The Geithner Master Plan To Recover The AIG Bonuses
Pretty much the only news this week has been outrage over the bogus bonuses paid to individuals in the AIG Financial Products division (yes, they have already been paid) and discussion among the political class as to how to remedy the situation. The moment we have all been waiting for has arrived. Yep, Tim Geithner has announced his master plan to recover the ill begotten booty from the 73 individuals raking at AIG.
The first report came on Countdown with Keith Olbermann, who related the following:
"Breaking news out ot the AIG bonus outrage, in a letter to Nancy Pelosi, Treasury Secretary Timothy Geithner is revealing how he’d like to get the bonus money back. He wants that company to pay back all the $165 mil of bonus money by cutting that amount out of AIG’s operating budget. In addition as sort of extra punishment, geitner wants to take the upcoming $30 bil going to AIG and deduct another $165 from it, and deduct the same amount from an upcoming $30 bil additional payment."
Well that is simply brilliant. Jeebus, Geithner is going to impose punitive treble damages on ……. ourselves (we own and fund AIG). All the while taking the focus off the freaking 73 mopes that are skating with the loot after burning down the bank. Where did Geithner get this plan, from Goober and Gomer over at the filling station?
Never fear, there is another version. Not surprising, every Administration official in sight has been hemming, hawing and sidestepping since Monday morning on this issue. Here is how Yahoo News reports:
Geithner sent a letter late Tuesday to congressional leaders informing them that he was working with the Justice Department to determine whether any of the AIG payments could be recovered. He cited a provision in the recent economic stimulus law that gave him authority to review compensation to the highest-paid employees of companies that already have received federal assistance.
Like I said, these guys are all over the road. And they don’t appear to have a map or a plan. Interesting if the plan is now to hand off the hot potato to AG Holder, because just yesterday they were saying they would not go to court. Summers said the same thing earlier today.
Bottom line is the Administration is flailing wildly and they are not telling American citizens the straight story.
So, “change we can believe in” really meant: we’d like to appear as if we’re changing things, but in reality we’ll quickly appoint a team of tepid, tried-and-true insiders (Geithner, Summers) and ex-Clinton team players, who are chummy with the big money machine (re-election time will come before you know it) and can placate the big egos we are otherwise insisting should be confronted.
We want to make lots of noises as if we’re about to really shaking the place up, but we also want to make very sure we don’t actually rattle any feathers or do anything really radical like, you know, shake the place up.
How predictable and disappointing.
EXACTLY!!!!!! Just enough change to get people thinking that things are going to get better while obama inc. maintains the current power order.
How can you people that continue defending obama do it? Tell me, how far up your ass do you put your head to believe in someone who has empowered these wall street whores like geithner, summers, orzsag, furman, emanuel, robber rubin’s son, etc. etc., etc.? These people did not arrive at positions of power by an act of God unless your God is obama. What the hell is wrong with you people … have you’ve given yourself a obamatomy?
Z
Let’s get Real — if this was the Bush Administration, we would not even be talking about getting them to give back bonuses and/or taxing them. Please, some people cannot see the forrest for the trees!
I’m still reeling over Perino saying to leave these poor needy middle class people alone. Major disconnect.
Guaaaaaaalllllee.
Gomer said.
As I said earlier in the day, I have four pitchforks and I’m really agonizing over which one to grab with my torch.
Couldn’t we at least go back to the idea of taxing the thieves who pocketed this cash? Like at about 250%?
Jim, I have heard several versions of the tax plan; seems like every Congresscritter out there has one. Here are some questions I have about the plans, which all seek to effectively recover the entire amount through taxing:
1) Doesn’t so hyper-specifically targeting such an oppressive tax on such few individuals set a horrible precedent?
2) If you enlarge the target class, doesn’t that punish unintended targets?
3) Isn’t such a punitive and specifically targeted tax really effectively a bill of attainder?
4) Doesn’t such a proposal offend the concept of equal protection at least in spirit? Seriously, except for the criteria of having a history of discrimination, this is pretty much what creating a “suspect class” is all about.
5) Supposedly some, if not most, of the individuals are in foreign countries, how will it work as to them?
6) What will be the next group Congress will seek out to apply this newfound bludgeon to? Will we be happy we started this?
It worked better when you could just take their lands and titles.
That’s funny.
I figure any bonus over, say, $50K ought to be taxed at a rate of at least 30 and preferably 50 percent, because if you’re getting a bonus that big, you’re probably getting at least a couple of hundred thousand a year in salary. I see no reason for a bonus that exceeds $250K, in any company. (Those who say that 7-figure bonuses are necessary need to get their sanity checked. And their books audited by both the IRS and the SEC.)
