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AIG Bonuses: Legalized Theft Has Found Its New Champion
03/16/09 by Stanley Barnes
Filed under Bourbon & Bayonets
Whatever happened to being paid for performance and rewarding competence? Have corporations and the present day slime that runs them become so corrupt that all hope for some kind of decency and moral leadership has become lost?
You see, there’s something to be said about recessions, or a more severe recession in this case. Anything bad that can happen — will happen. When the economy hums along, most people gain from the “rising tide that lifts all boats” theory, or at least they are able to keep their heads above water long enough to not feel compelled to say a peep about all the injustices around them.
When you think about it, much of the America public probably feels like mice trapped in a maze, worried about where they will find the next piece of cheese. And when they see someone slide through the backdoor and take what doesn’t belong to them just because they can, it triggers survival instincts that begin with finger pointing and a call to arms to get our government to take regulatory action.
And so we begin today’s article discussing bonuses.
What Happened to My Bonus?
In the past I used to think of someone as earning a bonus for being a diligent worker. Perhaps I was just brainwashed by the image of Chevy Chase, playing the role of Clark Wilhelm Griswold in the movie National Lampoon’s Christmas Vacation. If you’ve seen this film, you’d know that Clark is an honest family man who eagerly awaits his Christmas bonus so that we can pay for a swimming pool. The problem is that he already coughed up a $7,500 check on the gift that his bank account doesn’t have the funds to cover. In the end, Frank, who is Clark’s boss, gets dragged to the Griswold home to suddenly discover the error of his ways and decides that he will hand out bonuses this year with a 20% increase on top of what was paid out the year before.
Ahh, you just have to love those perfect movie endings.
But unfortunately, that’s not reality. Ironically, there are many similarities here between the story of Clark Griswold and the American public. In general, both have lived well beyond their means. And when you live paycheck to paycheck, or bonus in this case, there is a downward spiral that soon begins to materialize. Although I do have my pet peeves with today’s overextended and misguided consumer, the purpose of this article is to pull back a layer or two on what is happening on the other side of the bonus fence.
Our lovely friends over at AIG have once again failed to avoid recklessness and seem very competent with regards to their ability to exploit the legalized theft corporate loopholes. In recent news, the company shelled out $165 million in executive bonuses during 2008. And this was all during the same period of time when the firm almost went belly up, dragging the rest of the industry into the abyss with it.
AIG Sets Record for Largest Corporate Loss in History
The New York Times just came out with a piece indicating that AIG is paying out bonuses out to executives who are responsible for sending this company on the current kamikaze course, destroying over $100 billion in shareholder valuation. These are the people who sold an incredible pile of derivatives that AIG couldn’t support financially. Instead, it’s the taxpayer that’s being asked once again to foot the bill. They are the ones who will pay the price for a company willing to gamble its future on more than a few bad bets. Just to put this in perspective, AIG reported this month that it had lost $61.7 billion in the fourth quarter of 2008. That’s the largest corporate loss in history.
I feel like I’m watching the same National Lampoon’s movie play all over again – like a bad dream. And yet the movie continues.
Sources have verified that the company would have folded up shop had the government not stepped in with $170 billion in bailout relief to save the sinking ship. And now we find ourselves in a situation where such entities have become supposedly too big to fail? I’m all for letting bad business fail. Afterall, they deserve too. The problem is that such collapses would almost certainly trigger a domino effect of failed banking giants that would surely have the words “Great Depression” rolling off the tongues of every Joe and Jane in the neighborhood. That’s what you call being pinned between a rock a hard place. Either way, people suffer.
But are we eventually setting ourselves up for an even larger financial calamity in the future by avoiding the bitter pill today? Future generations are almost certainly guaranteed more hardship. Chances are we will not wake up until something catastrophic happens to force a change in our habits. No longer can we afford to lie to ourselves, not save and live beyond what the market equilibrium dictates, because in the end, everything reverts back to the mean.
