AIG- $90 Billion to Foreign Banks and MILLIONS in bonuses for jobs well done?

[Minor Axis]

AIG: $90 Billion Bailout Funds Went To Foreign, Domestic Banks, Including Some Bailout Recipients.. So now U.S. taxpayers are financing the World? I understand that AIG sold insurance policies to foreign banks where hedge funds were run where they were short selling the U.S. housing market. Should the contracts be honored? And paying anywhere from $150-$450 millions in bonuses to AIG employees is total bull shit.

I'm wondering if it would have been better to let AIG go bankrupt to remove any requirement to pay those bonuses? Someone said AIG was too big to let it fail. Why not break it up like was done to Bell Telephone in the 1970s? Are our financial institutions getting too big to be healthy? Or would some moral integrity, (something we are short of in corporate board rooms) fix the problem? It sounds to me like a very good argument for more regulation not less.

NY Times related article.

 

[flipx]

Yes, this is happening a lot here in the UK with the banks such as RBS, HBOS, Barclays as it says in the article, and much more. I'm not sure of the total amount in the UK, but it's in the hundreds of billions of pounds I'm sure. Tax payers money being dumped into the banks to help them get credit flowing again. I just seen a Barclays advert on tv as well, haha offering great rates, when it tells us in the article:

Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks _ France's Societe Generale at $11.9 billion, Germany's Deutsche Bank at $11.8 billion, and Britain's Barclays PLC at $8.5 billion. [COLOR=#038258 ! important][FONT=Arial,&quot][COLOR=#038258 ! important][FONT=Arial,&quot]Merrill [/FONT][COLOR=#038258 ! important][FONT=Arial,&quot]Lynch[/FONT][/COLOR][/FONT][/COLOR][/COLOR], which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion as of Dec. 31.
The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions.

A lot of money from the U.S will be going into these banks, because they all have connections with one another, in stocks, and shares etc. Once some are affected, they all are; like dominos falling over.

 

[Alien Allen]

The problem is that AIG only had one division that was bad. The other(s) are still thriving. AIG was the safety net. It was supposed to be the last line of defense when the other banks melted down. So if you let AIG fall I can see how not giving the bailout would have been a disaster.

As to the bonuses I think Geithner was involved in drawing up that plan. Again though there was something rushed into without everybody reading everything. Obama had nothing to do with the initial bailout but he just allowed another big bundle of cash to go to AIG last month. That was the oppotunity to right the wrong. I think it is laughable the bellowing from the democrats now and the posturing that they will tax those bonus payments. I do not see that standing up in court as it would in effect be a retroactive action taken

 

[flipx]

I definitely see the point you are making Allen, he maybe should have "right the wrong". But, letting a big bank collapse in this time of an economy downturn, can be worse in the long run. There are many bat-and-ball debates to be had over what the advantages and disadvantages of letting a large bank fall, or helping it grow and trade/share. BUT, that's not what the banks want, oh no, they like their nice salaries, big bonuses, and huge pensions. This can be perfectly demonstrated by Sir Fred Goodwin, who is the ex-chief executive of RBS. Click for more on the story.

I was also just watching the second Zeitgeist movie online, through google.

Click here.

It's very interesting what it talks about in the first 15-30 mins anyway, about the Federal Reserve, money mechanics, inflation etc. Must read.

 

[Strauss]

I'm wondering if it would have been better to let AIG go bankrupt to remove any requirement to pay those bonuses?

The bonus would have still been paid but they would have had Bankruptcy Court approval. You can't keep the employee and change the terms of his/her contract retro-active. So if they intended to keep the employee the bonus would be paid. Second point, one of the first motions filed in bankruptcy is a request to approve retention bonuses so, in a bankruptcy, the key employees would have received TWO bonuses.

The problem is that AIG only had one division that was bad. The other(s) are still thriving. AIG was the safety net. It was supposed to be the last line of defense when the other banks melted down. So if you let AIG fall I can see how not giving the bailout would have been a disaster.

As to the bonuses I think Geithner was involved in drawing up that plan. Again though there was something rushed into without everybody reading everything. Obama had nothing to do with the initial bailout but he just allowed another big bundle of cash to go to AIG last month. That was the oppotunity to right the wrong. I think it is laughable the bellowing from the democrats now and the posturing that they will tax those bonus payments. I do not see that standing up in court as it would in effect be a retroactive action taken

Very good. All of the divisions, save one, at AIG were and are very profitable. Just not profitable enough to cover the loss of the one division and under GAAP standards, that one division drags down the others. But, imagine that you worked in one of the profitable divisions and, in fact, because of you the division was profitable. Would you feel like you got screwed because you did what you were suppose to. Why should you be penalized because of what happened in the other division.

BTW, Sen. Dodd (Democrat from Conn.) wrote the language in the AIG bailout bill that allowed and even approved of the bonuses being paid. Isn't that a kick in the liberal ass.

 

[Alien Allen]

The bonus would have still been paid but they would have had Bankruptcy Court approval. You can't keep the employee and change the terms of his/her contract retro-active. So if they intended to keep the employee the bonus would be paid. Second point, one of the first motions filed in bankruptcy is a request to approve retention bonuses so, in a bankruptcy, the key employees would have received TWO bonuses.



Very good. All of the divisions, save one, at AIG were and are very profitable. Just not profitable enough to cover the loss of the one division and under GAAP standards, that one division drags down the others. But, imagine that you worked in one of the profitable divisions and, in fact, because of you the division was profitable. Would you feel like you got screwed because you did what you were suppose to. Why should you be penalized because of what happened in the other division.

BTW, Sen. Dodd (Democrat from Conn.) wrote the language in the AIG bailout bill that allowed and even approved of the bonuses being paid. Isn't that a kick in the liberal ass.

Ya gotta love the hypocrisy that is in DC

The best shit money can buy

 

[Alien Allen]

It may not be liked by some but I think the fact we have large corporations gobbling up all the little businesses is very bad.

There is a degree of control lost when mega corps control things. This banking collapse would never have happened if we did not have 70% of the banking industry controlled by less than 10 banks.

We have abandoned quality for cost and this is going to destroy us if we do not find a way to change.

People bitch about Walmart but sure like the lower prices.

People bitch about a plethora of other stuff in the same regard. I can remember when one got a prescription from a pharmacist who knew who you were. If one does not think that adds a degree of care in most instances when getting meds then I would disagree.

We have abandoned the neighborhood concept. We are all strangers. IMO

 

[Tim]

It may not be liked by some but I think the fact we have large corporations gobbling up all the little businesses is very bad.

There is a degree of control lost when mega corps control things. This banking collapse would never have happened if we did not have 70% of the banking industry controlled by less than 10 banks.

We have abandoned quality for cost and this is going to destroy us if we do not find a way to change.

People bitch about Walmart but sure like the lower prices.

People bitch about a plethora of other stuff in the same regard. I can remember when one got a prescription from a pharmacist who knew who you were. If one does not think that adds a degree of care in most instances when getting meds then I would disagree.

We have abandoned the neighborhood concept. We are all strangers. IMO

:homo:


I think this is one of America's biggest problems, but how do you fix this?

I heard the other day that once upon a time when you incorporated there was actually language stating that your company needed to operate in the public's interest. But that was stripped when Rockefeller challenged the language and threatened to move his company to any state that would remove it... That was the beginning of the end.

I also think CEO's working for stock in their company is a bad idea. They need to have ownership in their companies and stock value doesn't provide that. You can quickly inflate the value of your stock while hurting the health of the company, the two don't go hand in hand. They need to stop worrying about stock price and look at the health and longevity of the company and employees.