Listening to the radio today: So we ( the people ) were forced to give AIG tons of cash and they have decided to use it to give out bonuses, and then refuse to disclose what they are doing.

WTH?

If this isn't a wake up call for all the people that had their heads in the sand, i don't know what will be.


Ok, must be rant day for me. Ill step away from the radio and keyboard.

Sounds like the bonuses are going to the very people (dept) who sold the credit default swaps that wiped out AIG.

quote Liddy said the company had entered into the bonus agreements in early 2008 before AIG got into severe financial straits and was forced to obtain a government bailout last fall. The large bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer. A white paper prepared by the company says that AIG is contractually obligated to pay a total of about $165 million of previously awarded "retention pay" to employees in this unit by Sunday, March 15. The document says that another $55 million in retention pay has already been distributed to about 400 AIG Financial Products employees.

http://www.msnbc.msn.com/id/29697096

Ain't that a kick in the butt.

I had AIG for auto insurance for about 2 years up until this past November. Right around that time IIRC they were getting their bailout moneys. Now my question is, if they were hurting so bad for cash, why would they go and drop a good paying customer at the end of the policy renewal over paperwork that I sent back 3 times?

IMO, they deserve to go under...

quote Originally posted by Xerces_Blackthorne: I had AIG for auto insurance for about 2 years up until this past November. Right around that time IIRC they were getting their bailout moneys. Now my question is, if they were hurting so bad for cash, why would they go and drop a good paying customer at the end of the policy renewal over paperwork that I sent back 3 times? IMO, they deserve to go under...

Go under and give us all a refund.

I was very much in favor of their initial bailout, as I felt too many 401Ks and retirement/pension funds would be wiped out--even many that were not underwritten by AIG. Most major insurers are very much connected to AIG, and would have suffered catastrophic losses if AIG went down. BUT, after seeing how poorly AIG has managed the bailout funds, how poorly they have undergone restructuring, how unsuccessful they have been in getting rid of unprofitable sections, I realize throwing taxpayer cash at a bad company is a waste of assets. Should have let them go down and used the $ to shore up the companys who had derivitives exposure to aig and to aid retirement funds in the form of guarantees.

The Sunday talk shows had lots of talk on this with the administration mouth pieces saying that AIG et al all had contracts in place where they "had" to pay out the contractual agreements made to their employees. Like the auto workers will get the same considerations?

They state that if those contracts are not fufilled those money gurus (who got the company in their mess) will go somewhere else to work and the companies will lose the expertise. So the lose the losers, so what. Where would they go in the collapsing market? Rewards for the failures in the companies

Change is all I have left.

Old Lars--Did AIG willingly sign those contracts--or were they forced/coerced into signing them under threat of strike and shutdown?

quote The Sunday talk shows had lots of talk on this with the administration mouth pieces saying that AIG et al all had contracts in place where they "had" to pay out the contractual agreements made to their employees. Like the auto workers will get the same considerations?

But no, AFAIK, Ford/GM/ are not paying out exec bonuses this year or next.

[This message has been edited by maryjane (edited 03-15-2009).]

According to news I saw, AIG had some of those contracts years ago. They just said it was cheaper to pay em off, than not because they would sue for breach of contract if they didnt. I say the government should say those contracts are void due to the bailout recieved myself.

quote Originally posted by rogergarrison: According to news I saw, AIG had some of those contracts years ago. They just said it was cheaper to pay em off, than not because they would sue for breach of contract if they didnt. I say the government should say those contracts are void due to the bailout recieved myself.

Ok, i hadn't heard that part but if its true, yes they are obligated as long as they still exist as a company. Personally I wouldn't want the government to step in and toss aside legally binding contracts. A bad precedent that would wreak havoc across several industries..

The news left that part out, much as it left out some of the 'companies wasting money on corporate jet purchases' that the planes were ordered several years ago due to the lead time... Good way to work people up.

Since the Govt (treasury dept) is now majority owner of AIG, it may be that the contracts are null and void. (change of ownership) Summers and Geithner are looking in to it.

Had the government let AIG go bankrupt then the contracts would be null and void. AIG is not bankrupt, so they get to bone-us.

I agree they should investigate the terms in the contract but I think there isn't much they can do. However can refuse to give AIG additional bailout money.

[This message has been edited by Tigger (edited 03-15-2009).]

Not to drown out the news that Congress gave themselves the all important annual pay-raise as well.

quote Originally posted by Old Lar: The Sunday talk shows had lots of talk on this with the administration mouth pieces saying that AIG et al all had contracts in place where they "had" to pay out the contractual agreements made to their employees. Like the auto workers will get the same considerations? They state that if those contracts are not fufilled those money gurus (who got the company in their mess) will go somewhere else to work and the companies will lose the expertise. So the lose the losers, so what. Where would they go in the collapsing market? Rewards for the failures in the companies Change is all I have left.

