Wednesday, March 18, 2009
What's worse? the audacity of pretending he doesn't know what's going on or that sinking feeling in your stomach that just maybe he really doesn't.
Giving company a money to keep them afloat means that they will have to spend the money on their obligations - including foreign banks and bonuses. If this is what "they" didn't want, then "they" should have let them fail. It is called bankruptcy and perhaps restructuring. THAT is where contracts are re-negotiated.
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23 comments:
Is it like our Prez having a meltdown over ING and the bonuses's they, ING (by law and contract)had to distribute? If it is in there contract and is current law, (rather it is right or wrong), the Prez should have done his home work on the subject before he blew his top or signed the stimulus package .
Congress had their chance to re-write the by-laws of the buisnesses before they wrote the checks. It's not like you or I are gonna get any of it. They(congress and the prez)are just bringing this up to detract from the real issue.Again, smoke and mirrors.
Ric, the bonuses you are referring to were at AIG not ING. The 170 billion bailout for AIG began last year under the former President.
Because of the negative impact on world financial markets, everyone (including Bush) agreed letting AIG fail was not an option. If you have evidence that says otherwise I would like to see it.
OK ,I'll admit that I suck at acronyms! But my point remains the same!
NEW YORK -(Dow Jones)- New York Attorney General Andrew Cuomo said Tuesday that American International Group Inc. (AIG) granted retention bonuses of $1 million or more to 73 people in its AIG Financial Products subsidiary, including 11 who no longer work at the company.
In a letter to House Financial Services Committee Chairman Barney Frank on Tuesday, Cuomo said the top 10 bonus recipients combined received $42 million, with the top recipient getting more than $6.4 million.
Cuomo has blamed the unit for the insurer's near collapse last year. The attorney general said 11 people who have left the company received retention bonuses of $1 million or more, with one person getting $4.6 million.
"Again, these payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near failure of AIG," Cuomo said in the letter. "Thus, last week, AIG made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing taxpayer bailout. Something is deeply wrong with this outcome."
On Monday, Cuomo subpoenaed AIG seeking details on who received retention bonuses in the financial products unit and copies of the contracts underlying the bonuses. In his letter, Cuomo said AIG has refused to provide the names of those who received bonuses.
Over the weekend, news surfaced that AIG had paid $165 million in retention bonuses to individuals in the financial products unit on Friday.
The $165 million is the latest installment of a retention program that is slated to pay the unit's employees about $450 million. AIG had previously paid out $55 million, and an additional $230 million is pending for 2009.
The bonuses have sparked outrage on Capitol Hill and among taxpayers.
On Tuesday, the White House said it is looking into "all remedies" to recoup the bonuses after President Barack Obama denounced the payouts on Monday.
"This is a corporation that finds itself in financial distress due to recklessness and greed," Obama said Monday. "Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay."
Frank, D-Mass., told reporters in Washington on Tuesday that the U.S. government, which now controls an 80% equity stake in AIG, should assert its ownership of the insurer in order to block the retention payments. Frank said the government had a better chance of prevailing in court if it acted as an owner, rather than as a regulator intervening in the private sector.
Frank's committee is expected to hold a hearing on the AIG bonuses on Wednesday.
AIG has said it is contractually obligated to pay the bonuses and will make efforts to reduce the retention payments by at least 30% in 2009. The bonuses were negotiated in the first quarter of 2008 when the financial products business was expected to have a "significant ongoing role" at AIG, Chief Executive Edward Liddy said in a letter to Treasury Secretary Timothy Geithner on Saturday.
"We understand the Attorney General's concerns, are in ongoing contact with the Attorney General and will respond appropriately to the subpoena," AIG spokesman Mark Herr said in a statement. "In the meantime, the Financial Products unit continues to work diligently to unwind operations and has made significant progress in doing so."
The insurer has accepted more than $170 billion in U.S. government funding, and government officials have said they may have to pump more money into the insurer if the economy continues to worsen. Earlier this month, it reported a $ 61.7 billion fourth-quarter loss.
In his letter Tuesday, Cuomo said the contracts his office has reviewed contained a provision that required most individuals' bonuses to be 100% of their 2007 bonuses.
