Obama tries to stop AIG bonuses: 'How do they justify this outrage?'

zimmer · 03-17-09, 05:46 AM

[QUOTE]

Quote:

Originally Posted by PeteEU

And you do know the consequences for AIG going down right? That has figured into your partisan attacks right? You do know that most of the AIG bailout money has gone to pay off insurance that banks took out in AIG.. insurance taken out against the very assets in US homes that now are toxic?

Pain is sometimes necessary for others to learn.
It would have been a nice cleansing.

Instead the pain is delayed.

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The quote of the day comes from Marc Faber via Fleet Street News:

Meanwhile, the cop who had the Wall Street beat when the biggest heist in history was going on… and who engineered the loans to AIG and GM… is now the chief of police. Tim Geithner said he was working night and day on Obama’s rescue plan, “because we know how directly the future of our economy depends on it.”

But as our old friend Marc Faber points out, neither Mr. Geithner, Mr. Bernanke, nor any of the men who rule us, seems to have any idea what they are talking about. As Chairman of the New York Fed, writes Faber, Mr. Geithner “did not seem to ‘know’, in the period preceding the crisis, how the future of the economy depends on a sound financial system!”

Faber goes on to explain that not only did the key players fail to understand what was going on – when it was obvious to him, us and millions of others – they then misdiagnosed the problem and prescribed the wrong treatment. They thought it was a liquidity crisis; so they threw billions in cash at dying institutions.

At every step of the way, the feds have been clueless, hopeless, and defenseless. It was the feds who lent money at negative real interest rates for more than 5 years. It was the feds who pretended to “regulate” and “control” the marketplace… claiming to protect investors from fraud and malfeasance. It was the feds who licensed the banks… set banking standards… blessed derivatives because they “distributed risk more widely” (Greenspan)… urged people to buy adjustable rate mortgages (Greenspan again)… praised sub-prime lending because it encouraged home ownership… and even told consumers to “go out and buy an SUV” in order to give the economy a boost (Fed governor Robert Tier).

The feds piled up the tinder… poured on the gasoline… and lit the match. And now, what do you know… they’ve all joined the fire department!

A reply from a reader who is on the money:

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Faber makes a point that is missed by the mainstream media. They keep treating Geitner, Fed officials and politicians as competent even though they all missed the signs. At the same time, the Austrian School economists managed to see it coming and explain what would happen and why. Sadly, the public is being asked to accept the failures as saviours and is being told to ignore the individuals who got it right because these individuals prescribe actions that are not popular. So instead of choosing the Harding approach, which was painful but got the country out of trouble by ensuring that the market would liquidate malinvestments the Obama administration is being cheered on for choosing the Hoover/FDR way of meddling, which turned a normal depression into a great one that lasted for more than a decade.

Marc Faber: “The feds poured the gasoline and lit the match. Now they?ve joined the fire department - Credit Writedowns

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And you do remember that TARP was under the Republican administration right, promoted and put together by the Bush administration, a conservative right wing administration. Yea yea, I know they are not "real conservatives"... rats fleeing the sinking ship syndrome.. now we are libertarians and not conservatives..bla bla bla bs.

Democrats screamed for it.
The wrote the law.
Bush... signed it.
Conservatives opposed.

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And you do remember who and what created the whole mess right?

Freddie and Fannie.
Bush and McCain tried to correct their practices but Dems were vehement in the defense of these entities.
After all, they were Democrat money pits.

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I know your hatred for Obama and the Democrats is near fanatical state

You misunderstand a loathing of socialism with the a loathing of the man, though he is a work.

If I hated him, I wouldn't have said I liked what I heard about education.

I simply cannot stomach socialism, and he is a Marxist/socialist to the core.

Quote:

but your "side" are just as much if not more to blame for the situation the US and world are in today. It is the right, the conservative/libertarian side of the political spectrum in the US that was at the forefront of the deregulation movement that in turn lead to this melt down.

Dems were talking about the constrictions of Sarbanes-Oxley.
And lifting them.
Remember that?

I am for deruglation, but also for regulators to do their job.
Did you know Fannie and Freddie had 200 individuals looking at only these two companies for irregularities?
LOL.
That comes from Warren Buffett's mouth, and as he says... I look at more than two companies a day.

TRANSCRIPT/VIDEO PART ONE: Three Hours With Warren Buffett - Live From Omaha - Warren Buffett Watch - CNBC.com

Quote:

QUICK: If you imagine where things will go with Fannie and Freddie, and you think about the regulators, where were the regulators for what was happening, and can something like this be prevented from happening again?