They were legally required to honor the contracts with those employees or else they would have had grounds to sue AIG for more money. Actually it sounded like they are salesmen then that would be understandable since most commission related sales people might have a contract that says if the sell x of what ever then they get x bonus. And the Government has no right to void these contracts unless they are going to pressure AIG to fire these people but then there goes more unemployed to deal with.

I wonder,
Just how big those bonuses would have been if they weren’t given bailout money?


$000000000000000000000

What morons gave these guys a bonus in their contract that did not have a performance clause?
If these were sales positions, just how did they earn anything?

Anyone think insurance companies are even good, they fight paying you anything when you have a claim.

Steve

------------------
Technology is great when it works,
and one big pain in the ass when it doesn't.
Detroit iron rules all the rest are just toys.

Its a dead heat between insurance and oil companies as to who is the richest. Both charge whatever they want for their product and have buyers over the barrel. Yes, insurance companies try their hardest to find any way out or to reduce any payouts........except to executives of course Oil companies just try hard to find someone else to blame for their prices. So they both try their damnedest to find someone else as the cause .

Retention bonuses--not tied to performance I guess. There is a request being made by congress that the names of those getting the bonuses be made public, and investigated to see what--if any--part these bonus recepients had in bringing the company to the edge of failure.

quote Originally posted by maryjane: Retention bonuses--not tied to performance I guess. There is a request being made by congress that the names of those getting the bonuses be made public, and investigated to see what--if any--part these bonus recepients had in bringing the company to the edge of failure.

A request, ? It should be a demand. Also, not only should there be an investigation in the recipients roles in the collapse, the terms of the bonuses should be made public. Exactly how do the people who cause failure deserve a bonus?
I hear that the first bailout of AIG was done in less than twenty four hours (sounds like the 1100 page Stimulus Bill vote) and that Congress had no time to discover exactly what they were granting, . Being the reason we have no clout to have bonuses returned.

quote Originally posted by maryjane: I was very much in favor of their initial bailout, as I felt too many 401Ks and retirement/pension funds would be wiped out--even many that were not underwritten by AIG. Most major insurers are very much connected to AIG, and would have suffered catastrophic losses if AIG went down. BUT, after seeing how poorly AIG has managed the bailout funds, how poorly they have undergone restructuring, how unsuccessful they have been in getting rid of unprofitable sections, I realize throwing taxpayer cash at a bad company is a waste of assets. Should have let them go down and used the $ to shore up the companys who had derivitives exposure to aig and to aid retirement funds in the form of guarantees.

(Again, I am no economist), I was against the bailout, all of them. It was argued (not just you maryjane) that they were too big to fail. The arguments gave me the idea that they were to only game in town also. If they were too big to fail, they were too big and why were (?are?) all our eggs being kept in one basket ? I kept thinking of that old adage. "No one is irreplaceable". Yeah, with no bailout I knew (so to speak) there would be hell to pay, but, it is the nature of things.

quote Originally posted by Wichita: Not to drown out the news that Congress gave themselves the all important annual pay-raise as well.

I noticed, while us lowly sate employees get the shaft. Tho at least this year the local house/senate didn't vote themselves raises, yet.

AIG was--and probably still is "too big to fail". Would have wiped out about a trillion $ worth of individual life savings in 401Ks, Pensions, retirement funds of every description, mutual funds, and a good number of banks and other lending institutions.
Long story, but back when insurance companies were just that, everything was good--mostly. There are the everyday names--Progressive--Affirmative--etc, that everyone sees on their bill, and there are names that ya only see on your actual policy rider. Names like Old Dominion. The 1st group handles claims, billing, sales etc--the part the public sees. the 2nd group is different--or was. These are the underwritters of our policies. They are the big money in insurance--the deep pockets--make the most profit, but carry most of the risk. AIG became the world's largest insurer, because it had a buttload of cash, and began buying up lots of smaller companies, underwrote most others at least to some degree, then got into the derivitaves and subprime mortgage mess thru it's Financial Services Division. And, during the building boom, any mutual fund worth it's salt had AIG--it was just an equity rich company. Billions and billions in assets--as long as equity in homes was still stable or rising. It underwrote old names like The Hartford. Met Life. Mutual. Names that have been around for 100 years (The Hartford was Abraham Lincoln's insurer) And not just here--they were global. The insurance side itself was good, but the Financial Services Division had so much toxic 'assets' when the housing market collapsed, it threatened to take down the insurance side, and all the insurance companies it underwrote for about the last decade.