"Thus, in the spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before," Cuomo said. "My office has thus begun to closely examine the circumstances under which the plan was created."
Cuomo also said AIG was able to bargain with some of its financial products employees, with those employees taking salaries of $1 in 2009 in exchange for their retention bonus packages.
"The fact that AIG engaged in this negotiation flies in the face of AIG's assertion that it had no choice but to make these lavish multi-million dollar bonus payments," Cuomo said. "It appears that AIG had far more leverage than they now claim."
-By Chad Bray, Dow Jones Newswires
So Bush was wrong.Two wrongs don't make a right.So what, congress and Obama had to approve it because Bush was in favor of it? Come on now.Maybe complete failure wasn't an option but it could have been handled a lot better. Again, The bonuses are part of doing buisness. You have to give a return to your shareholders and retain key employees. Buisness 101. Again, the focus on the bonuses is just a ploy to divert attention from the fact that congress has no idea what is going on and the bailout was just a feel good measure based on their arogant belief that we(all of us taxpayers and voters) have no idea how buisness and the economy work. Again, smoke and mirrors.
Oh I get it - tax dollars to people you pay a 1 dollar salary to just so they can collect a bonus = good. Earmarks to States that pay taxes = bad. Personally, I don't really care - it's all play money anyway. I just like pulling your chain.
And Barney Frank's a piece of shit and I don't really care what he thinks. And Andrew Cuomo? Ooo I put a lot of stake in what he says. Like Father like son. Follow the money! These guys are the best arguments for term limits.
More specifically it's AIG Financial.
AIG is a massive conglomerate, the majority of which is actually fairly well run and viable.
In my opinion someone's got some explaining to do.
But I also tend to think that the blame here should be directed at the perpetrators. That is, AIG Financial. These are the rats that through highly speculative transactions and outright incompetence and indifference have damn near driven a cornerstone of world financial stability into a ditch. Their hubris is only compounded by their outright defrauding of the American taxpayer to the tune of $150 million plus in contractually mandated bonuses.
Should the Obama administration have been aware of this obligation prior to releasing bailout funds to the foundering corporation?
I believe a solid case could be made for the affirmative.
On the other hand, placing the blame solely on the president is a little like placing blame on the rape victim for dressing suggestively and walking alone at night.
At worst, Obama is guilty of not knowing better. It has happened on his watch and so he too gets to take a bite of the shit sandwich.
I said months ago that the financial system bailout could possibly go down as the greatest fleecing of the taxpayer in history. That would be WORLD history.
Would that it were so simple as to say let 'em fail. Life's cruel sometimes.
We have over time allowed ourselves to become co dependent enablers with massive, intertwined, international behemoths of world economics.
It's kind of like being on an ocean liner out in the middle of the Atlantic and it's taking on water at a disconcerting rate. You could say well this boats really kind of a piece of shit anyway screw it let it sink. Only problem is that you go down with the boat.
They are too important to let fail. It is as Matt would refer to another ten dollar word, a conundrum. We are going to take it in the shorts. It's merely a question of how deep.
People are pissed and they have a right to be I think. Direct your anger at those that are screwing you over, not at those that are less than perfect at furiously attempting to keep the ship from going down with all hands.
I have a 403 B with AIG. Fortunately for me, the options I hold were not effected by the stock market. With that said, I still believe that capitalism should take its course with out bail outs! But what do I know?
Doug, if you ever wrote a 'Masters Thesis', I'm betting it was 'kick-ass'!
Ric,
Well that is an option. Really what's happening here is a deferral of the pain to future generations.
It would be interesting to see how far this thing would go if we did decide to let things take their own course.
Spam, check.
Jack Daniels, check.
Varmint gun & express loads, check.
Could be something to tell to the grandkids.
Either way there will be an "other side" to this thing.
On a related note Apmex had a one day sale today of 5 gram .999 pure gold bars for just under $150. Only $9 over spot.
Relatively speaking not bad actually.
Nighty night everyone.
