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-- Tax-payer funded AIG to give tens of millions in bonuses
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Originally posted by Groundhog Boy And if we taxed AIG, we'd just be taxing ourselves.

let's say AIG didn't have losses, taxing would be an effective method of penalizing AIG because we would be collecting a percentage of the bonus payments without reducing any principal on the loans to AIG. Thus, the government would recoup the entire loan plus a percentage of the bonus. I envision a tax like that on golden parachutes.

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Originally posted by Lebezniatnikov GOP Senator Grassley On AIG Execs: "Resign, or go commit suicide." So tactful.

what a moron. fuck that guy

quote:

Originally posted by Alex Really?

Oh yes indeed-y.

http://www.weeklystandard.com/weblo..._seppuku_ti.asp

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Originally posted by Kinezi They are not outraged, Obama's Political capital gets eroded if he cant stop this bonus payment, he sees it like AIG CEO is showing him middle finger and wants to potrayit to world like that, but the fact remains that AIG is bound by contractual agreement to disperse the bonus to performing employees. Unless they amend the contract and re-write it again there is nothing that the CEO can do. Obama/media is making a scapegoat out of CEO.

Obama is giving the new CEO a free pass telling the media to be sure to understand he's doing a great job and this isn't his doing (he's a big democrat party contributer) and demonizing the one who put the contracts in place. This administration could have stopped the bonuses by simply stopping the bailout. They could have forced AIG into bankruptcy, which would have voided the company's contractual compensation obligations. Instead, the Obama administration chose to inject liquidity into AIG (as did the Bush administration at the end of 2008). That kept AIG's doors open, and therefore kept its contractual obligations to its employees intact.


It's crazy... I'm reading now about how the peasants with pitch forks are surrounding AIG and how they are getting death threats and shit. These contracts were reported IN FULL over a year ago. There is no surprise and they knew it was coming. It's populist nonsense and a dangerous distraction the administration is facilitating here... I think they ran out of capital on the Rush thing and they need a new outrage to fire up the sheep, and this was perfect timing.


*sigh*.... if a failing business is just given free money with no strings attached, you can expect them to continue to operate the way the were. If we want to avoid having taxpayer dollars go to Wall Street bonuses we should not be bailing out private companies with taxpayer dollars.

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Originally posted by jerZ07002 I've never been one to advocate PC, but to me that comment also seemed pretty offensive to Japanese people.

And also offensive to regular "alive" people. And maybe offensive to robots too!

How interesting is this:

Two Weeks Ago: White House Says It's Confident It Knows What Happened to Previous AIG Billions

quote:

From White House press secretary Robert Gibbs' briefing two weeks ago, when $30 billion in additional funds were announced for AIG. AIG had at this point designated $165 million in retention bonuses for officers of the Financial Products subsidiary, as well as an additional $121.5 million in executive bonuses. TAPPER: AIG, is the administration confident that it, that it knows what happened to the tens of billions of dollars previously given to AIG? GIBBS: Is it confident -- I'm sorry? TAPPER: That they know -- that you guys know what happened to the previous billions before you hand over this next $30 billion. GIBBS: Yes -- yes, the -- I mean, I don't think it's a -- well, obviously, you've got a huge insurance company that is losing money, not the least of which because of its sheer size and sheer size and decrease in the growth in our economy. It experiences a far bigger drop, largely because of its size. But, again, the steps that -- that Treasury and -- and others took were to ensure a larger systemic problem wasn't one that we had to deal with here today in letting something just die. TAPPER: But in terms of specifically the -- I guess it's like $150 billion before, you guys are confident... GIBBS: Yes.

http://blogs.abcnews.com/politicalp...eeks-ago-w.html

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Originally posted by The17sss .........They could have forced AIG into bankruptcy, which would have voided the company's contractual compensation obligations. ..........

which would have caused billions of dollars in losses to banks and states, which would have been an absolute financial nightmare. avoiding bankruptcy was absolutely necessary. fuck the bonuses, the government did what it had to do. undeserved bonuses to a group of idiots shouldn't prevent the government from saving the country (and potentially the world) from a potential economic depression. some people are real idiots!!!

moral of the story, if it's too big to fail it's simply too big. i've said it before, but it's really the lesson we need to take from all of this.

quote:

moral of the story, if it's too big to fail it's simply too big. i've said it before, but it's really the lesson we need to take from all of this.