Anyway--that's sorta how everything got all tied together with AIG.

[This message has been edited by maryjane (edited 03-16-2009).]

Bottom line: are we better off yet? Has His Obamaness changed the world? I can 't tell; Rosie still looks fat to me.

No--nothing has changed. The business cycle isn't complete yet, and won't be until all the bad assets are gone into the nether world--the dark hole known as writeoffs.

quote Originally posted by heybjorn: Bottom line: are we better off yet? Has His Obamaness changed the world? I can 't tell; Rosie still looks fat to me.

While personally i don't think he can improve things ( i don't believe that socialism is an improvement ) it has only been 3 months. It took us decades to get here.

Frank said on NBC's "Today" show Monday that "these people may have a right to their bonuses. They don't have a right to their jobs forever." He added that "it does appear to be that we're rewarding incompetence."
http://apnews.excite.com/ar...90316/D96V3F101.html

------------------
Technology is great when it works,
and one big pain in the ass when it doesn't.
Detroit iron rules all the rest are just toys.

quote Originally posted by 84fiero123: Frank said on NBC's "Today" show Monday that "these people may have a right to their bonuses. They don't have a right to their jobs forever." He added that "it does appear to be that we're rewarding incompetence."

Well, if anybody is an expert on incompetence, it would be Barney Frank.

quote Originally posted by heybjorn: Rosie still looks fat to me.

That is next on Obama's list of things to do. Redistribute the weight.

http://apnews.excite.com/ar...90316/D96V49O80.html

On ABC's "Good Morning America" Monday, Sen. Richard Shelby said Congress must do everything it can to make sure the government money going to AIG is handled appropriately.

"We ought to explore everything that we can through the government to make sure that this money is not wasted," the Alabama Republican said. "These people brought this on themselves. Now you're rewarding failure. A lot of these people should be fired, not awarded bonuses. This is horrible. It's outrageous."

Frank said he was disgusted, asserting that "these bonuses are going to people who screwed this thing up enormously."

------------------
Technology is great when it works,
and one big pain in the ass when it doesn't.
Detroit iron rules all the rest are just toys.

A couple of obsevations.
1. Should the people within AIG that recieved big bonuses in the recent past (18 months) who recieved big bonuses based on profits that we now know evaporated in the blink of an eye--have to pay them back?

2. AIG is so complex, that even by congress's own assesment, there are few outside of AIG that can do the job these folks are doing. I personally don't know that this is the case, but many in congress evidently do.

3. AIG may not be able to legally break the contracts, but it can ask those about to recieve the bonuses to either forego them altogether--or postpone them to a time when/if AIG becomes profitable. If these guys would step up and say "I won't accept my bonus", it would go a long way toward improving public sentiment toward this company and the financial sector as a whole.
The ball is in their park--theirs to throw away or catch and do something positive with.

quote Originally posted by 84fiero123: Frank said he was disgusted, asserting that "these bonuses are going to people who screwed this thing up enormously."

Once again, to give credit where it is due, Barney needs to stop this two-faced, holier-than-thou nonsense, since he is one of those people " who screwed this thing up enormously."

quote Originally posted by 84fiero123: Frank said on NBC's "Today" show Monday that "these people may have a right to their bonuses. They don't have a right to their jobs forever." He added that "it does appear to be that we're rewarding incompetence." http://apnews.excite.com/ar...90316/D96V3F101.html

Yup the exact same TARP bill that Barney Frank, Nancy Pelosi and the rest of those idiots wrote up. (Yes Bush should have vetoed it, but everyone was bleating that we had to do "something")
The Gov't owns this. Congress and the Senate voted for this crap. They gave them the money no strings attached.

This is what happens when you let the gov't get involved in business. AIG should have failed on it's own no bailout. About the only case you can make for the bailout is the system was rigged to fail when Frank and his boy friend in Fannie Mae forced these bad loans onto the banks and then farmed them out into the market.

Not exactly the way it happened. Tarp didn't originally bailout AIG. The Federal Reserve stepped in and did it before TARP was even voted on--maybe before it was even written. The fed saved AIG on Sept 16. TARP wasn't voted on and approved until Oct 2. They (AIG) have gotten subsequent funding from tarp, but only recently--in the bigger scheme of things. If it had happened under tarp, there would likely have been conditions in place regarding bonuses, but the fed--being not much of a political connected outfit (as opposed to Treasury Dept), just rushed in with $ and did what they did pretty much without any strings attached. The Fed, like FDIC, doesn't require congressional or executive (Presidential) approval or directive to act during what they deem emergency situations.