Yeah, I want to get the bonus money from these guys back, and stop the future amounts that are set to go out (yes, there is more scheduled after this set). However, I don’t know about setting the precedent of using the tax code as such a selective and punitive weapon; that strikes me as ill advised.
agree on the tax thing – that was one thing I was thinking… “how would that work – a special tax code section just for these guys?” Which of course is silly.
The other thing I was thinking was how the Dems that were suggesting it looked – like the only thing they know how to do is tax somebody. Bad visual.
A task force is needed for the unwinding, and I think Eliot Spitzer is underemployed these days, isn’t he?
Right now, no one in this administration is handling this well. It looks more like they’ve all been so stunned by the size of this, they’ve forgotten there are laws available. Fraud comes to mind, as well as the laws regarding payment of taxes. (Set the IRS to looking into things, and see which rats bolt for the side of the ship.)
Yeah, this is not a trend we want to start if you ask me.
As to Spitzer, he sure is, and that would be a great choice. I’ll throw in a hooker ….. Okay, that is probably not helpful.
yeah, but it would be interesting to see if the hooker thing got any play this time. He did it and paid the price, but now I think people are thirsting for someone with some expertise who is not an insider.
The R’s would try it, but it would be interesting to see if they got any traction with it.
Is Vitter on that confirming committee?
I agree totally. He is perfect for the job.
David Vitter should be their point man on this.
That was why I said ‘all’ – I really meant ‘all’, as in every company, every bonus. They should be rewards for doing well.
And Geithner and Summers are either incompetent or really really gullible. Neither choice is acceptable.
Perhaps more enlightening to view these bonus payments as commissions.. Leads to clarity on services expected and performed.
They certainly weren’t about sharing the wealth throughout an organization in an unexpectedly good year.
1. What is horrible about a precedent that removes the ability of a corporation to pay taxpayer money to employees who have not performed their duties in a responsible manner to the prejudice of the taxpayer. What horrible precedent do you think would be set by this?
2. Laws can be written precisely to target the harm the statute is intended to address. e.g. “Any compensation to an employee above a base salary by a corporation that is insolvent and requires capitalization from the US Treasury to continue ongoing and normal business operations shall be taxed at a rate of 95%.” Sure, some employees who are without guilt may lose their bonuses, but this is not unfair when innocent taxpayers are being required to make the payments, and a bonus should at a minimum be awarded based on the productivity of the entire operation. It is not at all uncommon for a CEO to conclude that corporate performance is so bad that nobody gets bonuses.
3. Any lawmaker who can’t write a law to avoid a bill of attainder challenge has no business being in DC.
4. Equal protection has nothing to do with it. Again, Congress is in the business of writing targeted and specific bills. This one should be a breeze. What are you saying about a suspect class; a bill can be written so it doesn’t define a class, it defines sources and conditions of compensation.
5. For those overseas, it will work the same as any other legislation which attempts to impose taxes on overseas employees.
6. Why wouldn’t we be happy about cutting losses to the US Treasury caused by circumstances created by unscrupulous, immoral, and incompetent individuals trying to strong arm the taxpayer?
Sorry, I have no qualms about this at all. Can you please be more specific on why this is an unfair approach?
Because I do this for a living, and I have seen the injustice that comes from precedents being set targeting specific individuals or suspect classes with punitive legislation. You are welcome to your own opinion, mine has been crafted over a very long time in the trenches, and I think I’ll stick with it.
Defending an opinion based on a general claim of expertise doesn’t help move the ball much in this debate.
It’s all I got pal.
The Real AIG Scandal By Eliot Spitzer
http://www.slate.com/id/2213942/
It’s not the bonuses. It’s that AIG’s counterparties are getting paid back in full.
…..But wait a moment, aren’t we in the midst of reopening contracts all over the place to share the burden of this crisis? From raising taxes—income taxes to sales taxes—to properly reopening labor contracts, we are all being asked to pitch in and carry our share of the burden. Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won’t be laid off. Why can’t Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn’t we already give Goldman a $25 billion capital infusion, and aren’t they sitting on more than $100 billion in cash? Haven’t we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn’t they have accepted a discount, and couldn’t they have agreed to certain conditions before the AIG dollars—that is, our dollars—flowed?
The appearance that this was all an inside job is overwhelming. AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation.
So here are several questions that should be answered, in public, under oath, to clear the air:
What was the precise conversation among Bernanke, Geithner, Paulson, and Blankfein that preceded the initial $80 billion grant?
Was it already known who the counterparties were and what the exposure was for each of the counterparties?
