# AIG



## pt4u67 (Apr 27, 2006)

I know, I know: outrageous bonuses paid to execs from a failed company that is now on the government dole. However:

1) Is anything they did illegal?

2) Does anyone else find it distasteful and scary that the POTUS singles out private individuals for derision for something that is legal?

3) Now we see the heavy hand of government coming down and arbitrarily passing tax legislation singling out these individuals.

The government is not any other shareholder. No other shareholder has a monopoly on violence, the right to print money and the right to tax.


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## jackmccullough (May 10, 2006)

I think what they did was illegal. One of the national news programs broadcast a number of audio tapes tonight of meetings where top people at AIG made ridiculously unfounded statements (like, Enron-style unfounded) to investors a very short time before things fell apart, including claiming they had ample assets to cover all their obligations at the very time they were starting to grub for money from the feds. In short: defrauding investors.

I do have concerns about the idea that we're going to enact tax legislation that singles out these employees.

On the other hand, have you seen some of the people who got bonuses from AIG?
https://rationalresistance.blogspot.com/2009/03/aig-bonus-list-revealed.html


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## Relayer (Nov 9, 2005)

pt4u67 said:


> I know, I know: outrageous bonuses paid to execs from a failed company that is now on the government dole. However:
> 
> 1) Is anything they did illegal?
> 
> ...


I think you mean was there anything illegal about AIG paying bonuses, and I think the answer is no. The Obama administration is much at fault (and very negligent) here for not anticipating this from the beginning.

I think it's scary that the Obama White House has targeted a radio broadcaster for attack for stating that he disagrees with their policies. A modern day version of Nixon's enemies list, only much much more blatant. This is a very bad thing.

Lastly, I don't think the government will be legally able to lay any special tax on these bonuses and I certainly hope not. Regardless of the intent, that is a horrible precedent to set. However, they are setting new horrible precedents quite frequently, lately, so i won't be surprised if they try it anyway.


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## jackmccullough (May 10, 2006)

So the Obama administration is at fault for failing to anticipate events that took place in early 2008? Interesting.


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## Relayer (Nov 9, 2005)

jackmccullough said:


> So the Obama administration is at fault for failing to anticipate events that took place in early 2008? Interesting.


They paid these bonuses in early 2008?


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## ksinc (May 30, 2005)

jackmccullough said:


> So the Obama administration is at fault for failing to anticipate events that took place in early 2008? Interesting.


I think Geitner is clearly part of the Obama Administration and he was sold to us as indispensable to recovery partly because he helped craft the deal in the 2nd half of 2008 with AIG.

If Obama wants to claim he didn't know, then fire Geitner. That would bring Conservatives back to the table. Plus it appears no one smart enough to work in the Treasury is dumb enough to want to work for Geitner. Just an observation; it sure looks like they can't find qualified people that will take a job under him to me.

Geitner has pushed the clown buzzer twice already. This is the third time IMHO (his taxes and having no plan being the first two.)

EJECT! EJECT!


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## mrkleen (Sep 21, 2007)

Relayer said:


> They paid these bonuses in early 2008?


AIG received its first bailout of 85 billion in September of 2008. Clearly not "early" 2008, but clearly also not during the Obama administration.


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## ksinc (May 30, 2005)

This "early 2008" thing is just a distracter.

Let's all get on the same page then we can discuss this without being side-tracked. ABC News must be non-FoxNews enough for everybody here.

https://blogs.abcnews.com/politicalpunch/2009/03/obama-adminis-1.html


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## Relayer (Nov 9, 2005)

mrkleen said:


> AIG received its first bailout of 85 billion in September of 2008. Clearly not "early" 2008, but clearly also not during the Obama administration.


So, the answer is no, the bonuses were not paid in early '08. They were paid a few days ago. The Obama administration just authorized more bailout money. Obama's man, Secretary of the Treasury Geithner, was a big supporter of and helped design the original AIG bailout.

As ksinc, says, stop with the diversionary tactics.


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## mrkleen (Sep 21, 2007)

Relayer said:


> So, the answer is no, the bonuses were not paid in early '08. They were paid a few days ago. The Obama administration just authorized more bailout money. Obama's man, Secretary of the Treasury Geithner, was a big supporter of and helped design the original AIG bailout.
> 
> As ksinc, says, stop with the diversionary tactics.


Diversionary?

If anything is diversionary, it is trying to blame President Obama for bonuses paid from money paid in September 2008.

Remember the guy in power back in September 2008? Yeah, THAT GUY is the one that hired Geither first - and the one under who's watch the AIG bailout took place.


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## ksinc (May 30, 2005)

mrkleen said:


> Diversionary?
> 
> If anything is diversionary, it is trying to blame President Obama for bonuses paid from money paid in September 2008.
> 
> Remember the guy in power back in September 2008? Yeah, THAT GUY is the one that hired Geither first - and the one under who's watch the AIG bailout took place.


Irrelevant. W wasn't in the room and hasn't said that he didn't know AIG was allowed to pay bonuses. Geitner was and has. Besides now you want us to believe THAT GUY who you all said before was a bumbling idiot is now some kind of financial mastermind overseeing the bailouts?! MISUNDERESTIMATED again, eh?!

Geitner was not only embraced by Obama and is the face of the Administration on this issue; we were told he was the only guy to be Treasury Secretary because he knew so much about the bailouts because he was there when they were crafted. Obama not only has Geitner now, but he is responsible for him because of the way he sold him. Don't you all get CSPAN?!

Again, if you want to divorce from Geitner that would make us very happy. He's a disaster. Obama has missed several opportunities to pick low hanging fruit and continue his forward momentum. The last three weeks he has been sinking because of his bad decisions and broken campaign promises. You can't blame W for that (reasonably; meaning I'm sure you will try a second time.)

Because I know Jack can't get enough Salon magazine:


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## mrkleen (Sep 21, 2007)

Let me follow your logic here.

President Obama *is responsible* for Geither - because he hired him to and he is working in his Treasury Department.

However, President Bush is *not responsible *for Geither - even though he also hired him and he was working in his Treasure Department.

Got it. :idea:


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## ksinc (May 30, 2005)

mrkleen said:


> Let me follow your logic here.
> 
> President Obama *is responsible* for Geither - because he hired him to and he is working in his Treasury Department.
> 
> ...


Massive Fail.

"The Federal Reserve Bank of New York today named Timothy F. Geithner to serve as the Bank's new President and CEO. His appointment by the New York Fed's Board of Directors was approved by the Federal Reserve Board of Governors and announced by Mr. Peter Peterson, chair of the New York Fed's Board of Directors and of the search committee that selected Mr. Geithner. "

"Mr. Peterson was assisted in the search by an outside advisory committee with ties to the New York Fed: Ann Fudge, Ellen Futter, Maurice R. Greenberg, Walter Shipley, Paul Volcker, John Whitehead and Robert Wilmers. Search committee members, all current members of the New York Fed's Board, are: Jill Considine, Loretta Lynch, John Sexton, Jerry Speyer and Charles Wait. 
Mr. Peterson also was advised by Robert Rubin, E. Gerald Corrigan, Lawrence Summers, and Fred Bergsten. He also was assisted by Tom Neff, Chairman US of Spencer Stuart. "

https://www.federalreserve.gov/boarddocs/Press/other/2003/20031015/default.htm


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## Quay (Mar 29, 2008)

AIG has been receiving special treatment for years and years. Their downfall didn't happen last month or last year but has been building for about ten years according to their own annual reports and disclosures.