BUFFETT: Well, it's really an incredible case study in regulation because something called OFHEO was set up in 1992 by Congress, and the sole job of OFHEO was to watch over Fannie and Freddie, someone to watch over them. And they were there to evaluate the soundness and the accounting and all of that. Two companies were all they had to regulate. OFHEO has over 200 employees now. They have a budget now that's $65 million a year, and all they have to do is look at two companies. I mean, you know, I look at more than two companies.

QUICK: Mm-hmm.

BUFFETT: And they sat there, made reports to the Congress, you can get them on the Internet, every year. And, in fact, they reported to Sarbanes and Oxley every year. And they went--wrote 100 page reports, and they said, `We've looked at these people and their standards are fine and their directors are fine and everything was fine.' And then all of a sudden you had two of the greatest accounting misstatements in history. You had all kinds of management malfeasance, and it all came out. And, of course, the classic thing was that after it all came out, OFHEO wrote a 350--340 page report examining what went wrong, and they blamed the management, they blamed the directors, they blamed the audit committee. They didn't have a word in there about themselves, and they're the ones that 200 people were going to work every day with just two companies to think about. It just shows the problems of regulation.

QUICK: That sounds like an argument against regulation, though. Is that what you're saying?

BUFFETT: It's an argument explaining--it's an argument that managing complex financial institutions where the management wants to deceive you can be very, very difficult. Or even when the management doesn't know what's going on, and--just take Bear Stearns. Bear Stearns had--I read it, anyway--750,000 derivative contracts. Now, you know, I could clone Albert Einstein, you know, and--many, many times and have him work 12-hour days for me and he would not be able to keep track of what's going on in an institution like that. It's--the ones that are too big to fail may be too big to manage, in some cases. And they're particularly difficult to manage if they're promising Wall Street and their investors that they're going to do things that can't be done.

These people were obviously worthless, and probably Democrats fearful of what happened on the Hill when they had hearings.
Did you know the regulators were attacked?
Vociferously.
By Democrats.
For their questions.

YouTube - Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis

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AIG got into trouble, thanks to legislation put in place and promoted by high ranking former and present Republicans, that allowed the whole derivative trading to explode.

See above.

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Thanks to Graham and his friends and the help of Clinton, AIG was allowed to not only trade in derivatives but to insure most of the banking world's own trading in mortgages that anyone with half a brain could see were not viable in a downward turning market. That is why AIG is in trouble.... it is Congress, AIG, Mortage lenders and lastly but not least, the American citizen.

Let them play with derivatives.
We shouldn't have to bail their failures.

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And like it or not, AIG does have a contract with these workers, and there is most likely not much anyone can do other than fire their asses.

Yep, and Obama wants to reneg on the contracts.

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Which in turn brings up the hypocrisy of the US business world. You are an auto worker, kiss your pension goodbye... you are in AIG, BOA or other big financial institutions and nooo you cant touch our multi million dollar bonus or golden parachute.

We aren't a Marxist society.
Different folks have different contracts.

Neither should have been bailed out.

Reverend_Hellh0und · 03-17-09, 06:09 AM

Quote:

Originally Posted by Arch Enemy

Obama tries to stop AIG bonuses: 'How do they justify this outrage?' - CNN.com

" WASHINGTON (CNN) -- President Obama said Monday he will attempt to block bonuses to executives at ailing insurance giant AIG, payments he described as an "outrage."
President Obama says AIG "finds itself in financial distress due to recklessness and greed."

"This is a corporation that finds itself in financial distress due to recklessness and greed," Obama told politicians and reporters in the Roosevelt Room of the White House, where he and Treasury Secretary Tim Geithner were unveiling a package to aid the nation's small businesses.

The president expressed dismay and anger over the bonuses to executives at AIG, which has received $173 billion in U.S. government bailouts over the past six months."

I like this move.

Hmm so a president is telling a private company how to run itself? We never should have given them the money in the 1st place, now Obama wants to step in here?

What is government control of indusrty called again? hmmmmm

bhkad · 03-17-09, 06:18 AM

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A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not? They know how bad it is. They built it.

So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company. In the end, we may actually be better off if they can figure out how to unwind these tricky investments.

http://www.nytimes.com/2009/03/17/bu.../17sorkin.html

zimmer · 03-17-09, 06:44 AM

Quote:

Originally Posted by bhkad

http://www.nytimes.com/2009/03/17/bu.../17sorkin.html

And now for... the rest of the stoh-ray.