I'm surprised that some of these "too big to fail" companies haven't been cut down to size like the old Standard Oil saga's of the late 1800's and 1900's where regulators kept going after them in anti-trust challenges. I guess it's a slightly different scenario since none of these banks or financial institutions have a monopoly on anything.

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Originally posted by pmoisse I'm surprised that some of these "too big to fail" companies haven't been cut down to size like the old Standard Oil saga's of the late 1800's and 1900's where regulators kept going after them in anti-trust challenges. I guess it's a slightly different scenario since none of these banks or financial institutions have a monopoly on anything.

I'm not sure about the standard for anti-trust challenges, but the DOJ has the power to challenge any acquisition and the pressure alone from the DOJ may be enough to prevent an acquisition.

apparently, in the case of AIG, it was the only company really doing credit default swaps. The problem is, however, being the only player probably isn't enough because that isn't anti-competitive.

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Originally posted by jerZ07002 I'm not sure about the standard for anti-trust challenges, but the DOJ has the power to challenge any acquisition and the pressure alone from the DOJ may be enough to prevent an acquisition. apparently, in the case of AIG, it was the only company really doing credit default swaps. The problem is, however, being the only player probably isn't enough because that isn't anti-competitive.

Good points. I guess one could say that they cornered the market on shitty toxic assets that now have the square root of fuckall value.

Hmm, welp, there goes the "necessity for bonuses for retention purposes" bullshit argument for AIG:

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And get this: Though the payments were called "retention" bonuses, 11 of those 73 millionaires, including one who got $4.6 million, are no longer even at AIG. So if, as AIG has claimed, the bonuses were handed out for the purpose of holding on to talented employees, they often didn't succeed in doing so. http://tpmmuckraker.talkingpointsme...illion_each.php

Man did we get played.

I am a little confused by this ordeal, however. According to Rep. Frank:

quote:

And he reminded reporters that Congress had no control over the AIG bailout, which was conducted via the Federal Reserve rather than the legislation that set up the TARP program late last year. "Remember, the legislative authority for this is essentially the 1932 statute" that set the Fed's lending rules, Frank said. http://tpmdc.talkingpointsmemo.com/...-it.php?ref=fp5

He said this on Rachel Maddow's show last night, pointing to the legislation that was done last Fall under Bush's watch. That may be true, but does that mean that Congress could not in any way intervene when they had a few chances to do so and close the loophole? Or was this something that they simply had no power over since it was a Fed loophole? Anyone know?

I do think this is an interesting idea being pushed by Frank:

quote:

House Financial Services Committee Chairman Barney Frank (D-MA) just finished a press conference on AIG, where he divulged a new wrinkle in the ongoing push to recoup the company's lavish bonuses. The U.S. government apparently added "covenants" to its deal with AIG to cede some of its rights as the majority owner of the company, Frank said, adding in plain English: "It's time to act as the owner." http://tpmdc.talkingpointsmemo.com/...-it.php?ref=fp5

Since we own something like 80% of the the company, is there legal merit for Congress to stop the payments acting as an "owner" of the company? Thoughts?

Insurance companies losing billions of dollars - I cant comprehend that. They get insurance money for doing NOTHING (car insurance, for example), I always thought insurance companies would be very successful.
Can someone please explain an economic bum like me what the fuck is that about? Apart from this bullshit nonsense of bonuses - I recall bonuses are for achievements and success and meeting goals and such - I dont see what sort of success these bonuses should be paid out for.

quote:

While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly 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 seeking to tax. The amendment is in the final version and is law. Also, Sen. Dodd was AIG�s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.

http://www.foxbusiness.com/story/ma...cks-aig---time/

This is not news to them. They knew about this a year ago, they knew the amounts, and as the payout date is coming close, they spring up and act like they've been caught off guard by the evil corporation. They are faking outrage to ride a wave of popolist sentiment and portray themselves as saviors out to help "the little guy". How much money are we paying for people not to work and for people's mortgages who can't pay them? Billions and billions. Not to say $165 million isn't a lot, but to create a circus over that amount is nonsense. These are corrupt people who have their interests at heart, not ours. When oh when will people realize this? Fucking Dodd himself put a provision into the stimulus bill prohibiting bonuses from having restrictions for god's sake!!!!!!!

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Here is the loophole, from the section of the stimulus package that deals with compensation rules for TARP recipients: The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary. Frankly, it�s hard to imagine how the government could prevent such contracts from being honored. But the presence of this loophole, in black and white, certainly gives the lie to all of this phony outrage � by the senator who created the loophole, by the president who signed it into law, and by everyone else who voted for the stimulus package.

http://corner.nationalreview.com/po...zI3MmRlN2M1ZjA=

This is a mess... this government is spiriling out of control. Is this what you voted for? Is this government efficiency? This is what happens when an administration has a bunch of brainiacs who learned Ivy League liberal ideology, and believe they know how to run shit better than actual executives with real world experience running businesses.

