(…) more likely they were an attempt to lock in their riches before things started falling apart

AFAIC that’s a given, and has been a given going back through entire structure of this stuff… all the way to loan originators: eg. Countrywide & such, and in particular the egregious violations they perpetrated in their loan issuance. That they sold various flavors of ARMs to people who qualified for fixed prime loans for no reason other than a near doubling of originator’s commission (and this only one part of their transgressions).

That US has a financial system allowing such extraordinary predatory practices, running amuck in a saturating fashion sufficient to bankrupt a country (and much of the world), and all for huge profits of originators serving no purpose but their own profits at expense of… everything else,…

Seems clear as day that

lock in their riches

is a strategy locked into Wall Street and US financial system in general. This one’s just a sign post along the way.

And none of this WS/Financial System lock in their riches feature has been addressed by BO’s treasury, by congress, by US AG, rather process of refinancing all these guys is described by Geithner as “fixing our financial system”. By everything I’ve seen, lock in their riches is an assumed practice of this system and US Federal government is operating on that assumption and ensuring it’s preservation.

It is a blatant Emperor has no clothes faint, and being sold to an ignorant US populace as such.

…

Sometimes it seems to me one has to break things down to their most fundamental parts from time to time in order to be reminded of the most basic assumptions which, over time, seem to be assumed as a given. This things become ingrained as habit… relied upon consciously or not, yet mechanisms for reality checks sometimes evaporate.

In this case, I’m thinking of currency… what it is & how it exists.

There is no basic value in currency itself. The value assigned to it is by agreement, explicit or implicit. In simplest forms of trading goods, the parties of a trade agree on the value of what’s traded, and by agreement a transaction stands. They can use beads, feathers, or simply the bartering of the goods as it’s own currency.

Ok, so we have transactions. Next, we add a feature of hard currency… coins, paper etc. which is assigned some agreed upon value. Societies of various sophistication provide some type of agency to manage this currency. It can be government, a king… whatever. The purpose of overseer of currency is to maintain said currency’s equity in relationship to underlying value of goods/services it represents.

So there is value entrusted to a currency, the value is agreed upon at some point in time, and the guarantor/custodian/overseer of said currency assumes responsability for maintaing integrity and equity of this currency.

This process is as old as the sun. Entire book of Leviticus meticulously lays out a basis for currency structure… from rewarding (paying) for labor to the trading of goods. Obviously, Leviticus was written in response to abrogation in value of trade… inequity, exploitation, fraud etc. Nothing new here.

Now we have a currency. We have agencies to oversee it. Let’s call the currency the USD. Let’s call the agency the US Fed & Treasury.

Next, we add a concept into this financial system: banks. Banks are entrusted as a repository for currency. They are assigned fiduciary duty, written into law, which require of them custodianship of currency they accept for deposit. The idea here is these banks are safe places for currency, and their management of said currency requires they scrutinize prospective borrowers for integrity, their own underlying capitol, viability of projects the loans are funding…. etc. etc.

So just as the currency is agreed upon to represent a given value, the agreement is extended by banks into a larger market place which places honored trust of said banks to maintain some approximation of that value in loans (commerce). Call this (loans) an added layer of abstraction: it relies upon the underlying integrity of presumed agreements of currency relative to value of goods/services represented by said currency.

Ok, so we get more and more banks. We create agencies to oversee and ensure integrity of the currency and banks. We create laws, as best we can, as guidelines for maintaining these agreements. People entrusted with positions of trust oversee and enforce these laws (agreements).

The world grows, populations increase. A few 100,000, then a million, then 10’s of millions, then 200+ millions, then global billions of people… all participating in use of this currency and financial system upon which it is built, and relying upon it’s integrity.

This system’s purpose is to maintain a close approximation valuing the fruits of all it’s participant’s labor… sometimes for a lifetime. It assumes, and in fact is written into law, that said currency will be managed by agencies such that these most basic agreements are maintained.
…

So fast forward: we have now, with Lehman/AIG/Merril and all the rest, a situation where K-Street has bribed the overseers such that huge piles of currency is chanelled to these guys in a way that bypasses agencies entrusted with maintaining integrity of said currency. They behave as though the currency represents value in and of itself, ignoring the stack of agreements whereby integrity of the currency is tied to value of goods/services it is intended to represent.

This new wave of investment banks make up stuff… absurd abstractions of goods/services vested only in their own concepts with no underlying value whatsoever. These abstractions are sold to a public, as evident in current financial meltdown, as having intrinsic value relative to currency, in and of themselves.