What did Goldman, and all the other counterparties, know about AIG’s financial condition at the time they executed the swaps or other contracts? Had they done adequate due diligence to see whether they were buying real protection? And why shouldn’t they bear a percentage of the risk of failure of their own counterparty?
What is the deeper relationship between Goldman and AIG? Didn’t they almost merge a few years ago but did not because Goldman couldn’t get its arms around the black box that is AIG? If that is true, why should Goldman get bailed out? After all, they should have known as well as anybody that a big part of AIG’s business model was not to pay on insurance it had issued.
Why weren’t the counterparties immediately and fully disclosed?
Failure to answer these questions will feed the populist rage that is metastasizing very quickly. And it will raise basic questions about the competence of those who are supposedly guiding this economic policy…..Con’t
You are right on! As outrageous as the Bonuses for Bungling Banker Barons is, this is really just the bright shiny object to distract our attention from the really important stuff. Here’s the only thing that will work:
1. Declare a “holiday” on all transactions involving CDSs and derivatives.
2. Do an FDIC takeover of AIG, and split it up after firing the incompetent managers.
3. End the CDS “holiday” under a new heavily regulated program that requires adequate capitalization proportional to the risk.
When Wall Street sees that, then they’ll know its really safe to buy.
Next most important thing: Increase the $25 billion proposed for the Small Business Administration, with adequate regulation. This should light a fire under the Big Boys, as well as providing a much needed cash infusion to small businesses.
Bob in HI
Great catch.
Jane brought it up yesterday
Who Stole Our Country and How are We Going to Get it Back?
making, I believe, the same argument.
The issue is a vital one and imho cannot be repeated too often.
LOL bec I misread as We Stole Our Country And How Are We Going To Get It Back.
Said it before and I’ll say it again. Geithner and Summers gotta go!
Josh Marshall points to the House Oversight Committee “non-testimony” of resigned AIGFP auditor Joseph St. Denis. (He did not get his 2007 contractually-guaranteed bonus, either…) St. Denis is (reading between the lines) the lead auditor who was hired in response to the “material weakness of controls” finding (edited: the AIG internal finding which of course we don’t have, not the later 10-K filing)that bmaz quoted in the last thread. He resigned when he found Cassano deliberately excluding him from reviewing the valuations.
I didn’t put that too clearly.
It’s fairly clear that St. Denis precipitated the material weakness 10-k filing, especially by resigning.
One reads between the lines that AIG corporate had figured out that there was suchlike hinkiness going on, and that is why they hired him in the first place. As I read it, St. Denis is practically begging Waxman to ask Mark Balfan and the senior financial managers at corporate FSD/OAP what led them to hire him.
I may email that to my Mom, the retired accounting professor. She is unfazed by this because that AIG were sleazeballs is “not news”.
Yeah, in the Oct 2008 House Hearings on AIG, it sounded like St Denis resigned because Cassano was somehow able to prevent him from auditing the FP division.
It sure appears that there’s a lot of bad info going around D.C. But I think more flak needs to be aimed at Paulson — the guy who insisted on no oversight for TARP 1.
Congresscritters who helped ‘Sen Phil Gramm repeal Glass-Stengall and move the 2000 Commodity Futures Modernization Act through Congress — which opened up this can of worms — should be banned from wailing crocodile tears on teevee and radio. Sen Richard Shelby, former head of Sen Banking Comm, should not be allowed near a mic or teevee camera, for starters. The hypocrisy is too much.
(Carl Levin got the ‘Enron Loophole’ through the Senate in 2008, so he can talk on teevee all he wants, IMHO.)
Thanks.
[Note: I’m vacationing in an undisclosed location on the Texas coast. I’d like to thank ’Blue Heron’ for the open wireless network. The sat tv is busted, so the innertubes is my only news source. Best I can do for St. Pat’s is raise a glass of Murphy’s Stout, all the rest of my travel beer is from the UK, but there’s a great little brewpub in this town that makes a dandy little stout that would make an Irishman proud.]
When I first read this series of posts on the AIG ’retention’ payments, I thought I’d spent too long out in the sun today (or had too much beer, but I rejected that idea pretty quickly). This whole situation seems like something from a bad episode of 30 Rock; it makes no effing sense. No, on second thought it reminds me of the unwinding of Enron, but on a much larger scale. Of course, we didn’t bail out those crooks. I’m starting to think that Olbermann is right. Someday we’re going to call this ’why daddy went to jail’.
Because of the derivatives based on the ‘futures’ trades? Or is there some other reason?