What really gets under the skin is the fact that AIG is legally obligated to pay out these bonuses. There were contractual deals made before all this madness decided to poke its ugly head above the surface. But we can’t just go in and violate these contracts. It is just as important to think of the consequences that such actions would have on our system of law. But we can make sure that all future contractual activity is thoroughly reviewed and governed with a careful eye.
I realize that this $165 million in bonuses is relatively small in comparison to say the $3.6 billion handed out over at Merrill Lynch, but the amount of harm done to the industry certainly justifies the outrage. In fact, leaders of the White House economic team and even key Republicans have joined the chorus in denouncing payments made to executives inside the insurance giant. To our knowledge, AIG has agreed to the requests made by the Obama administration to pull the reins on future payments. And so we wait and see what happens next.
Stanley Barnes
Analyst, Bourbon & Bayonets
Dan S on Tue, 17th Mar 2009 2:32 PM
I absolutely hate AIG – what moxy. They borrow money from the taxpayers – then turn right around and go on an english fox hunt that cost 83k – WHAT THE HELL. This guys should be beated with sticks and exiled to CUBA…
Roger Palmer on Tue, 17th Mar 2009 3:01 PM
Idiots in the US Congress! Let AIG suck sand just like any other FREE ENTERPRISE business that is poorly managed.
Cull out the weakminded also! The Best and Brightest will always come to the top. Out serve! Out work! Out think!
You never will be successful rewarding failure…as our congress and your president are doing!
Oh where is REAL LEADERSHIP! God PLEASE BLESS AMERICA AGAIN!
RobC on Tue, 17th Mar 2009 3:02 PM
My assumption is that had we (i.e. teh Ammerican taxpayer) allowed AIG to fail, these contracst would not have been enforceable.
If that’s the case, does it not seem ironic that our benefice has enabled this fraud?
Paul S. on Tue, 17th Mar 2009 3:05 PM
I’m a Canadian, but I can defintely see that more of this insanity will certainly cause another American Revolution.
Too bad you can’t pillory these greedy guys right on Wall Street!
LAWRENCE C. on Tue, 17th Mar 2009 3:05 PM
Bulls— bonues are paid for performance, good idea making the co. money etc. If we the people have to bail them out and they get bonues for lieing to their share holders for what 6 monthes a year then we should bring them up on charges. I am sure some hot shot lawyer looking to make a name would be more than willing to find charges to bring against them. Maybe they would rather give up their bonues then to have some one dig up some dirt against them which could send them to JAIL.
Gene S. on Tue, 17th Mar 2009 3:07 PM
I thought bonuses were based on profits
derived from employee performance.
The higher the profit, the better the bonus.
This seems to be a perfect opportunity for
our self-serving politicians to create a special 100% “tax” on all bonuses paid to companies that receive taxpayer bailouts.
Donald H. on Tue, 17th Mar 2009 3:07 PM
While this may be wrong, it is just a drop in the bucket of waste the trillion dollar bailout will cost. I am sure you will be able to see taxpayers lose this much every day from the waste in the stimulas program and the budget with 8,000 earmarks.
It is time for another “tea party”
Thank you
James A. on Tue, 17th Mar 2009 3:09 PM
I think its time put these people out of business. AS a taxpayer We will never get a dime back.
Ken L. on Tue, 17th Mar 2009 3:14 PM
The article is fine and highlights a big problem – things like bonuses and tips should ALWAYS be contingent on superior performance – emphasis on the word SUPERIOR.
J> A. Edwards on Tue, 17th Mar 2009 3:17 PM
Why dosen’t the gov. force AIG into bankruptcy and let those execs. get paid off in copper coins lik the shareholders are doing. This seems like a leagal way to get around the contracts. I am sure that there is a way for the gov. to get around the contracts if they really want to.
J.A. Edwsrds
Jim R. on Tue, 17th Mar 2009 3:23 PM
Maybe AIG is legally required to pay the bonuses, but one has to wonder how the bonuses were calculated! A performance-based bonus ought to be zero right now.
Further, even if the bonuses must be paid, what’s to stop congress from taxing 100% of these bonus payouts through some targeted legislation?