I mean, we're just beating a dead horse.

From September 30 (subscription that I don't have) - http://online.wsj.com/article/SB122243652434678847.html

quote:

American International Group Inc. said Friday that it will give the government control of 80% of the company without seeking shareholder approval, saying the board's audit committee determined that the "delay" needed to get the approval "would seriously jeopardize the financial viability" of the company. AIG also said in a filing with the Securities & Exchange Commission that it is paying about 130 executives cash awards as part of a retention program for the giant insurer, which got the right to borrow up to $85 billion from the government last week in a deal to avert possible bankruptcy. AIG said ...

From last November - http://www.ft.com/cms/s/0/d2c5989e-...00779fd18c.html

quote:

AIG to pay retention bonuses to executives By Greg Farrell in New York Published: November 26 2008 23:41 | Last updated: November 26 2008 23:41 One day after announcing strict limits on salaries and bonuses for its top tier of executives, AIG revealed that some of those executives will receive millions in �retention bonuses� next year. In a regulatory filing on Wednesday, the insurance group disclosed that Jay Wintrob, an executive vice-president, had put off receiving the first instalment of his $3m retention bonus from December to April 2009. He will receive the second instalment, originally scheduled to be paid out in December 2009, in April 2010. David Herzog, AIG�s chief financial officer, also opted for the later payment schedule. The retention bonuses for 130 key executives were disclosed by AIG in September, after the US government rescued the firm from bankruptcy by purchasing 79.9 per cent of the company for $85bn. After the government takeover, Edward Liddy, the former Allstate chairman, was named chief executive and AIG offered retention bonuses to Mr Wintrob, head of AIG�s retirement services division, among others. In October, AIG�s management was embarrassed by the disclosure that the company spent $440,000 on a weekend retreat in California for senior performers. The company announced on Tuesday that Mr Liddy would be paid a salary of $1 for 2008 and 2009, and that Paula Rosput Reynolds, who joined AIG as chief restructuring officer in October, would receive no salary or bonus for 2008. The company said the other five members of AIG�s seven-member leadership group would not receive annual bonuses for 2008 or salary increases through 2009. AIG also said that the company�s senior partners, about 60 executives, would not earn long-term performance awards in 2008, not earn salary increases in 2009, and that the group�s annual bonuses would be limited. An AIG spokesman said on Wednesday that retention bonuses were different from the annual bonuses included in Tuesday�s statement. In September, Mr Liddy pledged to sell off significant portions of AIG�s international operations in order to pay back the government loan. The company said at the time that retention bonuses would be necessary to maintain continuity and value at various AIG units. �Retention bonuses are a better alternative for the repricing of option awards so long as they are reasonable, fully disclosed and truly needed to retain talent,� said Richard Ferlauto, director of corporate governance and pension investment at the American Federation of State, County and Municipal Employees union. �But in this market we don�t see much clamour for executives who made big bets, cannot make risk and were paid more than they are worth,� he added. Copyright The Financial Times Limited 2009

Also, I swear I read back in the fall that these "retention bonuses" didn't guarantee that these people would stay. As in specifically stated that point. They were aware that some of them would leave.

I mean, would you want to admit that you work for AIG anymore? You're like public enemy #1 even if you've done your job well just because of who you work for. Or better yet, if you didn't even work there when the problems were created but are just helping clean up the wreckage.

quote:

Originally posted by Magnetonium Insurance companies losing billions of dollars - I cant comprehend that. They get insurance money for doing NOTHING (car insurance, for example), I always thought insurance companies would be very successful. Can someone please explain an economic bum like me what the fuck is that about? Apart from this bullshit nonsense of bonuses - I recall bonuses are for achievements and success and meeting goals and such - I dont see what sort of success these bonuses should be paid out for.

AIG were in trouble because they had insured the 101 banks against the banks going under. when all the banks started to collapse people at AIG realised they too would be brought down. if AIG collapsed, this would have precipitated even more banking collapses, because those banks couldn't access the funds they were insured for at AIG.

here is a great doco on how everything went down (so to speak!)

http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

the blame is on the administration, both of them. fuckin incredible.