The fact that the largest insurance enterprise in the world operated a massive part of its float as a hedge fund (leveraged at 1 to 30 and more) either speaks to a unprecedented, fiscally insane corporate leadership at AIG or a total lack of up-to-date regulatory oversight, or both. 

Trying to blame anyone but the corporate culture at AIG and the lack of sound, bipartisan regulation reform for the past thirty years is probably futile. (Both parties seem to have been on the take in this one.)

The bonuses? Probably legal which does not make them loudly immoral not to mention incredibly "tone-deaf" in today's recessionary crisis. They might as well be giving out new, bright-red Rolls-Royce Phantoms to the people along with the cash.

Oh, and the fact anyone named Liddy is involved sort of creeps me out.


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## mrkleen (Sep 21, 2007)

Ahn the Federal Reserve Board of Governors. And who RUNS the Federal Reserve Board of Governors? The Federal Reserve Chairman, Ben Bernake - who was appointed by President GW Bush.

BTW....3 of the other 4 members of the current Federal Reserve Board of Governors was ALSO appointed by President Bush.

-Donald Kohn was sworn in as Vice Chairman on June 23, 2006
-Kevin M. Warsh took office on February 24, 2006
-Elizabeth A. Duke took office on August 5, 2008

So the chairman, vice chairman, and two of the 3 members were appointed by who?

BTW...in case you were wondering who Pete Peterson is? He is a long time Republican who was the Secretary of Commerce under who? Richard Nixon.

Again, nice try.


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## rlp271 (Feb 12, 2009)

I'm young, I'm not a political expert, nor am I a financial analyst. I was a history and east asian studies major at university, and I currently teach, so my opinion may not hold much water, but here it goes.

First, from my understanding the bonuses are completely legal, as well as guaranteed by a contract. These people could have taken the moral high road, made AIG look better, and done a lot to fix their horrible publicity and refused to accept the bonuses, but they didn't. So, you have a public outcry for this $165 million, which is really about 0.1% of the money that has actually been allocated to AIG. In these financially uncertain times, it would have been wise of the company to tell their people, "Look, you are completely within your legal right to take this money, but I implore you to think about the image of our company to the general public. If these bonuses are confirmed, there will be a public outcry, and this company's reputation will be irreparably damaged." In fact, that discussion may have taken place. None of us know. The fact is, that they didn't reject the money, they took it, and some of them ran. Now, this wasn't the smart or moral thing to do, but neither is taking away someone's legal right to money they have "earned." In the long run, this may scare people away from big businesses, because they could worry about what the government will try to do if they seem like their bonuses are out of line with the times. Especially if that company received bailout money. It could end up crippling the economy further.

As far as playing the blame game, why? Last time I checked, George W. Bush is no longer our president. The country got behind Obama's message of change, and for better or worse commited to it. You can blame George W Bush all you want, it doesn't change the current situation, it doesn't change what Obama's administration now faces, and it doesn't help anyone. It's easy to blame George W. Bush, to be upset with him, to hate him, and I'm not telling you to stop. But trying to pin the entirety of this problem with AIG on one person, president of the United States or not, is just unreasonable.


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## Nicesuit (Apr 5, 2007)

The governments not going to be able to do anything about this. It's done. As soon as that twit Dodd sneaked his little bonus protection passage through on the economic destruction bill it was all over with. These useless SOB's are all in bed with each other and it's not going to stop anytime soon. But oh look, now they're all feigning outrage. Yeah right Barry-O, go preach to the stupid and the gullible.


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## Kosh Naranek (Apr 24, 2008)

https://graphics8.nytimes.com/images/2009/03/17/business/CuomoLetter.pdf


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## jackmccullough (May 10, 2006)

Relayer said:


> They paid these bonuses in early 2008?


What I heard in one of the news stories is that some of the contracts to pay these bonuses come from early 2008.


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## eagle2250 (Mar 24, 2006)

mrkleen said:


> Let me follow your logic here.
> 
> President Obama *is responsible* for Geither - because he hired him to and he is working in his Treasury Department.
> 
> ...


Correction...under President Obama, Tim Geithner is the Treasury Department...the truly smart candidates refuse to work with the evil genius (evil genius just sounds so much better than bumbling fool!).


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## radix023 (May 3, 2007)

Actually the responsibility for the bonus protection in the stimupork bill of Friday the 13th is a bit of a muddy picture:

Foxnews holds Dodd responsible:

CNN holds Dodd responsible:
https://www.cnn.com/2009/POLITICS/03/17/aig.bonuses.congress/

But then I saw this blog post:

which led me here:

which turned up this WSJ story from Feb 14th (day after stimupork):
https://online.wsj.com/article/SB123457165806186405.html?mod=testMod

Which definitely seems to contradict the spin we're getting today.

I think this is a game of misdirection. Orders of magnitude more money went out through AIG to bad actors:
https://www.slate.com/id/2213942/

I just don't see how Obama can dodge responsibility. On the campaign trail he promised 5 days to review legislation. The stimupork bill came out of conference committee and was through in 10 hours. They didn't read it. They didn't find things like this neat little exemption for these payments, regardless of who put it in. And Obama signed the bill.

Now the things they're talking about in DC are truly scary. Doesn't anyone read the Constitution? A Bill of Attainder was forbidden for very good reason. If we allow a de facto Bill of Attainder to go through in a paroxym of rage, we will have created a dangerous precedent by allowing government such a destructive and dangerous weapon.


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## norton (Dec 18, 2008)

Yeah, maybe someone should have read that stimulus act before actually voting on it.

There's plenty of blame to spread around, but it all belongs in Washington.

That's not to say that some financial executives didn't make bad decisions, but executives are always going to make some bad decisions. That should be their shareholders problem, not the taxpayers.


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## ksinc (May 30, 2005)

mrkleen said:


> Ahn the Federal Reserve Board of Governors. And who RUNS the Federal Reserve Board of Governors? The Federal Reserve Chairman, Ben Bernake - who was appointed by President GW Bush.
> 
> BTW....3 of the other 4 members of the current Federal Reserve Board of Governors was ALSO appointed by President Bush.
> 
> ...


Try? You are the one failing to make your point. Obama appointed Geithner directly. He sold him to us. He told us he had a plan. W did no such thing with Geithner as you were comparing the two similarly. And since you are caught and now admit W didn't hire Geithner although amidst some tortured and twisted attempt at saving face; perhaps you should just scroll up and take a second pass at your reply about logic. Or you could just address the actual thread topic, but I'm sure you won't do that - just as we knew you would make a 2nd pass at W. Are you doing one of these "If you can't argue the facts argue the law; if you can't argue the law argue the facts" routines?


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## ksinc (May 30, 2005)

radix023 said:


> Actually the responsibility for the bonus protection in the stimupork bill of Friday the 13th is a bit of a muddy picture:
> 
> I just don't see how Obama can dodge responsibility. On the campaign trail he promised 5 days to review legislation. The stimupork bill came out of conference committee and was through in 10 hours. They didn't read it. They didn't find things like this neat little exemption for these payments, regardless of who put it in. And Obama signed the bill.
> 
> Now the things they're talking about in DC are truly scary. Doesn't anyone read the Constitution? A Bill of Attainder was forbidden for very good reason. If we allow a de facto Bill of Attainder to go through in a paroxym of rage, we will have created a dangerous precedent by allowing government such a destructive and dangerous weapon.





norton said:


> Yeah, maybe someone should have read that stimulus act before actually voting on it.
> 
> There's plenty of blame to spread around, but it all belongs in Washington.
> 
> That's not to say that some financial executives didn't make bad decisions, but executives are always going to make some bad decisions. That should be their shareholders problem, not the taxpayers.