Big differences as I see it:
* Enron was, for it’s day, massively sophisticated: off the book entities, moving (even selling) unprofitable “entities” to these off the book jobs and actually having the gall to book the sales as profits. Many, many layers.
AIGFP was simple, not complex: they sold those derivatives off the radar of legal (eg: regulated) insurance. But their product was, in fact, insurance. And the bailout $$ they’re getting, to a very large extent, is to fund their non-insurance insurance payments to the WS houses who actually wrote the fraudulent CDS’s that have broken US bank (literally & figuratively).
AIGFP sold 1 product en masse, out of purview of US regulators. The sheer volume of these things is straw that broke the camel’s back. But other comparisons to Enron much different.
I’ve made the comparison myself on this forum and elsewhere… in particular railing against first TARP, 2nd (Obama’s), Geithner/Sumner’s appointment and a lot more. My view of similarity between Enron/AIGFP:
a) they were both allowed to run the table entirely unregulated
b) they both very much paid for cops taking eye off the ball w/big money to (in Enron’s case) K-Street. Mechanics of how Obama became joined @ him w/same crowd of WS crooks I don’t know, but clearly that’s the case… and AFAIC it’s been clear for months now.
Oh yea, one other thing in common w/Enron: these guys run the table, get every last penny in the pot, and US public left nashing teeth w/lots of outrage but no bank accounts. And perpetrators left well funded for next round.
This AIG thingie only 1st big outrage of BO’s young, and rapidly appearing to look like a Harding type presidency. His entire econ plan has empowered the AIG’s (there’s plenty of others) and there’s more of this to come. There has to be, because all that bad paper still floating around out there, and it’s all on undisclosed books of the players BO has thrown his lot with.
He’s had his opportunity, and he blew it. 100%.
Biggest problem we have here is economic illiteracy. Far too many US’ers know only they’ve lost jobs, they can’t borrow money, and their stocks have evaporated. They do not understand even the basics of how all these trillions were stolen, much less that the thieves are still walking the streets in suits, sitting behind the desks which the latest financial advice ads are directing same unsuspecting Joe Q Public to help them “plan their financial future.”
The writing on the wall has been well evident for a while now, and ample opportunity to get ahead of the curve on all this shit has been waiting for someone to step into it for a while. Many of us thought BO was guy to do it. I guess not.
So we’re more or less consigned to more of the same:
* legalized theft, now on global scale
* taxpayers left funding the the depleted treasury
* Always… always avg. US citizen realizing they’ve been had in the rear view mirror. Not congress, not US prez, not most of our financial rags do honest and thorough investigation and tell the truth. We are very, very close to saturation point of moral bankruptcy, w/effects now having flowed out & well infected major portions of what used to be fairly reliable institutions.
This scandal is tip of the iceberg, a sign of more to come.
Let the good times roll.
Thanks for an excellent comment.
In terms of other shoes to drop, I assume you’re talking about commercial real estate, care to name a few others?
I assume you know about Jane’s Accountability Now project: No More Dough Till We Know Where It Goes
Commercial RE already hit the skids, but I’m thinking of other things.
a) The 20 counter parties listed as AIG bailout recipients are mostly packagers of mortgage CDS’s. It is obligations on these things that got our entire econ/money “crisis” to the forefront. Goldman, Merrill (BofA) and the others, however, still have not cleared their books of these things nor has BO’s treasury people taken action forcing them to do so. The “scandal” of these AIG bonuses is shared across the board by all of the WS CDS issuers, and sooner or later… probably later given way BO’s gone after this thing, the fed $$ keeping them afloat is going to dry up. If no other changes made in federal policy before then, when this happens it will send DOW falling again because all that $$ is tied up w/so many investments… institutional, retirement funds, everything. It is lack of getting those off-the-books CDS losses in order which is keeping huge amounts of private capitol on the sidelines.
b) The counter parties not on AIG’s list are the real victims in this thing, at least in order of degree to which they contributed to or allowed this mess to metastasize. In particular, I’m referring to large institutional retirement funds. In the US, I’m aware of only a handful which had managers who did due diligence on these mortgage bonds and stayed away from them. Most of the large ones are in huge trouble, with no real workable remedies. Remedies bandied about:
* Increase current workers contributions. Aside from fact pool of current workers is greatly diminished, w/varying degrees that pool is making less $$. So this remedy could help the funds a bit (and only a bit), while constraining the same workers. It won’t come close to making up shortfalls.
* The “nuclear” option, eg. cutting payment of benefits. Retirement funds, already largely underfunded prior to this meltdown, have taken huge hits. Univ of Ca (largest in US) lost 22% plus in last 3 quarters. New Mexico’s 2 largest public funds almost as bad. With returns +/- 0% currently, not so hard to do the math. And as with Enron and now AIG, what always happens is happy comforting talk until the well is dry and the final edict comes: sorry, no more money for bennies.