Ed on Tue, 17th Mar 2009 3:25 PM
Nice article and I couldn’t agree more.
All I can say is this:
As a veteran of foreign wars, the only
bonus a person got when they survived
an attack was life. Maybe that’s what
these Wall Street Pigs need, a good shelling.
Then, they’ll understand what life is and
give up that greed. Regardless, they’ll
understand one day that it was greed and not
life they pursued. I guess, when their time
is due, they better dig that grave 8 feet rather
than 6, they’ll need the extra room for that Bonus money.
By the way dosen’t AIG stand for “Americans in Greed?”
I don’t know what’s worse, an AIG Terrorist
or a Taliban Executive? Hard to tell the difference
these days.
Make it a Pleasant Day and “Ask not what your Country
can do for You but, What you can do for Your Country!”
Wayne M. on Tue, 17th Mar 2009 3:30 PM
Like you,I agree that bonus payments should be (and in a normal business enviroment) usually are paid for performance. I am in a sit down with my wife to see if I can get my contract renegotiated to reflect a guarenteed bonus structure not matter what our company comes up with in profits.SWEET.Pipe dream over.Back to reality.
If todays happenings don’t give the corporate greed a chance to get their high priced exectutives to sit back and take notice,then I beleive life will correct itsself.The excecutives probably should arm themselves too. There are hard working taxpayers out here that will not stand much more of the greed that is being displayed by todays exceutive committees.Giving something back to the working man is the ONLY way to pull this continent out of the reset that must take place.
Randy W. on Tue, 17th Mar 2009 3:35 PM
Bravo !! The only thing I could add are the words of Barney Frank, who, although I’m not a big fan of his, put it rather succinctly. In an interview recently, he stated, “they may be contractually entitled to these bonuses, but they are not guaranteed a job.”
Tim R. on Tue, 17th Mar 2009 3:40 PM
From what I hear AIG has the pension fund for Congress. That is the reason they have gotten gov’t money.
They should have been allowed to go under and suffer the consequences. Now we are on a very slippery slope with crooks and thieves as our guides.
Suzanne G. on Tue, 17th Mar 2009 3:41 PM
I am a nurse. Needless to say that no matter how hard I worked, no bonus was ever in question. Nor any “golden parachute” if I proved incompetent and got fired. And for many years nurses were never accorded a pension or insurance. After all, we worked for non-profit institutions, why should we expect such perks? In the 1960s and 1970s many nurses were paid less than postal clerks.
All of that being said, why are we now being required (we had no choice in this bail-out) to pay bonuses to people who, in many cases, were paid more in a year than we could expect to earn in a lifetime of hard work? I am sure nurses will not be alone in being outraged at this scenario! If AIG had been allowed to fail, would bonuses still have been paid because they were “contractual”? LET THEM FAIL!
Alex S. on Tue, 17th Mar 2009 3:47 PM
The real problem is George W. Idiot and the group of masonic bankers. The idiot stopped the up-tick rule that was in effect for 70 years. With the SKF’s etc. used by AIG to destroy Bears Stearn etc.,WHY ARE bush and the bankers not being tried under the RICO act.?????
Diana in Calgary on Tue, 17th Mar 2009 3:53 PM
Valid contracts they may be, but technically the company is bankrupt. If AIG is bankrupt, those guys are generally unsecured creditors and not entitled to anything.
Since AIG is only solvent thanks to equity by the people of the United States, they should have the right to defer payment until AIG has refunded the US Government for all their borrowed stash. Until then, these folks made a deal that should not be enforceable.
The idea that someone committed fraud when the contracts were approved is interesting. Perhaps they were aware that AIG would likely collapse making those contracts worthless – only the strong action of the Feds turned this into boondogle.
Hire the lawyers that wrote those ironclad contracts to write the ones to protect the US citizens from highway robbery. And perhaps Congress can pass a special bill for employees of defunct financial institutions to tax back 90% of those bonuses for the 2008 tax year. Go get’em tiger!