Both of these.


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## ksinc (May 30, 2005)

jackmccullough said:


> What I heard in one of the news stories is that some of the contracts to pay these bonuses come from early 2008.


Jack, that's a legitimate point. I guess it comes down to whether you think money can be segregated or not; i.e., is AIG paying bonuses out of the bailout money or out of own money? is AIG paying on bonuses on money earned last year or money lost this year?

I hate to bring up the same person over and over but Jamie Dimon has some great solutions to the bonus problems; if you can hear him speak.


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## ksinc (May 30, 2005)

"A teleprompt blunder has led to Barack Obama thanking himself in a speech at the White House in a St Patrick's Day celebration."

https://news.sky.com/skynews/Home/W...ring_Address_With_Irish_PM_On_St_Patricks_Day

I'm thinking the next time I have some people over at the house I need to break out the teleprompter ...


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## agnash (Jul 24, 2006)

*Pay to stay bonuses*



jackmccullough said:


> What I heard in one of the news stories is that some of the contracts to pay these bonuses come from early 2008.


And I heard that in early 2008 AIG already knew they were in trouble.

The question for me, is what was the purpose of these bonuses? I've seen this before when I was in public accounting. A company in or near bankruptcy will contract bonuses with certain employees in order to keep them at the company long enough to either turn the situation around, or to at least wind down the business.

I am not saying that is what happened here, but perhaps it will be explained today.


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## ksinc (May 30, 2005)

agnash said:


> And I heard that in early 2008 AIG already knew they were in trouble.
> 
> The question for me, is what was the purpose of these bonuses? I've seen this before when I was in public accounting. A company in or near bankruptcy will contract bonuses with certain employees in order to keep them at the company long enough to either turn the situation around, or to at least wind down the business.
> 
> I am not saying that is what happened here, but perhaps it will be explained today.


Good point. I heard CEO Liddy had claimed they were indeed retainment bonuses, but then I heard a stat that said a bunch of them had also left that received retainment bonuses; thus leading me to believe they were being paid for staying into or through 2008. Another debate question I heard was why pay to retain people that made mistakes? Apparently, the answer given was because they know how to unwind the transactions.


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## walterb (Dec 24, 2006)

As outrageous as the bonus payments are, the real scandal is the tens of billions that have been paid by the taxpayers to make AIG counterparties whole. Goldman Sachs was the biggest beneficiary of this bailout and the bailout was arranged by Tim Geithner when he was NY Fed head along with Henry Paulson (former GS CEO) and Lloyd Blancfien (current GS CEO). Goldman Sachs would have failed without this AIG rescue. The taxpayer has also picked up the tab for Goldman Sachs bonuses this year.


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## agnash (Jul 24, 2006)

ksinc said:


> Good point. I heard CEO Liddy had claimed they were indeed retainment bonuses, but then I heard a stat that said a bunch of them had also left that received retainment bonuses; thus leading me to believe they were being paid for staying into or through 2008. Another debate question I heard was why pay to retain people that made mistakes? Apparently, the answer given was because they know how to unwind the transactions.


This is very similar to what I was thinking, but I do not know for certain. Given the political situation I wonder if Congress will be able to hold off on the torches and pitchforks long enough to get to the truth. Not that I am opposed to torches and pitchforks if the the truth supports that course of action.


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## ksinc (May 30, 2005)

walterb said:


> As outrageous as the bonus payments are, the real scandal is the tens of billions that have been paid by the taxpayers to make AIG counterparties whole. Goldman Sachs was the biggest beneficiary of this bailout and the bailout was arranged by Tim Geithner when he was NY Fed head along with Henry Paulson (former GS CEO) and Lloyd Blancfien (current GS CEO). Goldman Sachs would have failed without this AIG rescue. The taxpayer has also picked up the tab for Goldman Sachs bonuses this year.


My only issue with your statement is that I don't understand how that was the "scandal"; as that was the stated intent of the bailout. "Too big to fail" was coloquial speak for "counterparty risk." Therefore by definition the bailout money was headed to counterparties all along.


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## Cruiser (Jul 21, 2006)

I think the real problem with the AIG fiasco is that many are being blamed for the actions of a few. AIG is first and foremost an insurance company and it's insurance business was thriving. 

As I understand it, the company was brought to the brink of financial ruin by the actions of one small group of people dealing in financial instruments out of an office in London. These folks had discovered a loophole in the laws that allowed them to put about a trillion dollars at extreme risk with no regulatory oversight by the U.S. Government. The British government had limited oversight authority also as this was an American company being run by Americans. They essentially just had office space in London. These guys lost their high stakes gamble which made their parent company, AIG, responsible.

This begs two questions. First, how was this loophole in the law that allowed them to do this without regulatory oversight allowed to be there in the first place? And second, what did the powers at AIG know about the operations of that office in London, and when did they know it? By all accounts it appears that outside of that small group of people in London, AIG was a very responsibly run company that was making money the old fashioned way.

Cruiser


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## norton (Dec 18, 2008)

What if a company with a history of fraudulently reporting income in order to maximize bonuses that was creating the securities that caused the financial meltdown in the first place paid out retention bonuses after receiving government funds?

Its probably alright since these companies were created by the federal government and have paid loads of campaign contributions to be protected by congress.


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## ksinc (May 30, 2005)

:devil:


norton said:


> What if a company with a history of fraudulently reporting income in order to maximize bonuses that was creating the securities that caused the financial meltdown in the first place paid out retention bonuses after receiving government funds?
> 
> Its probably alright since these companies were created by the federal government *and have paid loads of campaign contributions to be protected by congress.*


You could say those guys really took it in the ... well we won't say that.


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## walterb (Dec 24, 2006)

ksinc said:


> My only issue with your statement is that I don't understand how that was the "scandal"; as that was the stated intent of the bailout. "Too big to fail" was coloquial speak for "counterparty risk." Therefore by definition the bailout money was headed to counterparties all along.


Goldman Sachs shareholders are still being paid dividends and the company is still reporting profits. The company will pay huge bonuses this year to its partners. This company would have gone bankrupt without the bailouts arranged by its former CEO Hank Paulson. Despite all the tough questions put to Ed Liddy today, I thought it interesting that the name of Goldman Sachs never came up. Incidently, Ed Liddy had to resign from the BOD at GS in order to take the helm at AIG. What does Goldman do that is so vital to the US economy? They make investments for the benefits of their employees and shareholders. The scandal is that they have bought influence far and wide and so dumped all of their losses on the US taxpayer.


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## Quay (Mar 29, 2008)

ksinc said:


> :devil:
> 
> You could say those guys really took it in the ... well we won't say that.


But you did, you did.

Of all the things in the world to think about, you thought about that.

Paging Dr. Freud, patient waiting....:icon_smile_wink:


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## Quay (Mar 29, 2008)

walterb said:


> ... This company would have gone bankrupt without the bailouts arranged by its former CEO Hank Paulson....


It's the American Way! Free enterprise for the poor, socialism for the rich.

It's a nice job if you can get it.


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## radix023 (May 3, 2007)

*Dodd owns up*

https://politicalticker.blogs.cnn.c...was-responsible-for-bonus-loophole-says-dodd/

Don't hold your breath waiting for him to give up the chairmanship.


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## Miket61 (Mar 1, 2008)

ksinc said:


> I'm thinking the next time I have some people over at the house I need to break out the teleprompter ...