FWIW, my parents are 88(dad) & 87 respectively. Dad has Parkinsons, on a walker, but 100% lucid and doing well. Mom is the energizer bunny… I think of her as Carol Burnett on acid. Mom had 30+ yrs @ BofA in SF before they were absorbed into current monstrosity. Her retirement is gone now, as are her bennies.
Dad worked at LLNL 40+ yrs as ME. His med bennies cut (but not eliminated) @ end of last year. I’ve been watching Univ of Ca. Bennie management (they’re in charge of LLNL retirees up until ‘08) and the losses are huge. Aside from fact management of that fund was handed over to Southern Ca. crony associated w/Ward Connerly thus displacing one of best fund managers in US back in (I think) 2000, this shop (Connerly’s buddies) has gone for high management fees and risky investments: they jumped into tech bubble just in time to catch the crash. They went massively into CDOs… somewhere around 33% as best I can figure from ancilliary evidence (they don’t publish nor disclose individual buys… they always did under previous management). Anyway, I’m currently in Spokane cashing my folks out of whatever we can get for their house so they have the capitol in anticipation of dad’s bennies going poof, and we’re moving ‘em in w/us in Albuquerque.
I’ve been trying to convice them to do this since last March… told ‘em house value was in jeopardy and explained to them exactly why (just as it’s unfolded). Gave ‘em the data and all that, but they didn’t believe it. They thought their lovely little house on edge of US forest here was impervious to housing price slump. Now we’re selling @ firesale price because they believe now that it will get worse.
And my folks in better shape than a whole lot of others that I know their age… I know a lot of seniors, and I can tell you dozens of stories much worse than my folks… 50/60/70% of their sole source of income (mostly mutual funds) gone, and they’re scared to death w/no help on the way.
And nobody w/a voice talks about this.
So anyway, a few more shoes to drop:
* insurance companies: been a few articles lately suggesting they’re at risk of CDS default, but hasn’t hit yet. Seems beyond plausible, as the vendors of those things had tentacles extended everywhere… another thing that doesn’t get talked about. It was lobbying arm of JP Morgan, through several layers of “connected” political handlers, which sold New Mexico the derivative funding financing which derailed Bill Richardson’s nomination as Commerce Secretary. One digs through the arcane financials that track this kind of stuff, you find this endemic. In this case, NM has had to fork up millions to meet bond payment requirements these derivatives have defaulted on. So Insurance I think, next shoe to drop.
* BO’s stimulus: there is no mechanism for delivery of $$ to intended target. We have in ABQ (from memory) $13m awarded for city transportation. Turns out ABQ has already allocated that money to buy Canadian made buses. So for ABQ trans, this stimulus $$ translates into purchase of a few buses made across the border.
I’m in Spokane now tieing up biz for my folks and don’t have my links, but I’ve got referendes to a couple dozen similar early outlays across the country similar to this. So it’s really a stopgap measure… survival $$, but certainly not a stimulus.
* Lastly… I’ve said over & over on this forum the magnitude of the CDS fraud is breathtaking, much bigger than most people understand. WS has literally evaporated +/- 4yrs worth of US total GDP. The problem is systemic, and the rot in the system has not been addressed at all… not at all.
Geithner’s proposal to match funds for investors willing to buy the junk US Treasury has assumed on our behalf throws more taxpayer $$ at a problem that’s got USD on brink of default, and fixes nothing. Only reason I can think of for this is a hope they can get housing prices back up, if even a bit, so as to minimize CDS losses when they’re brought onto the books.
Problem is, we’ve shipped so much of our economy offshore we just don’t have an engine that will support the kind of income required to pay those rebounding prices. This is a price being payed for W’ extreme trickle down economic model. Investment in kinds of things to regenerate such an econ engine is nowhere in sight, certainly not in BO’s stimulus or any of his proposals. Rather his $$ and his TARP allocations are just going into rainy day bank accounts of the fraudsters who perpetrated this whole mess.
So we’ve got big problems not being addressed @ all by Washington/BO. Big problems. AFAIC, BO’s not even to the starting line yet. And FWIW, this is the same stuff I’ve been saying on this forum and elsewhere since last August… and I’m very sorry to say it’s mostly come to pass.
So that’s just a few of “shoes” that IMO will drop unless things change in a big way & do so fast.