Mark on Tue, 17th Mar 2009 4:01 PM
How do contracts that pay bonuses regardless of performance come to be. It looks like the Board of Directors are derelict in their duty, which is looking out for shareholders, not management.
Gary on Tue, 17th Mar 2009 4:04 PM
That was technically NOT AIG’s money that they used to pay the bonuses so unless the government agreed to let them use it in this manner, then they were wrong to do it. If in Chapter 11, which should have been required, then these contracts would be in receivership and paid out LAST!
Eli S. on Tue, 17th Mar 2009 4:07 PM
It’s time to pull the plug and let AIG and its corrupt executives go down the drain. The healthy(?) insurance divisions (Life and auto)should be sold off to better managed insurance companies.
Alan on Tue, 17th Mar 2009 4:08 PM
The executives that received these bonuses should be sent to the front lines in Iraq or Afganistan to “give” back to the country that gave so much to them.
dennis on Tue, 17th Mar 2009 4:13 PM
Take all the money from the congress’es pay they wrote the friggin deal, fire B franks and C Dodd they let this happen! they startrd the low income loans. Vote everyone out that voted for these bills.
Neil H. on Tue, 17th Mar 2009 4:23 PM
Why are you wasting time on $0.16B paid out in Bonus?
What about the $62.00B AIG paid to Banks in foreign Countries?
It appears as if you are trying to make sure that the real issues are not being addressed.
charlie on Tue, 17th Mar 2009 4:45 PM
Next year their bonuses will be $330 million.
Andy F. on Tue, 17th Mar 2009 4:46 PM
screw the investor! yes we can
lie to the people! yes we can
10% unemployment! yes we can
1 t.$ deficit! yes we can
saving the unsavable! yes we can
pay fat bonuses! yes we can
ponzi! yes we can
lousing our houses! yes we can
lousing our jobs! yes we can
lousing 100 of n $! yes we can
print loads of money! yes we can
over board in debt! yes we can
huge deficits! yes we can
recover! yes we can
when all the secret bank accounts around the world will be declared and taxes on such will be paid plus penalty by those who have those accounts! yes we can
it is about time that people read the history books specially the king of france history.
regards
andy
Jim on Tue, 17th Mar 2009 5:00 PM
You are picking and choosing which laws we “can’t break”.
What law allows the US government can take our tax dollars (that we don’t have) and give them to AIG … who in turn gives that money to foreign entities, such as Societe General, Barclays and who knows what other banks ??
Are you kidding me ?? None of this is “legal” …
We should stop the whole darn mess. It is total insanity and none of it is authorized by the Constitution (if you think it is, then I challenge you to read the document and prove it).
But … to your question … if the government is going to abrogate mortgage loans and allow judges and banks to summarily re-write principle and interest obligations, and put the difference to the taxpayer … then we sure as hell can stop bonus payments to the SOB’s who helped create the whole mess !!!!!!!!!!!!!
Charles S. on Tue, 17th Mar 2009 5:17 PM
You reward someone for doing goodand not by doing bad.Ihave worked in management and never got a raise for not doing a good job.The worse part is that you let them go , and another company will pick them up and put them on there payroll.It’s stinks and congress should not let it happen.
Jerry B. on Tue, 17th Mar 2009 5:23 PM
Why doesn’t any of you newsletter people put the blame where it is supposed to be. Barney Frank watched Fannnie and Freddie go down and constantly said nothing.
CHRIS DODD put in the amendment that ALLOWED the bonuses.