Doug, if I read your last posting right, you are saying that our decedents will be paying for these bail-outs? I personally believe that they will be. But correct me if I misinterpreted your last posting! You did mention Jack Daniel's! But what about Ham's beer? Me man, beer good! ;)
Shit Doug that was a few Ten dollar words. With my fellow Reps.understanding I would like to post an article I read. As you all know I'm into cars and we all have our own sources of information. I don't have a scanner or printer so bear with me.The following is from "Muscle Car Enthusiast"Feb.2009./ Steve Statham, Editor."We are currently living through the worst economic environment of most of our lifetimes,and there's undoubtedly more bad news to come.As this is written the big three automakers are teetering on the brink and some may not survive.The troubles go well beyond whether the cars are any good,well beyond issues such as quality or fuel economy.The european and Asian automakers are also watching sales
tumble.Problems include lack of liquidity in the capitol markets,tightening credit,rising unemployment,The Big Three's legacy cost structure,and consumer confidence so low it can barely be measured.We may soon be faced with an unrecognizable automotive market.We may soon see the end of nameplates and brands that have been with us our whole lives,corporate icons that once seemed solid as a rock.Right now there are no good choices for Detroit just different degrees of bad.GM management says the company may not have enough cash to last until Obama is inaugarated(this articles a few months old)The new Camaro is right around the corner so close we can taste it,but who realy knows if it will ever see production.Pontiac division is said to be on the chopping block.That Pontiac,once the number three nameplate inthe US and the division that made musclecars part of the popular culture,is vulnerable seems incredible.Chrysler,being a privately held company is a little harder to read but is clear that corporate owner Cerberus is desperate to sell. The best outcome for Chryslers employees might be foreign ownership.Ford is only slightly better off but in this market that could change at any moment.Any of these companies may choose bankrupcy, but would anyone buy a $30,000.00 car from a bankrupt company? As far as a government lifeline,It was sad to see the Big Three CEO's beg for loans from Washington. Any bailout will not come with just strings attached but chains that would moor an aircraft carrier. One of the conditions of a "bridge loan" was that the car companies submit a "Viable" plan for recovery.That was the most sickening sight of all.As if the "Nitwits" in congress had the buisness experience or economic acumen to judge whether an automotive buisness plan was "Viable".How about a viability plan on that deficit first"."If you have the means, now is the time to buy.Your countrymen need you and tomorrow may be to late". I left parts out because I type slow. But I think that everyone gets the point. Should we save an institution and icon like GM? Yes but because it represents who we are as a country.Industrialists. The big dog on the block. Our cars have defined who we are as a nation for over a century. Remember"Baseball,HotDogs Apple Pie and Chevrolet" or"See the USA in your Chevrolet".Or pick any other of the Big 3's Jingles. Bottom line.Give us the loan,Let us build what America wants.Don't tell us how far it needs to go on a gallon of gas(the buying public will tell us) and give us a repayment plan just like any bank would do. Let us do what we know how to do.End of rant. PEACE
Ric,
yep unfortunately all of this money that's being borrowed and printed to pay for these bailouts will in theory have to be repaid.
I seriously doubt it's going to be all paid back in our lifetimes. That leaves it to the next generation of lucky contestants.
And that is to say nothing of the severe inflationary pressure likely soon to come from simply printing more money to pay your obligations. The more there is of something the less it's worth.
It's the hidden tax. Uncle Sam prints more money to keep operating. The dollar becomes worth less and less. Joe lunchbucket needs more and more dollars just to stay where he was back when he was just broke.
rac and Doug, You are some of the last intellects on this blog,other than Paul!Write it as you see it. You are voices in a barren land of bloggers.
Did RAC post a two hour movie that predicted this whole scenario.
Jo, how nice of you to flatter some, in your attempt to degrade others.
mat,It's spelled "business". Break out the dictionary folks.Ric,You've always been a thorn.So you don't fall into my opinion of intellectuals,so what? Like you said ,take it like a man. I noticed that you didn't say otherwise as to what I wrote about your dna tranfer offer to Steve's"girlfriend" She showed me otherwise.Keep praying for youself and your family.
I will say the House's proposed 90 percent tax on AIG bonuses seems a little unconstitutional.
RAC'ster, like I said, I'm really bad with acronyms. It is ING that I have a 403 B with. My bad! ;) I too feel that the House's proposing a 90 percent tax on AIG bonuses seems a little unconstitutional.
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