From accounts of people who have seen him speak in person, the man can't go to the bathroom without a teleprompter telling him when to grunt.


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## Miket61 (Mar 1, 2008)

ksinc said:


> Good point. I heard CEO Liddy had claimed they were indeed retainment bonuses, but then I heard a stat that said a bunch of them had also left that received retainment bonuses; thus leading me to believe they were being paid for staying into or through 2008. Another debate question I heard was why pay to retain people that made mistakes? Apparently, the answer given was because they know how to unwind the transactions.


That was the argument I read in the New York Times over the last couple days.

My current employer has been paying retention bonuses to employees of companies we've acquired, so that they'll stay through the transition.

At a much larger company I worked for, they failed to pay retention bonuses - the old management had an equity stake that was handed to them in bonuses over the years, so after the date specified in the purchase agreement for them to remain (at their previous base salary), they took their part of the purchase price and ran. The staff in the accounting department fled too, leaving us with several boxes of paperwork and an accounting system that left a lot to be desired.

I see no problem in paying bonuses to the people who can unravel the problems. What's the alternative? Telling them, "you messed it up, so you work here for your regular salary until you've figured out how to fix it?" How many people would take that offer?


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## TMMKC (Aug 2, 2007)

ksinc said:


> I think Geitner is clearly part of the Obama Administration and he was sold to us as indispensable to recovery partly because he helped craft the deal in the 2nd half of 2008 with AIG.
> 
> If Obama wants to claim he didn't know, then fire Geitner. That would bring Conservatives back to the table. Plus it appears no one smart enough to work in the Treasury is dumb enough to want to work for Geitner. Just an observation; it sure looks like they can't find qualified people that will take a job under him to me.
> 
> ...


^+1. Geitner is proving to be over his head, ineffectual, out of his league and...should this continue...an abysmal failure. Paulson also has blood on his hands. Paulson was Bush's fault. Geitner is Obama's fault.

From what I understand, a fairly simple investigation would have unearthed most of this. As distasteful as it seems to most people, the bonuses AIG paid to these executives were part of their employment contracts. If they failed to pay them, it would have cost the company (and the government...err...US) a lot more than $165 million to settle the insuting lawsuits.


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## ChicagoMediaMan-27 (Feb 23, 2008)

Here is a simple question. Who was president when these contracts were put together? Not Obama. Who was the CEO of AIG when these contracts were put together? Not Liddy. 

Criticize Obama's decision to hire Geitner, fine. I understand that. But don't come on here and blame Obama himself for this. These are legal documents that were put together before he took office. He can't just magically tear apart these contracts because he promised change on the campaign trail. 

And remember, (if I heard this correctly today) that Liddy's current salary is $1 and he is not getting a bonus.


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## Relayer (Nov 9, 2005)

ChicagoMediaMan-27 said:


> Here is a simple question. Who was president when these contracts were put together? Not Obama. Who was the CEO of AIG when these contracts were put together? Not Liddy.


Sorry, but Obama deserves the blame...

-CNN-

Dodd: Administration pushed for language protecting bonuses

https://www.cnn.com/2009/POLITICS/03/18/aig.bonuses.congress/index.html

(CNN) -- Senate Banking committee Chairman Christopher Dodd told CNN Wednesday that he was responsible for language added to the federal stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored.

Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language.

Dodd, a Democrat, told CNN's Dana Bash and Wolf Blitzer that *Obama administration officials pushed for the language to an amendment designed to limit bonuses and "golden parachutes" at those companies.*

"The administration had expressed reservations," Dodd said. "They asked for modifications. The alternative was losing the amendment entirely."

On Tuesday, Dodd denied to CNN that he had anything to do with adding the *language, which has been used by officials at bailed-out insurance giant AIG to justify paying millions of dollars in bonuses* to executives after receiving federal money.

"I agreed reluctantly," Dodd said. "I was changing the amendment because others were insistent."


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## 16412 (Apr 1, 2005)

TMMKC;907304
the bonuses AIG paid to these executives were part of their employment contracts. If they failed to pay them said:


> The contract belongs to the company making money, and not stealing from the tax payers.


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## eagle2250 (Mar 24, 2006)

As has been experienced by far too many others, my net worth has been reduced substantially over the past six months and the futures of my children and grandchildren have been placed in further jeopardy by the decisions/actions of our government. I am conflicted...should I be outraged as I watch my government print and spend unimaginable amounts of "funny" money to bail out these institutions that have seen fit to play fast and loose with their stockholder's, as well as with, the taxpayers money, thus unreasonably mortgaging my heirs futures? Or should I be outraged by the reality that the senior management teams of the companies I have been investing in all these years, rather than using my money to grow the respective companies and thereby secure my financial future, they have been using my invested dollars, and now taxpayer bailout dollars, to line their own pockets and secure their own futures...while my and my children's/grandchildren's futures, be damned! 

Having worked hard and saved over the period of a lifetime to secure the American dream, it would appear that instead I may have realized the American nightmare. So who should we direct our outrage towards?


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## jackmccullough (May 10, 2006)

Cruiser said:


> I think the real problem with the AIG fiasco is that many are being blamed for the actions of a few. AIG is first and foremost an insurance company and it's insurance business was thriving.
> 
> This begs two questions. First, how was this loophole in the law that allowed them to do this without regulatory oversight allowed to be there in the first place? And second, what did the powers at AIG know about the operations of that office in London, and when did they know it? By all accounts it appears that outside of that small group of people in London, AIG was a very responsibly run company that was making money the old fashioned way.
> 
> Cruiser


Here's a discussion of your first question:

https://rationalresistance.blogspot.com/2008/09/mccain-my-guy-gramm-caused-this-problem.html


----------



## jackmccullough (May 10, 2006)

agnash said:


> And I heard that in early 2008 AIG already knew they were in trouble.
> 
> The question for me, is what was the purpose of these bonuses? I've seen this before when I was in public accounting. A company in or near bankruptcy will contract bonuses with certain employees in order to keep them at the company long enough to either turn the situation around, or to at least wind down the business.
> 
> I am not saying that is what happened here, but perhaps it will be explained today.


I think that is, at least in part, the explanation of the bonuses.

It still raises three questions in my mind.

First, how could they claim that they needed to pay the bonuses to retain "the best and the brightest", as they said in their letter, when these are the very people who destroyed the company?

Second, what about the people who took the retention bonuses and then left? Was there no condition that they remain?

Third, why did they need to pay bonuses for these bozos? Do you really think these guys would be a hot property on the job market, given that the first entry on their resume would be "Drove AIGFP off a cliff"?


----------



## ksinc (May 30, 2005)

Quay said:


> But you did, you did.
> 
> Of all the things in the world to think about, you thought about that.
> 
> Paging Dr. Freud, patient waiting....:icon_smile_wink:


Once you've seen the "Banking Queen" graphic you can't get it out of your head. It's like the burning sun.


----------



## TMMKC (Aug 2, 2007)

ChicagoMediaMan-27 said:


> But don't come on here and blame Obama himself for this.


There's plenty of blame to go around on this one, but I for one wouldn't pin it solely on Obama. If anything, heaps of blame should go on the Congressmen and Senators who voted for the stimulus plan. According to Minority Whip Eric Cantor this morning on MSNBC, the AIG bonus liability was in the stimulus plan. If that's true, it proves that few (if any) of our...ahem...esteemed elected officials even bothered to read the damned thing. Could it be possible that Geitner hadn't read it either? Treasury helped write the plan, didn't it?