Tell it like it is. What are you afraid of?
messmore K. on Tue, 17th Mar 2009 5:38 PM
blame belongs to congress. aig should have been allowed to fail. bonuses should be paid if they were part of management contracts
Ronald C. on Tue, 17th Mar 2009 5:38 PM
$165,000,000 in bonuses compared to $170,000,000,000 in bailout is .00097 of the bailout money. While I agree that giving a bonus to someone who looses billions doesn’t make sense, without a lot more infomation it is impossible to judge the wisdom of this action.
shirley on Tue, 17th Mar 2009 6:11 PM
Re the contractual obligation to pay bonus to aig— what Mr Fisher perhaps overlooks is that had the govt not stepped in and bailed them out those contracts would have been worth zilch .. As he himself says the company would have folded without the infusion.. It seems that only the govt intervention saved AIG.. and therefore they have a ‘right’ to negate those so called contracts which were worth nothing .. Its morally reprehensible that AIG chose to validate worthless contracts with Taxpayer money
Robert N. on Tue, 17th Mar 2009 6:12 PM
If you can believe the AIG spokesperson, those bonuses were for employees under contract…his example was, if you have a person whose contract says if he sells x amount of insurance he gets a y bonus..you gotta pay it or get sued.
Besides, all that bonus crap is of no consequence since the stimulus bill had an insert by Dodd, if I remember right, that specified bonuses contracted before some date were exempted from the bonus limits set in the stimulus package.
The whole thing is a Socialist move by Obama, planned by him and the Democrat party for years, to push all their leftist stuff to the point the we one day elected a Socialist and they could take over the country. So unless someone kicks out Obama because he is Constitutionlly unqualified to be president the USA is a goner.
Richard D. on Tue, 17th Mar 2009 6:37 PM
RE: The Audacity of the AIG Bonuses
I am a non-violent person, and am currently retired. Many Americans were outraged by the audacity of AIG’s continued “blackmail” for more federal bailout money; the AIG bonuses have now put us over the edge.
Today, I wrote a letter to AIG, and suggested that the senior employees at their Financial Products Division in Connecticut would be doing the USA and the world in general, a big favor if they simply committed Seppuku.
For more info, go here:
http://market-ticker.org/archives/876-AIG-Derivatives-Guys-Just-Do-It-Seppuku.html
dave on Tue, 17th Mar 2009 6:44 PM
well AIG exce screwed up but get bonus, but that is their internal affairs .As a public co. they have to answert to their shareholders. Our government has no business in being their largest shareholder using our tax money without most of our consent.Let’s say it in another way, why do we need to pay congress, ex president Bush, and Greenspan all the extra benefits when they do such a lousy job, letting all this greed and fruad happening unfer their nose….I don’t support the AIG exce but I think our lawmakers should be subject to the same rules, America is about fair anf just….
James on Tue, 17th Mar 2009 7:30 PM
While the thieves get richer , how do we suckers survive ?
James on Tue, 17th Mar 2009 7:35 PM
I don’t know what you want , all I can see is the money that was stolen from me .
JOHN on Tue, 17th Mar 2009 7:56 PM
SO DISGUSTING TO OBSERVE IN PRINT, “CANNOT PREVENT PAYING BONUSES”, “LEGALLY OBLIGATED BY CONTRACT”, “CANNOT FORCE RETURN”, ALL THIS IS SPIN FOR THE MASSES, A MASSIVE CRIME HAS BEEN COMMITTED, IT ONLY REQUIRES A DETAILED SUIT FILED IN DISTRICT COURT, A JUDGE CAN SIMPLY FREEZE, SEIZE, ANY AND ALL ASSETS, INCLUDING RETIREMENT, INVESTMENTS, INCLUDING FUNDS OFFSHORE. LIES, MORE LIES TO QUELL THE ANGER OF THE MASSES, AND AIG SHOULD HAVE FAILED,[BANKRUPT], AND WOULD HAVE BEEN SNAPPED UP AT ONCE. IT IS MASSIVE CRIME FROM THE USA PRESIDENTS DOWNWARD, THOUSANDS SHOULD BE INCARCERATED NOW. BUT WITH A CRIMINAL GOVERNMENT, A CRIMINAL INDUSTRY, WHOSE IS TO PLACE THE HAND CUFFS ON THESE MEGA CRIMINALS. IT SHOULD BE DANGEROUS FOR THESE NATION DESTROYERS TO OCCUPY SPACE ANYWHERE.