Yves’ saying same thing today:
I can’t stress how important this is. BO has said in last week (my summary) “we can’t build an economy on housing prices”, yet by throwing his lot into financing CDS issuers (AIG “counter parties”) he is banking on just that. To put it another way, it puts Treasury in position of making a bet (housing prices) as opposed to re-establishing sound finance/lending/banking/investment policy & oversight.
It necessarily requires US Fed bet on WS CDS issuers, and supports their desire to increase CDO book value by non-market (gov intervention) forces which, in this economy, will not hold.
It also further underminds BO’s claims to be taking action preventing this kind of thing from happening again: eg. need to “prevent” reoccurence has been screaming for action since before election, yet he mentions it only on cusp public outrage over a few bonuses.
Whole thing looks like a fuck you to public AFAIC>
Mechanics of how Obama became joined @ him w/same crowd of WS crooks I don’t know, but clearly that’s the case
Goldman people were his biggest bundlers, Wall St. overall by far the biggest proportion of his bundlers. What made the Obama fundraising different and record-breaking was the addition of so many genuine individual small and medium donors to the fetid corporate rake-off.
Time to tell the truth.
Bullseye, William.
Thanks bmaz.
Dugg.
We can’t fix it, until we know the full depth of all the problems.
Since we already own 80% of it, that shouldn’t be a problem.
Trasnparency first.
Might I suggest that even before that we legislate new legal definitions and constraints for legal corporations?
That would take a huge whallop out of these messes in one fell swoop.
You may well be right.
I think right now the deer-in-the-headlights is the financial services industry. I’d like to see Glass-Steagall brought back and much heavier regulation for deposit-based institutions, much more like utilities are currently regulated.
Jack Welch was just talking as though the whole premise of share-holder value has evaporated.
Jack Welch Elaborates: Shareholder Value
Welch told the Financial Times the emphasis on shareholder value is “misplaced.” I don’t like neutron Jack, but I think his analysis here is pretty good. Net income is driven by the relatioship between employees/products on the one hand; and the customers on the other. Profit margins are so narrow, I’m not sure many global industries can afford the investment to drive shareholder value. They have all they can do just to preserve their customer base.
B-b-but you see, that would be *nationalization,* and we can’t have that! It would be socialism!!! (are you scared yet?)
The present strategy is to buy up most of a company’s shares, making capital infusion, but then eschew telling the felons who run the place how to sail their ship.
Pfah! FDIC knows what to do.
Obama should use this moment of magnified managerial malfeasance as the opportunity to say, OK, since they have demonstrated incompetence, we can do better.
Bob in HI
The #1 rule guiding this whole circus seems to be “The extremely wealthy must remain extremely wealthy, whatever their level of incompetence or criminal activity, because otherwise they will be very cross. And very cross formerly-wealthy criminals and con men is much worse than a complete global economic meltdown.”
That about right?
Yeah, I think you said it very well.
Imgagine what a loss in relative wealth can do to a self-image.
That sounds about right.
This intellectually insulting shell game was completely predictable. They’re going to add money to aig’s bill that will never be repaid unless you believe that aig is going to repay back $170B and counting … mind you the INDIVIDUALS that got this money keep it and won’t be paying it back. What mind-splitting nonsense! tarp, talf and now another bullshit little scheme by this jackass!
Z
Obama needs to step forward and take charge. They are out of control. He needs to act decisively now or this is never going to stop.
Geithner is part of the problem. He has to go. And AIG has to be nationalized.
Banking is not rocket science. Neither is insurance. I’m sure lots of people will offer to step forward to help reorganize the company.
No more pissing in the wind.
Sounds like we need an FBI Wall Street Task Force, composed of all the financial regulatory compliance auditors and examiners, FBI Agents, and Federal Special Prosecutors we can put on the case.
People who were given our special trust – handling our retirement savings and our home values – cravenly dove-in and robbed us blind. They should be questioned and held responsible for their answers and their actions.
If the millions of people in Financial Sector jobs in New York want to remain in a viable industry, they should fully and whole-heartedly endorse a thorough and complete investigation to root-out and prosecute the Bad Apples. They ‘know’ what went wrong – they’ve just been keeping quiet about it because those Bad Apples, coincidentally, appear to be the biggest players.
For the sake of our future investments, We need to know whether we can Trust Wall Street anymore, or not. And how can we know if we don’t find out what went wrong, and ascertain whether there’s anything of integrity actually left to save. Did the system go bad? Or was it the work of a conspiratorial few?
Let’s put the G-men and G-women on them and get to the bottom of this sordid tale of human greed.
What? What about using NSA data to chase prostitutes who are dating Democrats? Who will perform all that surveillance on high priced call girls?Excellent point.