----------



## walterb (Dec 24, 2006)

There may be plenty of blame to go around, but Obama is the president now and he came in on a promise of change. So far, he has surrounded himself with the same losers who were involved in allowing this crisis to happen. At the top of the list is Timonthy Geithner, who was Head of the New York Fed and did nothing while the big NY banks went crazy on excess leverage. That fact alone should have made Geithner the last person in America that you would trust as Sec of the Treasury (with the exception of Henry Paulson). What is interesting now is that the public is finally starting to pay attention. This will make additional bailouts very difficult to get through Congress. My guess is Geithner does not last 100 days as Treasury Sec. And AIG will implode when they get cut off from Fed funds.


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## ksinc (May 30, 2005)

jackmccullough said:


> I think that is, at least in part, the explanation of the bonuses.
> 
> It still raises three questions in my mind.
> 
> ...


Jack,

Haven't those three questions already been asked and answered in this thread? To recap: 1) a) some they contracted to retain them when the contracts were making money on paper and b) some to unwind the transactions 2) many to stay through 2008 3) contractual requirements.

As to the last facet of 3, that's the very reason they probably need the bonuses, because their future employment prospects are not so good. When you hire people into high visibility, high risk areas they need to know the risk:reward is strong. They ask for and receive employment contracts.


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## ksinc (May 30, 2005)

https://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aT_tMXRy2vDs



> March 19 (Bloomberg) -- Senate Banking Committee Chairman Christopher Dodd said the Obama administration asked him to insert a provision in last month's $787 billion economic- stimulus legislation that had the effect of authorizing American International Group Inc.'s bonuses.


----------



## obiwan (Feb 2, 2007)

radix023 said:


> Now the things they're talking about in DC are truly scary. Doesn't anyone read the Constitution? A Bill of Attainder was forbidden for very good reason. If we allow a de facto Bill of Attainder to go through in a paroxym of rage, we will have created a dangerous precedent by allowing government such a destructive and dangerous weapon.


News bites today sound like they are going to level 90% taxes on the AIG exe's who received bonuses.

Isn't Amerika great country?


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## pt4u67 (Apr 27, 2006)

obiwan said:


> News bites today sound like they are going to level 90% taxes on the AIG exe's who received bonuses.
> 
> Isn't Amerika great country?


This is a wet dream for many Dems (the usual suspects). They get to raise the marginal rate to 90% on at least a portion of someone's income.

It seems like the more we learn, the more questions pop up. Now we find out Sen. Dodd was partially responsible as was Treasury. Wasn't the amendment in question part of the stimulus bill that was rushed through without a single member reading it or a substantive debate being held?


----------



## Relayer (Nov 9, 2005)

pt4u67 said:


> This is a wet dream for many Dems (the usual suspects). They get to raise the marginal rate to 90% on at least a portion of someone's income.
> 
> It seems like the more we learn, the more questions pop up. Now we find out Sen. Dodd was partially responsible as was Treasury. Wasn't the amendment in question part of the stimulus bill that was rushed through without a single member reading it or a substantive debate being held?


Yes, Dodd outright lied about his involvement and that has been pretty much glossed over.

Maybe Obama should have have made his special Olympics comment in reference to the Treasury Dept/Congress. He'd probably wouldn't have gotten any flack over it, as opposed to the very little he has taken, anyway.

Imagine if a Republican had made that remark or been caught in a blatant lie like Dodd's. They would have been hammered in the press for a couple of weeks and it would appear in random articles for years.


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## jackmccullough (May 10, 2006)

obiwan said:


> News bites today sound like they are going to level 90% taxes on the AIG exe's who received bonuses.
> 
> Isn't Amerika great country?


I'm a bit uncomfortable with this new tax. I think the payment of these bonuses was outrageous, but this legislation seems uncomfortably close to a bill of attainder for my liking.


----------



## Quay (Mar 29, 2008)

jackmccullough said:


> I'm a bit uncomfortable with this new tax. I think the payment of these bonuses was outrageous, but this legislation seems uncomfortably close to a bill of attainder for my liking.


So far it seems like political theater rather than serious legislation, meaning it will face a hard time in the Senate and whether or not the President would sign it isn't known.

However, I'm with you on this one and go further by being distinctly uncomfortable with this rush to re-acquire what amounts to a "rounding error" given the staggering amounts of money involved that have yet to be accounted for in any proper manner. I have heard, though, that one of the bonus recipients, one H. Simpson, has just bought a Hummer RV. :icon_smile:


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## ksinc (May 30, 2005)

jackmccullough said:


> I'm a bit uncomfortable with this new tax. I think the payment of these bonuses was outrageous, but this legislation seems uncomfortably close to a bill of attainder for my liking.


Remembering I know nothing of law, it also seems close to confiscation without due process. If these people were prosecuted and found guilty of a crime they could take the proceeds, but none of that has happened.


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## ksinc (May 30, 2005)

Quay said:


> So far it seems like political theater rather than serious legislation, meaning it will face a hard time in the Senate and whether or not the President would sign it isn't known.
> 
> However, I'm with you on this one and go further by being distinctly uncomfortable with this rush to re-acquire what amounts to a "rounding error" given the staggering amounts of money involved that have yet to be accounted for in any proper manner. I have heard, though, that one of the bonus recipients, one H. Simpson, has just bought a Hummer RV. :icon_smile:


True, and it's interesting to see what lengths they will go to and what tools they will use. On other issues I am always puzzled when people argue "*they* would never do that."


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## pt4u67 (Apr 27, 2006)

jackmccullough said:


> I'm a bit uncomfortable with this new tax. I think the payment of these bonuses was outrageous, but this legislation seems uncomfortably close to a bill of attainder for my liking.


The heavy hand of government strikes. I'm almost positive if this goes through it will have a hard time withstanding a court challenge.


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## Kav (Jun 19, 2005)

I waited for 3 pages hoping somebody would make my point. You did not.

AIG is an INSURANCE AGENCY. You know, You drive your ailing mother to the hospital, except your Chrysler gets T-boned by a GM product and you have to go instead to the emergency ward.
There you fill out paperwork and give your insurance information.
Only your insurance balks at some procedure and denies payment so mom dies.
You now get to apply for her life insurance, only there is some rider on page 11, paragraph 9 about riding in Chryslers.
Your life insurance is denied, and oh, in the mail is a cancelation of auto insurance because of the accident.
You sit at the table absent mindedly stroking mom's old foxtail coat dad gave her in 1948. You go to toss the junk mail and a envelope slides out from in between the grocery market ad with coupons for New Zealand lamb and the Gold's Gymn membership discount with a one year contract..
It's a IRS notice of audit for 2007.
You sit there, turn on the news and hear the companys receiving bailout money owe back taxes in the millions.

Asking if what AIG did is legal is like asking if a Kansas City hooker is a virgin.


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## Relayer (Nov 9, 2005)

Kav said:


> I waited for 3 pages hoping somebody would make my point. You did not.
> 
> AIG is an INSURANCE AGENCY. You know, You drive your ailing mother to the hospital, except your Chrysler gets T-boned by a GM product and you have to go instead to the emergency ward.
> There you fill out paperwork and give your insurance information.
> ...


Thank you. I can't believe that nobody has made this point before now.


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## Miket61 (Mar 1, 2008)

Relayer said:


> Yes, Dodd outright lied about his involvement and that has been pretty much glossed over.