Since 17 seemingly can only post thoughts from blogs, I guess it's only appropriate to have an answer from one too:

quote:

The latest rumor revolves around a news story about VA Secretary Eric Shinseki "considering" a proposal to allow the VA to bill insurance companies for care received by service-connected disabled veterans. That story here... http://www.vawatchdog.org/09/nf09/n.../nf031109-1.htm The problem is that the story "has been misinterpreted and blown all out of proportion." As we know, the VA now bills insurance carriers for non-service-connected care if the veteran has insurance. If they don't, VA covers the care. And, currently, VA does not bill private carriers for service-connected care. (NOTE: Please don't write and tell me VA is billing your insurance company for service-connected care. We know that these mistakes can happen if procedures are coded incorrectly. These errors can be corrected by working with your local VA Billing Office.) So, now we have some pseudo-journalist who just read the first part of the above article and picked out the phrase "make veterans pay" and didn't read the rest of the article for a full explanation of VA's insurance billing policy. This person then went on to castigate Sec. Shinseki for even "considering" such a proposal. But, there's a problem with that. It's Shinseki's job to "consider" what is put on his desk. That's what they pay him to do. This proposal came from the Office of Management and Budget and is one of many proposals being "considered." And, it is unfair to criticize Shinseki for doing his job when we don't even know what his response to the proposal might be. Remember, it's under "consideration" and we'll hear from him if he makes a statement or when the 2010 VA budget is drafted. If we don't like his stance on the proposal, we can scream then, but have no right to at this time. It should also be noted that this would never pass Congress. This whole rumor thing gets worse. Leave it to some blogger to rant this into the ground by completely missing the concept and claiming that the government is going to force veterans to buy insurance to pay for their VA healthcare. Not so. Completely false. Bogus. You get the idea. It is really frustrating to see people put out false information... information that only confuses and scares veterans. It is really frustrating to see people put out false information... information that only confuses and scares veterans. Now, this nonsense has been put into email form and is going viral... so, if you haven't seen it yet, you will. Ignore it for what it is... trash. To remember: This is not Shinseki's idea. And, this comes from (according to a highly-placed official at a vets' service org) a bunch of 30-something budget wonks who have their heads stuck in their calculators and know little of the real world... but, they'll find out . http://www.dailykos.com/comments/20...11739/0745/8#c8

And according to these trusted blogger sources , word is this was actually a Republican proposal passed down to Shinseki. Gosh I love those internets!

Regardless, I'd be very surprised if Obama passed this on in any way, shape, or form. Considering we just came from an Administration that brought us this:

http://www.americablog.com/2007/02/shame.html

Not only do I think the fucking Republican hypocrisy is sick and shameful, but I really do hope we can continue to do better with treating our Vets.

quote:

Originally posted by MisterOpus1 And according to these trusted blogger sources , word is this was actually a Republican proposal passed down to Shinseki. Gosh I love those internets! Regardless, I'd be very surprised if Obama passed this on in any way, shape, or form. Considering we just came from an Administration that brought us this: Not only do I think the fucking Republican hypocrisy is sick and shameful, but I really do hope we can continue to do better with treating our Vets.

Haha... until that "word" becomes fact that it was a Republican proposal, don't spread the rumor. Shinseki is an Obama nomination; try your best to control your disdain for "republican hypocricy" with that in mind. And of course it won't pass, but the point is that, why would Obama even consider such a proposal? THAT is what's shameful.

Chris Dodd should be behind bars.

Analysis: White House, Dems backpedaling on AIG

http://finance.yahoo.com/news/Analy...f-14677357.html

quote:

Originally posted by Q5echo Chris Dodd should be behind bars.

... and not just for the sweetheart deal he got on his own house with Countrywide Mortgage. Dodd is personally responsible for the measure in the bill that allowed no limits on CEO bonuses for AIG... and now they want to pretend they didn't know about it and take them away. How the FUCK do these people get and stay elected?

But don't take my word for it... Shepard Smith unloads with some facts today:

quote:

Originally posted by Q5echo Chris Dodd should be behind bars.

I wish I had job security like that loser.

Chris Dodd: Ok, yes I was responisble for the AIG loophole but the Treasury asked me to do it.

http://www.huffingtonpost.com/2009/03/18/dodd-treasury-officials-i_n_176609.html

haha... even CNN is calling Dodd a liar now. He's been lying since yesterday (when he strongly denied he had anything to do with that provision) and now he's trying to pass the buck.

what a disgrace. However the way we let AIG throw 1000x the amount of the bonus packages out to save foriegn companies is even more a disgraceful

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