Right on! Make that a Joint FBI/Treasury/DOJ/Commerce Dept task force.
Bob in HI
the reason why they’re all over the road is simple: they don’t want to retrieve the bonuses. period. look at all the wishy-washy contortion when their motivations are just so transparent.
I wish the cowards would just come out and say it:
u r under rule, u r our subjects, we do not represent u
every mind-splitting, deceitful little scheme they come up with to funnel our money to these crooked banksters who have done so much fucking damage to this country is constructed for the purpose of concealing that damn fact.
Z
agreed.
i wonder if team obama will be fielding non-planted questions on his website, just to, you know, preserve the illusion of feeling our pain.
They need to install a Volcker or Stiglitz as a deputy at treasury to be Geithner’s Cheney
As distasteful as it would be, giving Geitner that graceful way out would be fine with me. Somebody has to get this right, and if Geitner can ‘resign’ after a year of secretly sitting on the sidelines so ‘he could spend more time with the family,’ so be it.
Stiglitz makes a lot of sense. I’m not sure Volker still has the energy, but he’d sure be an improvement.
Everything I read suggests Geithner is just Larry Summers’ errand boy, I’d like to see both of them booted out.
It almost seems like someone has a gun to Geithner’s head.
What does the administration know about all this, when did they find out? and why are they covering it up?
By coincidence, this will be in tomorrow’s Milwaukee Journal Sentinel. It vividly shows the positive impact that food stamps have on the working poor. They have more money to make the rent and pay for transportation to work.
Recovery funds to increase food stamp payments
Corporate America is fully in charge of this country. The President is just the puppet corporate America pays to pull the strings to keep the money flowing. It is evident in the personnel Bo picked for treasury.
AIG in a galaxy far, far away
It took three different telescopic images composited together to create the true picture.
http://antwrp.gsfc.nasa.gov/apod/ap090317.html
The earthbound AIG is neither so easily described nor cleaned up.
Although Spitzer’s take in Slate comes close to the mark. http://www.slate.com/id/2213942/
And now for something completely different…
http://narcosphere.narconews.c…..ty-outrage
I think Hilzoy nailed the entire outrage thing, and she is not one of the usual suspects. That these folks are being bailed out and still expected their bonuses to be paid by ordinary people to hold up the company should make you angry. But Bob Gates has identified me as living in a glass house so I can’t be taking up torches and pitchforks for myself. I know if this is cut and my husband loses his job no one here up to and including Spencer will be crying for me. I would barely be crying for me myself.
Bank Robbery…In reverse…the banks rob the people.
Geithner, Paulson, Summers Liddy exhibit totally lawful behavior, per Newtons 3rd Law of every action begets equal/opposite reaction.
Thus we understand reactionary and “The extremely wealthy must remain extremely wealthy…[editing Lazlo at 18]
Breaking from the Wall Street Journal
Hedge Funds May Get AIG Cash
Some Bailout Money Is Set Aside to Pay Firms That Bet Housing Market Would Crater
I bet that some of “hedge funds” are actually some of the major brokerages such as goldman sachs. This is probably what they fear so much. Their whole story/excuse on this whole reckless venture with all this mortgage-back security shit/MBS they were creating and dumping on the public was the ludicrous claim that they thought the housing market would go up 4ever. Right … you’ve reached so far down for buyers that you are now letting people buy houses with no proof of income, no down payment, no proof of anything … it’s practically fog-a-mirror-buy-a-home … where the hell are you going to find your demand from next? Where are you going to find buyers at? Are you going to fucking grow them in petri dishes?
If it is revealed that they positioned themselves for the fall, then they lose that lame excuse and they are open to charges of fraud. that is, if their government would ever investigate them and prosecute them.
Z
So, they probably robbed us on the way up in the housing bubble … robbed us on the way down with their shorts … and then they robbed us again to cover it up.
Z
Thanks
What if fraud or some other crime is found in State Court? Can they just keep the money anyway? Wouldn’t it be subject to forfeiture? Those are not rhetorical questions.
“Buy this magazine or we’ll kill this dog”
Worked then; it’s working now.
bmaz, any opinions on Jonathan Turley’s appearance tonight on Olbermann?
Thought he was pissed and showed it; liked his appearance very much.
He seemed to take the “contracts are contracts and can’t be abrogated” view, didn’t you think?
You know, now that you mention it, I do kind of recall maybe a line or two kind of along those lines. I will have to go back and look for that, because I sure do not agree with that. The things are contracts; there are a hundred ways to attack them and make them defend if you really want to. Is it possible they win in the long run? Possibly, but I would be happy to take my chances on that.