Gary on Tue, 17th Mar 2009 8:08 PM
Yes You pay bonuses to those who deserve it Those who put you in profit and made your company stand out as a benefit to the public. That hardly is the case here. It is like give a bonus to Al Capone for his great efforts in profiting the Mafia with the protection racket during the depression – only in this depression, the modern day Mafia is “protecting” us by rifling our pockets “legally” and giving our substance to the big boys to “bail them out” of financial death row. A pardon has been granted to scoundrels. Should have thrown the switch!
jerry on Tue, 17th Mar 2009 8:17 PM
why are these “bonus contracts” more sacrosanct than the contracts at GM, Chrysler or Ford?
if the retiree’s have to re-negotiate their contract, (pension, benefits, health care etc.) to pay guys to sink a company there IS something wrong.
if these fella’s won’t do the honorable thing, (Hari Kari), perhaps we should help them.
how many fore-closed homes can these million dollar salaries buy?
jerry on Tue, 17th Mar 2009 8:19 PM
who is “moderating” these comments, are we being spoonfed our thoughts?
al m. on Tue, 17th Mar 2009 8:39 PM
a good example how to destroy a country from the inside out you don;t need anyone attacking this country we are killing ourselves through corporate greed the boys at the top can do no wrong they the legends in their own mind, next time lets get someone with a 60 IQ, and lets see how much money he can loose then reward him for doing a horrible horrible job, the ten commandments are their for all of us to live by thou shalt not steal.
David H. on Tue, 17th Mar 2009 8:39 PM
What BONUS? What financial raise? Just increase in title and more work!
john r. on Tue, 17th Mar 2009 9:06 PM
The Great Unwashed Mob has indeed given the keys to the pantry to the most corrupt government installed in Washington in my lifetime. God help us. The “DUH” generation has not a clue as to what they have done to themselves and their children.
Attila F. on Tue, 17th Mar 2009 10:18 PM
This AIG bonus contracts entitling nonperforming executive to anything boggle the mind. They failed in their jobs, not because the tasks were so difficoult but due to the dishonesty, greed, fraud, generally immoral attitude they practiced.
Bonuses are for performance not for wholesale unmitigated fraud.
AIG’s and the execs of the other financial firms developed these problems over a number of years. Their actions are causing now untold misery and hardship to countless millions of people all over and for lifetimes into the future.
We should force these bastards to pay back the undeserved past bonuses, the fat expense accounts, even their (unearned) salaries. Other than subsistance they should be denied lavish compensation until they correct (aren’t they telling us how “talented” they are?!)the tragic consequences of their action. They should be stripped of their wealth for it was obtained by negligence, fraud and criminal action.
President Obama, the Cabinet, members of both Legislative Houses must adopt draconic laws to teach these wrongdoers, as well provide deterrent for future executives, crook financiers and other white collar criminals.
Mark N. on Tue, 17th Mar 2009 10:51 PM
I see no reason why AIG can’t abrogate those bonus contracts. Without government support the company would now be belly up and those ‘owed’ their bonuses would be at the back of the line trying to collect behind creditors.
There’s also a moral hazard lesson here as well. I’ve always assumed a bonus was paid out for bringing in additional monies into company or at least because the company did better than expected. In that case a bonus is a show of appreciation by management. Where was the job well done or profits? It seems that corporate America has decided that bonuses are a right and not an earned benefit and that attitude doesn’t seem likely to change anytime soon.
Charles H. on Tue, 17th Mar 2009 11:08 PM
Is it true that this is spread over 400 employees most of which are the “griswold’s” that worked hard all year and had nothing to do with bad investments or over leveraging. A large percentage of them have already been terminated. A lot of them worked in offices outside the US where unemployment is normaly 30 – 40%. Just wondering.
Linda on Wed, 18th Mar 2009 12:39 AM
I agree with John.
So what if there is a contract, when a company has no money to pay the bonuses no one can get paid!
How dare they think that the tax payers should pay their bonuses!
They should all be fired.