Not anymore...

https://www.nytimes.com/2009/03/20/nyregion/20dodd.html?_r=1&scp=1&sq=dodd aig&st=cse

Here, he says that he didn't know how the language got in the bill, then he says that the Treasury Department pushed back on his strict limitations for executive compensation and _his team_ wrote the new guidelines.

If the goal is to punish the people who ran the company into the ground, why create a situation where the jobs are undesirable to anyone outside the company with the skills and experience necessary to fix the problem?


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## obiwan (Feb 2, 2007)

jackmccullough said:


> I'm a bit uncomfortable with this new tax. I think the payment of these bonuses was outrageous, but this legislation seems uncomfortably close to a bill of attainder for my liking.


They already tax our bonuses at 43% so what's another 47% between friends, after all the government really needs that extra money to fund abortions and birth control overseas.


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## radix023 (May 3, 2007)

*Congressional takings / Kelo all over*

two things are making me depressed about this:
1) the Senate claw-back bill of attainder is worse than the House's
2) this:
https://www.bloomberg.com/apps/news?pid=20601087&sid=aC_hgTeumc70&refer=worldwide

It's like Kelo all over, once the jurisprudence is sufficiently 'sophisticated' or 'deferential', you can void the plain meaning of the Constitution.


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## Kav (Jun 19, 2005)

Somewhere in between 'octamom' and another mountain lion sighting, my local bobbleheads mentioned AIG is filing suit vs the IRS. And of course they are using bailout money to do it .

As a member of the working class, I am sufficiently calloused around my spincter from these greedheads not to expect any less.

But the unemployment rate for returning Iraq and Afghanistan vets is now 12.5%people.

My generation has pretty much exausted those returning vets who were inclined to shoot up or ram cars into V.A.s
or other activities that swelled the prison and homeless ranks to 50% and 25% respectively.

But God Bless us, we're churning out a brand spanking new, MILSPEC generation of disenfranchised, stiffed, thrown away and screwed vets faster than those those made in china yellow ribbon stickers.

People were jumping out of windows in 1929.
This time around I predict not a few will be thrown out those windows.


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## eagle2250 (Mar 24, 2006)

Ah gee, it seems to me we might have avoided this entire brouhaha, if our Congressmen had taken the time initially to read the $1.2T stimulus bill, before they voted on it? Rather frustrating to watch our Congress and President apply such a cavalier approach to the expenditure of so many of the "yet to be earned tax dollars" of our children and grandchildren, while our fellow forum member Kav (and so many other Americans) collect cases of someone else's empty beer bottles just to be able to buy next weeks milk and oatmeal! And now we must watch as they scramble to place blame! Are these fools we have elected to represent us the best we can do?


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## Acct2000 (Sep 24, 2005)

Eagle, I hate to say it, but unless people start to become involved with and educated about their world, (as opposed to the self-absorption that most seem involved with), yes, that is the best we can do.


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## Mike Petrik (Jul 5, 2005)

pt4u67 said:


> The heavy hand of government strikes. I'm almost positive if this goes through it will have a hard time withstanding a court challenge.


I doubt it. While I agree that the hand reeks in this case, the measure that will pass will be sufficiently well-lawyered to pass constitutional muster. The key to circumvent the bill of attainder prohibition is packaging. This will be packaged well enough to survive unfortunately.


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## norton (Dec 18, 2008)

pt4u67 said:


> The heavy hand of government strikes. I'm almost positive if this goes through it will have a hard time withstanding a court challenge.


Didn't they say the same thing about campaign finance reform?


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## Miket61 (Mar 1, 2008)

If anyone's interested, Frank Rich's column in the New York Times on 3/21 discusses the AIG bonuses in great length and is remarkably anti-Obama.

This is a man about whom Stephen Colbert wrote,

_Before I get started, I have to take care of one other bit of business: _
_Bad things are happening in countries you shouldn't have to think about. It's all George Bush's fault, the vice president is Satan, and God is gay. _
_There. Now I've written Frank Rich's column too. _


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## 16412 (Apr 1, 2005)

ksinc said:


> ...high risk areas they _*need*_ to know the risk...


You sure think of _*entitlements to the rich*_ non stop! They don't *NEED* anything! This bowing to the rich is something you do, and it is putrid. *They desevre nothing!!* It seems more and more that when you speak it is with a forked tongue. And too hide behind socialism shows how greedy you are. Long before socialism, by thousands of years, there have been boards of commerce and other boards and governments for the business world to see that "fair" happens. So, you can't call it all socialism by any stretch. Non of these guys deserve salaries and bounes and whatever else off from the government, otherwise it is not capitalism, but is then socialism. The excess is only after they have made profits and it only comes from the excesses of profit, not gov. bailouts. There contracts did not include excesses from government bailouts, why can't you get that through you masters degree head?

Your economic vew points are book learned, so your still wet behind the ears. You sound like so many professors that believed in Keynesian economics, and they were wrong. Numbers, catagoriess, etc. can all be manipulated like statistics (some old ones are gone and new ones are believed- what do you think the future holds for numbers, catagoriess, etc. of today?). In 20 years what will be taught about economics? What you believe today will be laughed at 20 years later. Yeah, history really does repeat itself. What I was taught is every thought about economics is a theory, and, they are all wrong, so you certainly can't believe books and professors. There purpose is to merely broaden the mind, not give answers. They should have shown you a little about how to navigate, then you set up your own land-marks refine your navigation skills in the real world of economics. Yeah, I was really told that professors and books are flat out wrong from the college world (no doubt there are exceptions, such as grammar books). Today the education system is full of fake gods.


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## 16412 (Apr 1, 2005)

Kav said:


> I waited for 3 pages hoping somebody would make my point. You did not.
> 
> AIG is an INSURANCE AGENCY. You know, You drive your ailing mother to the hospital, except your Chrysler gets T-boned by a GM product and you have to go instead to the emergency ward.
> There you fill out paperwork and give your insurance information.
> ...


That is well wrote.

Thanks for writing that.


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## ksinc (May 30, 2005)

WA said:


> You sure think of _*entitlements to the rich*_ non stop! They don't *NEED* anything! This bowing to the rich is something you do, and it is putrid. *They desevre nothing!!* It seems more and more that when you speak it is with a forked tongue. And too hide behind socialism shows how greedy you are. Long before socialism, by thousands of years, there have been boards of commerce and other boards and governments for the business world to see that "fair" happens. So, you can't call it all socialism by any stretch. Non of these guys deserve salaries and bounes and whatever else off from the government, otherwise it is not capitalism, but is then socialism. The excess is only after they have made profits and it only comes from the excesses of profit, not gov. bailouts. There contracts did not include excesses from government bailouts, why can't you get that through you masters degree head?
> 
> Your economic vew points are book learned, so your still wet behind the ears. You sound like so many professors that believed in Keynesian economics, and they were wrong. Numbers, catagoriess, etc. can all be manipulated like statistics (some old ones are gone and new ones are believed- what do you think the future holds for numbers, catagoriess, etc. of today?). In 20 years what will be taught about economics? What you believe today will be laughed at 20 years later. Yeah, history really does repeat itself. What I was taught is every thought about economics is a theory, and, they are all wrong, so you certainly can't believe books and professors. There purpose is to merely broaden the mind, not give answers. They should have shown you a little about how to navigate, then you set up your own land-marks refine your navigation skills in the real world of economics. Yeah, I was really told that professors and books are flat out wrong from the college world (no doubt there are exceptions, such as grammar books). Today the education system is full of fake gods.


You don't put a lot of weight in reading comprehension; do you?