I was surprised to read you liked what Turley said, because my takeaway was that he thought the contracts couldn’t be challenged, and I know you hold the opposite view.
Thanks, agree.
It is too bad the masses can’t get excited about prosecuting former Bush Administration crimes and the continual rape of the Constitution as they do about unjustified bonus perks for common parasites. Here in Canada today they were demonstrating in Calgary Alberta and throwing shoes at the site of W’s paid for speech. I am ashamed that Canadians would pay to hear this criminal’s BS.
How do good bank boards feel about (that did not get involved in the swaps, tranches and factoring of their mortgages) their competitors getting taxpayer bailouts? Unfair competition? Could they sue?
For anybody that believes that Treasury Secretary Tim Geithner just found out about the problem with the bonuses last week like the Obama Administration has alleged, check out this statement
Just to be clear, until January 26, the head of the New York Federal Reserve Bank was Tim Geithner. He, and the Administration have known about this issue for a long time. They are being dishonest about the whole deal.
Also to be clear, none of this is to say that the real threat they are not admitting isn’t so bad that their actions are proper. We don’t know, because they will not be honest with us.
Most of the global central banks are not bailing out “counter parties” for the casino banks. Krugman points out global partners have little economic cards left to play except cut worker hours and wages (”a soft landing”). The shoe to drop is a global depression. Governments all over state, local and national have upside down balance sheets and cannot “print their way out of budget shortfalls. This is a fearful hammer as food and water get scarece. barter systems will work…monetary systems not so much. US Gov revenue down 17% last month. Unemployment funds and food banks will be overcome with demand. If the rate holds we could have 30 million out of work in a year. The stimulus will not do the job.
dana milbank said that obama was smiling just prior to putting on a serious face of feigned outrage for his press conference/performance yesterday … of course with his clapping seals in the background. He used clever semantics to act like we are all getting screwed here … no dick, we are getting screwed, not you and you are part of the reason that we are getting screwed. Hell, he could barely keep himself from laughing when he made his claim of being choked up with anger … the people there had seen him smiling just a short while ago b4 his staged outrage. His claim that he was having geithner look into taking any steps necessary into getting the money back was purely sound bite material becoz it wasn’t more than a few hours later that they came out … actually reiterated what geithner had said the day b4 … and said that they couldn’t do anything about it.
his whole demeanor about this whole fiasco is pretty much “watch this, I got this all under control … I know how to deal with these outraged little people. just leave it to me, I’m good at this”. i don’t know who he thinks he is, he obviously is used to dealing with crowds of pissed off citizens being a community organizer, but this ain’t a group of less than a hundred people you are dealing with here bozo. and if I was him, I wouldn’t be so damn cocksure that I can maintain control over 300M, often justifiably enraged, variables with a bunch of meaningless words and some concerned facial expressions.
he’s losing credibility that he never had earned to begin with.
Z
Problem with Obama is that too many of his economic team has more in common with the corporatists than with the middle and working classes. Plutocrats of the first order. Hoping the public rage continues and grows forcing Obama to dump the corporatist wing of his team.
In 2008, the AIG criminals got $1,000,000 each:
http://uppitywoman08.wordpress…..n-bonuses/
Why didn’t George Bush, Paulsen, and Bernanke step in? AIG was calling them ‘retention bonuses’ back then. Oh that’s right! They wanted the next president to deal with the biggest shit pile in the history of America, you know, the shit pile that can still be seen via satellite.
And President Obama is being blamed for all of it! Yippee! He’ll be impeached by the end of the year and the republicans of America will rejoice! They have a lot of help too. Thanks conservadems for your patriotism. While the real criminals go free, you’re all going after the guy whose been in office for 2 months. Nice.
The neocons and the conservadems are too big to fail! Impeach, impeach, impeach to show us Americans how to impeach a president!
Looks like being a risk analyst pays well with the biggest insurance companies.
Let’s hope a few will squeal. After all, this is financial terrorism.
how much do you want to be that:
after several valiant efforts, geithner will “fail” to recover the bonuses. but don’t let the perfect be the enemy of the good… the important thing is that that he tried, and this administration will be more more vigilant, though not at the expense of looking forward.
Geithner needs to be replaced. Same goes for Summers. They’re part of the financial shitstorm. Obama made a huge mistake putting those clowns in.
If Obama really aspires to clean up this “mess”, appoint Ralph Nader to A. G. , I am sure he can find the gonads to bring these Hucksters to their knees. This Kabuki theater shout of OUTRAGE reminds me of the Claude Rains character in Casablanca, “I’m shocked I tell you, Shocked that gambling is going on in this establishment”.