[This message has been edited by maryjane (edited 03-16-2009).]

quote Originally posted by maryjane: A couple of obsevations. 3. AIG may not be able to legally break the contracts, but it can ask those about to recieve the bonuses to either forego them altogether--or postpone them to a time when/if AIG becomes profitable. If these guys would step up and say "I won't accept my bonus", it would go a long way toward improving public sentiment toward this company and the financial sector as a whole. The ball is in their park--theirs to throw away or catch and do something positive with.

Yeah, when pigs start flying, hehe. We're still asking for Grasso to give back his bonus from restarting Wall Street right after 911(a required part of his initial job).

Rant: Been watching this on TV, listening to the radio and reading about this on the internet. Everyone is upset at AIG, why? Our leadership gave them billions of dollars with no stings attached. They have contractual obligations, I personally don't blame AIG, I blame our leadership for being such dumb asses. Honestly, I'm not sure they didn't do it on purpose, kind of a wink-wink deal. You know, let's convince the public we're on the verge of a financial collaspe and we'll give you gobs of money from the taxpayer's wallet. Oh, BTW, be sure to reciprocate come next election campaign.

I'm so frick'n tired of scum sucking weasels in DC. Most of them are Democrats but, some are Republican. Just makes me sick. Your children's and grand children's future has been mortugaged. Heck, wanna go for the great grand children's future also?

Rant off.

Ron

[This message has been edited by blackrams (edited 03-16-2009).]

Blame Congress for this mess.
http://www.msnbc.msn.com/id/29724816/

"Troubled insurance giant American International Group paid bonuses of $1 million or more to 73 employees,

including 11 who no longer work for the company, New York Attorney General Andrew Cuomo said Tuesday."

Something is wrong here. 11 that don't even work there anymore?

Didn't Dodd write into the law that it was ok for these bonuses? They weren't a big surprise except to those who want to feign outrage. How much did Dodd get from AIG?

Now stop looking at the shiny bit and pay attention. Who here can tell me how much of the AIG bailout money went to foreign entities and how much went to American ones? No no I said stop looking at the 1/10 of 1 dollar in bonuses and tell me about AIG giving more to foreign entities then American ones.


There are more important things about what AIG is doing with the money and its is not the shiny coin that the media and politicians want you to be fixated on.

[This message has been edited by Phranc (edited 03-17-2009).]

Well from what I can tell, the Fed reserve knew about this last year. Gietner, then head of that branch of the fed. res., was involved in the approval of these contracts. These are retention bonus's. Why you would want to keep these people is beyond me, but there it is. So short version, feds gave the money to aig knowing full well what was going to happen. It's begining to sound like Gietner will be looking for work. jm

quote Originally posted by mountainman: Well from what I can tell, the Fed reserve knew about this last year. Gietner, then head of that branch of the fed. res., was involved in the approval of these contracts. These are retention bonus's. Why you would want to keep these people is beyond me, but there it is. So short version, feds gave the money to aig knowing full well what was going to happen. It's begining to sound like Gietner will be looking for work. jm

Yes, Gietner, and Summers both knew about the bonus contracts. I can assure you, neither will lose their jobs over this.

Everyone knew about the bonuses when the bailout was done. The same people (Dodd) who said it was ok to pay bonuses are now screaming the loudest.
It's mock outrage to placate a gullible populace.

If they had contracts to pay the bonuses, then they have to pay the bonuses.
They were bailed out to keep them from bankruptcy. Had they filed bankruptcy, then they could renegotiate contracts and suspend bonuses, but by getting the bailout that legally ensured the bonuses would be paid.

Chalk it up as a very expensive lesson and don't give ANY more bailouts to any corporations. Let them go under. Let there be another depression. Because the alternative is to spend Trillions of dollars we don't have, and THEN let them go under and have another depression.

AIG is not the antichrist this witch hunt is making them out to be. No, they're no angels, but this is about Congress and the Obamanation keeping people angry and distracted. Don't forget to watch the Obamanation on Jay Leno Thursday night. No sitting president has ever been a guest on a show like this before. Makes you wonder why. It'll be more pot stirring and obfuscation while touting how open and transparent their government is.

[This message has been edited by Formula88 (edited 03-17-2009).]

The employees and execs of AIG FP (which caused the CDS problems) still received the payment, including 11 non-employees.
http://www.usatoday.com/mon...-16-aig_N.htm?csp=34

The payback that Geithner mentioned is not from those who received payments, but actually from taxpayer's own money, since AIG is 80% owned by US gov't. So it's like taking money out of your pocket to pay debt owed to you.

Nice move, Turbo Tim Geithner... Don't think that people will not notice