Have a great day! ic12337:


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## jackmccullough (May 10, 2006)

pt4u67 said:


> The heavy hand of government strikes. I'm almost positive if this goes through it will have a hard time withstanding a court challenge.


Congratulations. Apparently Larry Tribe agrees with you.

https://theplumline.whorunsgov.com/...-says-house-aig-bill-may-be-unconstitutional/


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## pt4u67 (Apr 27, 2006)

jackmccullough said:


> Congratulations. Apparently Larry Tribe agrees with you.
> 
> https://theplumline.whorunsgov.com/...-says-house-aig-bill-may-be-unconstitutional/


My Goodness! Lawrence Tribe and I have something in common? The end of the world is near. Fire, brimstone, real wrath of God kind of stuff. Dogs and Cats living together......


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## The Gabba Goul (Feb 11, 2005)

slow day...I knew this place would be good for a laugh...especially when I saw this thread...

Now who here refuses to give panhandlers change because they "should have to work for their money just like the rest of us" or because they'll "just buy booze with it"???

eeeh...whatcha gonna do???

...carry on...


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## 16412 (Apr 1, 2005)

ksinc said:


> You don't put a lot of weight in reading comprehension; do you?
> 
> Have a great day! ic12337:


I really don't do much reading anymore.

As far as the comprehension goes- getting lost in a sea of knowledge isn't comprehension. Sorta like see the trees but not the forest.


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## 16412 (Apr 1, 2005)

The Gabba Goul said:


> slow day...I knew this place would be good for a laugh...especially when I saw this thread...
> 
> Now who here refuses to give panhandlers change because they "should have to work for their money just like the rest of us" or because they'll "just buy booze with it"???
> 
> ...


Nice to read your name here again.

I've lost a lot of interest writing here. In other words, other things are becoming more interesting.


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## ksinc (May 30, 2005)

WA said:


> I really don't do much reading anymore.
> 
> As far as the comprehension goes- getting lost in a sea of knowledge isn't comprehension. Sorta like see the trees but not the forest.


WA, it's sort of like dressing well. You have to know the rules before you can break them well. :icon_smile_wink:


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## The Gabba Goul (Feb 11, 2005)

WA said:


> Nice to read your name here again.
> 
> I've lost a lot of interest writing here. In other words, other things are becoming more interesting.


LoL...thanks...I still stop by, a couple of times a week, but I'm with you, there's alot more interesting stuff to do in a day than argue with a bunch of hard headed (albeit well dressed) fellas...


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## obiwan (Feb 2, 2007)

Well now we're seeing some things come to light



> Representative Steve King (R-Iowa) says Senator Dodd and President Obama rank number-one and number-two respectively on the list of 2008 AIG campaign donation recipients with just over $208,000 total given to the two candidates. Dodd himself is the all-time leader among recipients of AIG contributions with just over $281,000.


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## ksinc (May 30, 2005)

obiwan said:


> Well now we're seeing some things come to light


Yep! I read something that said Sen. Dodd's Wife works for AIG or one of the subs.

"The more things change, the more the stay the same."


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## pt4u67 (Apr 27, 2006)

ksinc said:


> Yep! I read something that said Sen. Dodd's Wife works for AIG or one of the subs.
> 
> "The more things change, the more the stay the same."


And don't forget, he's a *Friend of Angelo*.


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## 16412 (Apr 1, 2005)

ksinc said:


> WA, it's sort of like dressing well. You have to know the rules before you can break them well. :icon_smile_wink:


Do you think we are bascially at the bottom of this recession? Before it started it took me about 5 minutes to figure out how big it would be; to explain it takes way more time. You can think a lot of thoughts in less than a second, to explain what you thought in a minute can take hours. It seems like I read that on average a person speaks 200 words per-minute.

Not very good at figureing out where the bottom is going to be. The top is easy to figure out much of the time. At my age I have seen these come and go so many times it is not hard to fly it by the seat of ones pants.


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## 16412 (Apr 1, 2005)

The Gabba Goul said:


> LoL...thanks...I still stop by, a couple of times a week, but I'm with you, there's alot more interesting stuff to do in a day than argue with a bunch of hard headed (albeit well dressed) fellas...


Liked to do more of the things I used to do before there ever was an internet. Getting to fat sitting here.

_A bunch of hard headed..._ I've forgotten to much of what I used to know to argue these arguements anymore. Although my spelling and grammar has improved with all of their complaining, so not all is bad, though it will never be as good as it was when I was in school. I guess about the only skill one doesn't loose is riding a bicycle.


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## ksinc (May 30, 2005)

WA said:


> Do you think we are bascially at the bottom of this recession? Before it started it took me about 5 minutes to figure out how big it would be; to explain it takes way more time. You can think a lot of thoughts in less than a second, to explain what you thought in a minute can take hours. It seems like I read that on average a person speaks 200 words per-minute.
> 
> Not very good at figureing out where the bottom is going to be. The top is easy to figure out much of the time. At my age I have seen these come and go so many times it is not hard to fly it by the seat of ones pants.


I don't know if we are the bottom. I see some conflicting signs. I think we are either poised for mild recovery or it will get much, much worse; i.e. depression. I don't see a huge recovery on the horizon.

Why? The unemployment number I look at is nearing 20% which is about 1.5x the 2003 peak of 14%. If it gets much worse than that it's a depression IMHO. OTOH I think if we have easy access to capital and labor entreprenuers will create jobs.

Although I'm seeing some bottoming signals; I'm a little concerned about the impact of political risk to DFI. I think that is underweighted by most people who think it doesn't matter. Actually, a lot of our DFI receipts are because of political stability and the rule of law. All this talk of the government seizing companies on a broader scale increases risk at a time where expected growth rates in the US are low in both relative and absolute terms.

My thought on your other statements is: that's probably what every fly-by-the-seat pilot says until they crash. :icon_smile_wink: Men like Capt. Sully, for instance, don't fly-by-the-seat of their pants and when they turn off the instruments it is not only their talent, but their book knowledge of physics and learned skills that see that seem through. My opinion is talent is great when it is the differentiator. Myself; I didn't go back to graduate school for an MBA until I was in my 30s and had run a business for over 10 years. I was miles ahead of the "non-adult students"; even the professors. I am now obviously in my 40s. I had a good laugh at your comment about being wet behind the ears; I think maybe that is what is turning my hair gray?! It seems to happen to me right around my sideburns ...

I agree with your observation, but I think formal education makes one more efficient at the process. I get compliments on my letter writing all the time. However, I was never that good at writing and I have to work at it very hard for business. I'm a product of probably the worst public schools in the world; Florida. Frankly, my "adult re-education" has been focused on business, finance, and accouting; not latin. However, besides the knowledge I received, I worked my butt off in graduate school writing to requirements over and over. My posting is not always so good because it still requires discipline and perseverence for me to re-write and re-write until I can communicate all my thoughts in writing and who wants to always do that when the goal is really to relax? OTOH I just won a huge victory with my City government because a four-page analysis I did of their policy, codes, and procedures that negatively affected my HOA. I am not an attorney, but I will tell you I got a four-page analysis back from the City Attorney that says over and over "Mr. K is correct." And yesterday had a big meeting with the City Mgr, City Atty, City Engineer, and City Building Official to craft corrective action and two City Ordnances in response to my position. I know this wouldn't have been possible for me even though I would have held the same opinion without having put myself through the rigor of graduate school and taking it seriously. It also helped with applying for the CPA Exam where I had a minor discrepency crop up that required an administrative ruling. I made a written appeal and they approved my application. I had been told "They never change their mind. Afterall, this is the Board of Accountancy." FWIW, they were trying to disallow one of my Law courses as redundant.