These abstractions fail the value test by every slice of the pie, so said investment banks further bribe overseers to ensure nobody can see anything about the functioning of these “financial products”, rather leave a public reliant on only their marketing of these things. They bribe public institutions, they bribe private institutions (ratings agencies) upon which generations of financial system evolution has come to rely upon.

Then they create momentum to reverse the flow of currency through this system. Whereby said system relies upon flow of currency into banks by legitimate and agreed upon production of goods and services, built over time by 100’s of millions of people, with a ever growing collection of banks entrusted with custodianship of this growing volume of currency loaned out to viable enterprise…

These investment banks change the game so that they become de-facto banks… they get control of piles of currency. They bypass due diligence. They take what they want from the pile, and create a culture
which believes a myth they have created wealth this pile of currency represents.

They make up valueless financial products, lie about underlying value (assets), sell this vapid junk wordlwide through this financial system… essentially reversing the flow of currency from to them to from them. The generations of checks, balances, oversight, maintenance of currency integrity… all bypassed by smoke and mirrors so that the finacial system becomes their marketing conduit rather than a regulated source for them to tap for legitimate enterprise.

Along the way, these guys bribe the lawmakers. They write legitimization of their fraudulent endeavors as needed in their abstracted world to give abstracted protection to fraudulent endeavors, then they pass these screeds to K-Street lawmakers while stuffing said lawmakers pockets w/sufficient amounts of currency required for lawmakers to forget and ignore just exactly what that currency is, what it represents, the agreements upon which it has grown and prospered… they just write the laws as requested ver batem to give foundation less legal protection to an entirely corrupted financial system which these same guys have tapped to drain the collective real wealth of all that labored to build all this largely reliable system.

They convince themselves they created the wealth, and they act as though they deserve to be it’s custodians because… well, because they say so. And because there are so many layers of sophistication in this system, and because it has become so large, and because these guys have bought off the overseers and eradicated the barriers to stealing this currency, it has all happened out of sight & out of mind.

So now, looking at these AIG bonuses… there’s knashing of teeth because the underlying wealth of our currency as been stolen. The thieves have gotten law written to protect their theft, and elected officials everywhere echo said laws as though the are foundational, to justify said theft.

The real wealth is gone, the only functioning vapid remnants of it remain in the fragile but yet unrealized (by public) assumed agreements that made it all possible… agreements that have been obliterated by any measure of objective consideration. The realization that said agreements are have been abrogated is backing up to the tellers in all the banks who give those who entrusted them the bad news: no $$ left to loan, no savings left to tap on rainy day, and no means by which to recover said value because the thieves have built legal protection at multiple checkpoints upstream preventing recourse.

We now have BO’s appointed custodians moving piles of currency… currency long sucked dry of real value, right back to the thieves because the thieves have told them it’s needed to “fix the financial system.” These current piles of TARP/Stimulus currency is funded not by US wealth, but rather by future earnings of those who’ve had their savings plundered … eg: taxes. These taxes, borrowed against the future, are the latest funding for the investment banks.

And incredibly, the gradual eradication of currency integrity, from the most basic of it’s accumulated sophistication and entrusted institutions… all originally bound by agreements intended to maintain said system’s integrity… gone. It’s gone. Yet the funders… eg. the public, still being told by our elected overseers that their wealth, represented by our currency, is banking of future earnings… borrowing vast sums there is unimaginable prospects of as yet unrealized labor/work/production as finance system to continue funding the thieves.

And most of US public buys this sale.

We’ve just had an election… promises of change. At least implied promises, as BO never really gave any specifics. We all believed he had the right stuff. We believed he understood the big picture, and that he had the spine, intellect and integrity to do the obvious… clean up and cut out the cancer, and rebuild with foundations self-evident and long understood. We believed he would call out the thieves, and hold them up for what they are. At least I believed all this.

Instead, in the midst of the greatest caper in history of mankind, our guy… HOPE, has thrown gasoline on the fire and continued the theft beyond existing assets to assigning us all future bills, just so the thieves can have the comfort they think they have deserved.

Oh well, it’s only money.

Why would those who FUBARed their business stick around to clean things up, especially if doing it properly exposes or documents their wrongdoing? As it turns out, some number of them left with the cash anyway. It’s hard to believe these were paid to help fix things; it seems more likely it was to keep things quiet and apparently rolling along as usual.

Which means AIG had 12 months and 2 CEO’s that could and should have cancelled these bonuses and didn’t. Extremely poor judgement.