The Whore Monger Spitzer strong arms the company and a more politically palatable director (D) is put in place. Greenberg was a Republican.

Quote:

...Greenberg was ousted some four years ago.

The widely reported so-called "accounting scandal" in 2005 saw then-New York Attorney General Eliot Spitzer and prosecutors from the federal Department of Justice pressure AIG's Board to oust Greenberg. Knowing that a corporate indictment would be a death sentence for AIG as for any insurance company, AIG elevated Martin Sullivan--a Greenberg protégé but acceptable to Spitzer and the feds--to lead the contrite and newly honest company.

The fact that it's hardly clear that any crime was committed seems not to have deterred the feds, given the formlessness of what constitutes "fraud" under federal law. (Harvard Professor Alan Dershowitz aptly describes such pressure on witnesses to implicate the feds' ultimate target as "teaching the witness not only to sing, but also to compose." The five convicted executives apparently have admirably--thus far--resisted such pressure.)

there are preliminary indications that much, if not most, of the damage was done after Greenberg's forced departure, and that in any event, the formidable Greenberg might have been better equipped to steer the company through today's troubled waters.

Sources close to Greenberg claim AIG held very little subprime paper, if any, before April 2005." Lenzner added that it wasn't until the latter half of 2005 that AIG got "deeply into subprime mortgages." Thus began the tailspin that culminated in AIG's unprecedented $99.3 billion loss in 2008.

Yet the only way the feds likely will secure an indictment of Greenberg is if they can squeeze enough of the five Connecticut defendants--who so far have shown no signs of singing and composing--and others, to read the scripts written for them.

Prosecutors Brought AIG To Its Knees - Forbes.com

WillRockwell · 03-17-09, 06:50 AM

Quote:

Originally Posted by Reverend_Hellh0und

Hmm so a president is telling a private company how to run itself? We never should have given them the money in the 1st place, now Obama wants to step in here?

What is government control of indusrty called again? hmmmmm

80% of AIG is owned by taxpayers. That's way more than a controlling interest, and AIG is no longer a private company, and as president, Obama has every right to step in on our behalf. Contracts signed by the previous owners should be null and void.

Reverend_Hellh0und · 03-17-09, 06:52 AM

Quote:

Originally Posted by WillRockwell

80% of AIG is owned by taxpayers. That's way more than a controlling interest, and AIG is no longer a private company, and as president, Obama has every right to step in on our behalf. Contracts signed by the previous owners should be null and void.

Exactly, socialism. this is sick.

btw, have you proved your claim that aig execs were all republicans?

i didn't think so.

zimmer · 03-17-09, 07:02 AM

Quote:

Originally Posted by Reverend_Hellh0und

Hmm so a president is telling a private company how to run itself? We never should have given them the money in the 1st place, now Obama wants to step in here?

What is government control of indusrty called again? hmmmmm

LOL.

That, My Good Rev is Capitalism for the Democrats.
They wouldn't know socialism if it hit them in the head.

After all, they keep asking and prodding on thread after thread for a definition of socialism like it's some never before seen animal from a Henri Rousseau painting.

It's great fun watching the squirming... isn't it?

Arch Enemy · 03-17-09, 09:26 AM

Quote:

Originally Posted by jujuman13

Arch Enemy
You are not as naive as you appear to be.

When have I appeared Naive...

besides almost every other thread.

Give me just one example
not 20
not 10
not 15
not 5
justone

WillRockwell · 03-17-09, 10:42 AM

Quote:

Originally Posted by Reverend_Hellh0und

Exactly, socialism. this is sick.

btw, have you proved your claim that aig execs were all republicans?

i didn't think so.

I think what is sick is that a small group of inbred executives receive multi-million dollar bonuses in a year when their company lost 50 billion dollars, and how dare we question it because they are the "best and the brightest". If their strategy calls for taxpayer money to bail them out and pay their bonuses, then "socialism" starts to look like the lesser evil.

I was able to learn that most of the executive level and board of directors donate to the Republican party, including the past and present CEO. Why would this be a surprise?

Reverend_Hellh0und · 03-17-09, 10:44 AM

Quote:

Originally Posted by WillRockwell

I was able to learn that most of the executive level and board of directors donate to the Republican party, including the past and present CEO. Why would this be a surprise?

Again, I am asking you for proof. So far you have none.

Please provide proof or concede you made this up.

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