in the financial sector and the US's ability to oversee it. Most interestingly, there was a very consistent tone of 'The American people effectively own AIG.'

That sentiment, I thought, was articulated in Committee hearings broadcast today. When the bank and auto bailout processes began, there was skittishness about interfering with the market. Now, many billions of dollars later, more people seemed to be saying, "We own the damn company. Straighten up and fly right."

 

[Flea]

This morning I heard that AIG now has armed guards patrolling their major headquarters. Seems they've gotten hundreds of threatening communications, including death threats. Not that I sanction behavior like that, but ... it's a little hard to sympathize too.

Bill, when I looked up your link on European banks taking their slice, two of the links at the bottom of the story were nothing short of poetic. "No Safe Haven for Artful Tax Dodgers" and a photo essay on a tent city in Sacramento. Shee... you can't script that sort of thing.

 

[Gordon Nore]

This morning I heard that AIG now has armed guards patrolling their major headquarters. Seems they've gotten hundreds of threatening communications, including death threats. Not that I sanction behavior like that, but ... it's a little hard to sympathize too.

Regardless of what language was in the bailout legislation or in the AIG contracts with their execs, the decision to go ahead with the retention bonuses was bound to yield a flurry of negative responses.

Bill, when I looked up your link on European banks taking their slice, two of the links at the bottom of the story were nothing short of poetic. "No Safe Haven for Artful Tax Dodgers" and a photo essay on a tent city in Sacramento. Shee... you can't script that sort of thing.

I caught something about this today to. They didn't have to pay anything to their European debtors; they simply could have put up collateral.

 

[Bill Mattocks]

http://www.pink-floyd-lyrics.com/html/not-now-john-final-lyrics.html

**Note: lyrics contain profanity - G Ketchmark / shesulsa, MT Assist. Administrator**