You may notice I have a tendency to edit and re-edit my posts. I have had the forum reject an edit after I spent a long time drafting a reply. So now I hit Submit and then edit.

Cheers!


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## Acct2000 (Sep 24, 2005)

I don't always agree wth your points, ksinc, but I always understand them. Your writing is probably better than you think it is. (No one's writing is perfect, after all.)


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## ksinc (May 30, 2005)

forsbergacct2000 said:


> I don't always agree wth your points, ksinc, but I always understand them. Your writing is probably better than you think it is. (No one's writing is perfect, after all.)


That's nice of you. Thank You! What is the secret to passing "Regulation?"  Besides, stay off the forum and work the Becker! LOL


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## agnash (Jul 24, 2006)

jackmccullough said:


> I think that is, at least in part, the explanation of the bonuses.
> 
> It still raises three questions in my mind.
> 
> ...


Jack,

After reading the paper yesterday, I think we now know the answers to some of these questions. The people who created the problem have long since left the company. The people who were retained to clean up the mess really are the best and brightest, and came from profitable segments of AIG, and these people had plenty of opportunities to go elsewhere. At least a few were working for $1 per year with the possibilty of the bonus held out to them if they were successful. The retention period for the bonus ended when they were paid. I have some personal financial exposure to AIG, and it has amaxed me that one segment could bring down a company with so many other profitable operations.

Andrew


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## Mike Petrik (Jul 5, 2005)

agnash said:


> Jack,
> 
> After reading the paper yesterday, I think we now know the answers to some of these questions. The people who created the problem have long since left the company. The people who were retained to clean up the mess really are the best and brightest, and came from profitable segments of AIG, and these people had plenty of opportunities to go elsewhere. At least a few were working for $1 per year with the possibilty of the bonus held out to them if they were successful. The retention period for the bonus ended when they were paid. I have some personal financial exposure to AIG, and it has amaxed me that one segment could bring down a company with so many other profitable operations.
> 
> Andrew


You nailed it, Andrew.


----------



## agnash (Jul 24, 2006)

Mike Petrik said:


> You nailed it, Andrew.


Unfortunately my insight came from personal experience. My current, or rather former, employer has been in the process of imploding for six months. The people responsible for the mess have long since left. For the rest of us, there was the option of a severance package (greatly reduced from our original contracts), or keeping our jobs and hoping that things will turn around, with the risk of not getting paid anything (including our salaries).


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## jackmccullough (May 10, 2006)

agnash said:


> Jack,
> 
> After reading the paper yesterday, I think we now know the answers to some of these questions. The people who created the problem have long since left the company. The people who were retained to clean up the mess really are the best and brightest, and came from profitable segments of AIG, and these people had plenty of opportunities to go elsewhere. At least a few were working for $1 per year with the possibilty of the bonus held out to them if they were successful. The retention period for the bonus ended when they were paid. I have some personal financial exposure to AIG, and it has amaxed me that one segment could bring down a company with so many other profitable operations.
> 
> Andrew


This may be the case, assuming the guy who wrote the op-ed piece is telling the truth. I should point out, though, that the AIG apologists I've heard on the news have said that AIG needs to keep these particular employees because the people who built these mechanisms are the ones who are best situtated to correct them. This suggests that the people who started the mess are not long gone.


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## Quay (Mar 29, 2008)

agnash said:


> ...The people who were retained to clean up the mess really are the best and brightest, and came from profitable segments of AIG, and these people had plenty of opportunities to go elsewhere....


If this is the case it must be nice to be well-compensated for one's altruism.

Without knowing, exactly, who has been compensated and for how much it will be impossible to know if these hundreds of millions of public funds have been well spent or not.

In any case, Andrew, I am sorry to hear of your own experiences in this blasted economy. I knew a lot of people at Lehman's and only a few got either out or elsewhere.


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## pkincy (Feb 9, 2006)

Seems that there is "more to be revealed." I suspect that our energy needs to be put into recovery now, but in the near future I suspect the govt will get around to finding some scapegoats to put through the ringer. I just hope they are the right scapegoats.

An interesting comment came from a CNBC talking head yesterday. To summarize, "...the bankers were just being bankers, i.e., greedy as Hell, and willing to buy and sell anything for a profit...but the rating agencies made it all possible by rating this junk as investment grade."

Way oversimplified but we do know there is plenty of blame to go around...from Dodd and Frank wanting everyone to be able to buy a piece of the american dream (whether or not they had a job), through the unregulated mortgage companies realization that they could sell trillions of dollars of paper from folks that had no hope of paying it back, through ratings agencies that manipulated their system to give investment grade ratings to this junk, to the banks and bankers that made trillions by buying and reselling the junk, to the banks and financial insitutions (like C and AIG) that were stupid enough to actually be long in this junk in a big way.

I am not yet retired and have owned houses that have gone up and down in value in 3 boom bust cycles (up:76-79, 86-89, 97-05; down 80-84, 90-96, 05-09). The fact that these bankers/traders/funds employed people that didn't know that this could happen is what really astounds me! Their greed completely outstripped their brain.

Perry


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## ksinc (May 30, 2005)

pkincy said:


> Seems that there is "more to be revealed." I suspect that our energy needs to be put into recovery now, but in the near future I suspect the govt will get around to finding some scapegoats to put through the ringer. I just hope they are the right scapegoats.
> 
> An interesting comment came from a CNBC talking head yesterday. To summarize, "...the bankers were just being bankers, i.e., greedy as Hell, and willing to buy and sell anything for a profit...but the rating agencies made it all possible by rating this junk as investment grade."
> 
> ...


Yes; I also noticed the bank association president doesn't seem at all concerned that the non-banks are going to be run out of Washington, D.C.! :icon_pale:

The real banks must be licking their chops right now.


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## pkincy (Feb 9, 2006)

I attended the ICBA convention in Phoenix week before last (Independent Community Bankers of America) and the Community bank owners were furious with the large banks that have semidestroyed the financial industry. They also were not happy with Sheila Bair for raising their fees to pay for the bailout of the larger banks. Most of these banks loan into their own rural communities and unless they have overloaned in the commercial real estate market are in very good shape.

Perry


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## ksinc (May 30, 2005)

pkincy said:


> I attended the ICBA convention in Phoenix week before last (Independent Community Bankers of America) and the Community bank owners were furious with the large banks that have semidestroyed the financial industry. They also were not happy with Sheila Bair for raising their fees to pay for the bailout of the larger banks. Most of these banks loan into their own rural communities and unless they have overloaned in the commercial real estate market are in very good shape.
> 
> Perry


Yes; and I was amazed at the blatantness the administration got away with in the last few weeks transfering the risk to the smaller, healthier banks that had responsibly held leverage down.

Since they do not want to go and ask Congress for more TARP bailout money per se ... they have FDIC ask for another $500 Billion credit line saying premiums may not be enough to cover deposits if Bank closings increase. Ms. Bair makes a comment about FDIC running out of money; and everyone wants account deposits to be safe, so they freak out in fear and vote "YES" to approve the lending facility from Treasury to FDIC. Then Treasury turns around and announces FDIC will be putting up money to buy toxic assets.

I saw Yingling interviewed and it's like the ABA sold their soul; in return for more bailouts they are willing to accept any regulation of non-banks and/or the seizure of non-banks by the government, but they think the current regulatory structure for banks is fine as is. Well, no kidding ... who would have guessed that? :devil:


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