Robert H. on Wed, 18th Mar 2009 5:46 AM
Solve the AIG bonus embarrassment by letting them file for chapter 7 bankruptcy. The judge can do anything, including canceling those bonuses and it is legal. At UAL, where I had the misfortune to work and was retired. When they filed under chapter 7 and the judge let them reach out and take part of my retirement.Change my medical and take away other privileges. Anything the judge wishes is legal under chapter 7.
Please allow these embarrassments like AIG and GM go through the cleansing process of chapter 7. These unearned bonuses will disappear. They and the country will be better for it.
Rich M on Wed, 18th Mar 2009 7:46 AM
When the ‘average citizen’ pursues a loan to buy a house, car, etc., there is a vetting process used to determine if the person is reliable and competent to repay the loan. It is apparent that both of the administrations involved in these ‘giveaway programs’ (bailouts) were either incompetent or implicit in evaluating the operation at AIG. Also, look at the number of Big Boys in finance (Goldman Sachs, etc.) that benefitted from the AIG fiasco. Disgusting !!
Grant on Wed, 18th Mar 2009 9:02 AM
If these contracts really have no conditions whereby the bonuses could be withheld due to something like financial failure of the corporation (very hard for me to believe), then, legally, the bonuses must be paid. At that point, if no one put any conditions on the bail-out money, who is really to blame? That’s right, the idiots (and/or criminals) who make up the new US aristocracy… your congressmen, senators, and president. Anyone believe they are public servants anymore? They sure don’t. Funny how they can berate the US auto CEOs for flying private while they do the same on our dime. Talk about bonuses, what about the retirement our “public servants” get even for one short term of “service”. The whole system is set up for them (gvernment and big business) to take whatever they want, and leave the rest of us with the tab.
Richard D. on Wed, 18th Mar 2009 11:24 AM
It’s time for some honesty.
It’s time that our elected officials started being honest with the American people (what a novel idea!).
People in the Obama Administration, including Lawrence Summers and the grossly incompetent Timmy Geithner (former Fed Governor of NY) were fully aware that the CDSs written by AIG to Goldman Sachs, Societe Generale, Deutsche Bank, Merrill Lynch, Barclays, Bank of America, UBS, Citi, and Wachovia were worthless; they were aware of all this back in October 2008!
AIG’s management is to be commended for deluding the US Government into believing that if AIG failed, then all the big banks would fail like dominoes; go here to see their presentation to the US Government last fall. http://www.scribd.com/doc/13112282/AIG-Risk-Bankruptcy-Report
Our government knew the names of the banks that AIG was indebted to; they also KNEW that these CDSs were worthless, and they were convinced that they HAD TO covertly give these banks more taxpayer money via the AIG route. Collectively, our elected officials decided to “pay back” the banks by using AIG as a conduit. The sad part is that they still believe Americans are a “Nation of Sheep”; they thought they could continue with their deceitful actions, just like they did back when “A Nation of Sheep” was written. Someone ought to tell them that the Internet changed all of that.
As Karl Denninger correctly stated on his web site today: the “AIG Bonus” fiasco is nothing more than a smokescreen to try to divert attention from the real theft – nearly $100 billion dollars of taxpayer money that went to Goldman and other banks, including foreign banks, to pay off Credit Default Swaps . . .”
It’s time for Americans to wake up realize that our government is lying to us, and has been doing so for a long, long time. While their lies and deceit continue daily, they continue to manipulate the world’s markets; for example:
- propping up the stock market, via Geithner’s Plunge Protection Team (PPT) (lots of evidence here!)
- suppressing the gold and silver markets, in order to prop up the US dollar. (tons of evidence here, too!)
-
News Update:
Oh, this is great! Timmy Geithner said this morning “the Treasury will deduct that (bonus) amount from the $30 billion in government assistance that will soon go to the company.”
So what has changed? In other words, we the Taxpayers, are still paying for that bonus money. Don’t you get it, Timmy?
Nick on Wed, 18th Mar 2009 11:56 AM
The government has recourse. As do the taxpayers. Suspend all payments of stimubonus money to AIG and let it go under. Let the bonus babies collect from bankrupcy court.
Respectfully
Lanning L. on Wed, 18th Mar 2009 12:10 PM
Gentlemen: Your article is simply a continuation of “populist” diatribe inflaming people not fortunate enough to hold high paying positions. These businesses create the jobs in America and pay the wages of American workers. AIG is a special situation that needs to be describe correctly. Spin off and wind down the deceptive – derivatives division responsible for the loses! The lose causing, management should be dismissed, and charged with crimes if uncovered. But – Continue to Operate the successful insurance divisions as on-going businesses and reward good management and work accordingly. These activities are HOW the tax payers, Us will recover our loans! It is this simple. LEL
don k. on Wed, 18th Mar 2009 12:35 PM
I agree with the article. don
alex s on Fri, 20th Mar 2009 1:00 PM
Hey pay attention. The bonuses are 165 mil. The bigger quetion is where is the 175 bil. Wake up,wake up, bush,up-tick,bankers, the skf’S wake up, wake up. Political people have European accounts that were paid by the banks. For GOD sake wake up IT’s political this and that. LOOK at the up tick day change then look at the insolvancy. GOD SAKE wake up BUSH IS A CROOK.
clyde A. on Sat, 21st Mar 2009 10:40 AM
congrss no better than wall street.7.7 billions of earmarks in stimulus bill and house speaker refusing to allow a vote on automatic pay raises.
TINA b. on Sat, 21st Mar 2009 3:18 PM
I am a Jamaican and everyone is feeling the hardship of the recession, however after reading your article about paying out of these lum some bonuses which was signed in contract by AIG couldn’t there have been a law where they put a stop order to all these payments? though i am no business pro, but there seem to be people who are indeed basking in this recession rather unlawfully, ‘grab the bull by the horn’ and toss these mischievous lunatics in the bins.
upChuck on Tue, 24th Mar 2009 12:05 AM
There is more happening here than simple criminal activity. This is part of a much larger well planned scheme to distibute wealth, or better described as distribute poverty. The end goal is to reduce the western world citizen to the present level of third world. This is accomplished in several ways (to many to discuss here). Then remove all national boundaries, issue a common currency for the whole world, and appoint an overarching one world government. The huge national debt has been engineered deliberately over the decades with the end goal to destroy all national fiat currencies. That’s where this is going and the “quantitative easing” that just recently has gotten underway is the tool to finish the job. Next scene – HYPERINFLATION.
STEVE on Fri, 10th Jul 2009 7:00 PM
WHAT ABOUT THESE CONTRACTS ? ARE THESE THE CONTRACTS MADE BACK IN 1999 ? IF A COMPANY IS TAKING IN PREMIUMS, BUT CANNOT PAY OUT ON A CLAIM, THEN IT’S FRAUD, AND ANY CONTRACTS SHOULD BE NULL AND VOID. ALL THESE FACTS CAME OUT ON MSNBC. AIG SHOULD BE ALLOWED TO SINK ON THEIR OWN. WHO NEEDS THEM ? START A NEW COMPANY THAT CAN DO THINGS THE RIGHT WAY. A COMPANY IS ONLY AS GOOD AS IT’S LEADERS, AND OBVIOUSLY AIG IS RUN BY A BUNCH OF BERNIE MADOFFS ! WHY CAN’T OUR CONGRESS PROTECT US BETTER FROM THESE BAILOUT BULLIES ? WHERE’S MY BAILOUT ? I’VE HAD TO RAISE MY SON ON MY OWN FOR THE PAST 15 YEARS, AND I DON’T GET ANY HELP FROM ANYONE, AND I PAY MY OWN WAY WITH NO HELP FROM ANY GOVERNMENT AGENCY, OR ANYONE ELSE. WHY SHOULD THESE “WELFARE COMPANIES” BE ANY DIFFERENT ?
Donald F. on Sun, 13th Sep 2009 10:38 AM
Thanks much for that well written blog post.
Joshua J on Thu, 21st Jan 2010 6:47 PM
Here’s wishing you a very happy and prosperous new year !