Comments on: AIG “Robs the Bank”

By: Aig bonuses

Aig bonuses — Sun, 15 Mar 2009 23:15:58 +0000

Keep up the great work. I enjoyed it all and agreed with 99% of it!

By: Larry Doyle

Larry Doyle — Sun, 15 Mar 2009 17:40:00 +0000

Why is it that in legislation written in the Senate Banking Committee and proposed by Senator Dodd regarding compensation it did not include language specifically for AIG?

They knew this issue a long time ago. The bonuses being delivered here largely center on the AIG Financial Products division that generated all of these losses.

This is a travesty!!

By: TeakWoodKite

TeakWoodKite — Sun, 15 Mar 2009 16:20:21 +0000

LD, correct me if I am wrong, would not these
contractual obligations be on the balance sheet as a liability?

Who are the people doing the examination
of these books? One would think that anything of a political nature that would create “problems” would get kicked upstairs.
One would think that BO would use that to his
advantage politically. Tone deaf BO.

By: Larry Doyle

Larry Doyle — Sun, 15 Mar 2009 15:34:54 +0000

I admire your dogged determination in both raising and following through on these points.

My sense is that the rise in FHA defaults is as a result of mortgagors who had taken sub-prime mortgages earlier this decade shifting to FHA insured mortgages now.

By: fiscalliberal

fiscalliberal — Sun, 15 Mar 2009 15:26:39 +0000

LD – kind of off topic, but there is a issue currently happening with FHA. There was a newspaper article talking about how FHA was experienceing new payment defaults on new loans. I notified my congressman Gary Peters who sits on the Barney Frank Financial Services committee. His staffer said that they talked about it, but FHA needed more money for enforcement.

I reminded him that the FHA administrater testified how he had a mechanism in place to eliminate bad loan originaters. It follows that the next news story should be that FHA is getting rid of the people who wrote the new 2008 and 2009 loans.

This does not take new money, it is spending the existing money better. It looks like FHA is another SEC buracracy.

Our government continues to be broken. I will have more later in the day. Beautiful sunshine here. Spring has sprung, the grass has ris – wonder where the flowers is.

By: Larry Doyle

Larry Doyle — Sun, 15 Mar 2009 14:38:03 +0000

It once again defies logic that Treasury was not FULLY aware of these so called contracts.

I will share with you that when I was at JP Morgan we had contracts for a lot of people as we were building our department. The firm “strongly” encouraged those holding the contracts to renegotiate them after the firm had a tough year. There was NO government money involved. Every single individual “renegotiatied”.

These AIG payouts are a travesty.

By: Mountainaires

Mountainaires — Sun, 15 Mar 2009 14:28:49 +0000

I see Treasury has complained and they will seek to redress this contractual bonus issue. Of course, we may never learn how they do this. But, AIG’s Liddy will be testifying on Wednesday.

http://www.reuters.com/article/newsOne/idUSN1448418420090315

By: Mountainaires

Mountainaires — Sun, 15 Mar 2009 14:20:58 +0000

Who is “outside council” and when will said “council” appear before the congressional hearing to answer questions publicly regarding this contractual “obligation” to reward the “financial products” division? Who will receive these bonuses and when will they appear before said congressional hearing to identify themselves?

Transparency in government, remember Mr. President? You said you would name them and shame them. Let’s have at it.

According toThe Wall Street Journal, AIG (AIG) will pay-out $450 million in bonuses and the money will go to people in the firm’s financial products group, where may of the insurance company’s losses originated, will get the cash.

The paper writes that AIG has told that government that “outside counsel” had advised that the previously agreed to payments to employees at the financial products unit are “legal, binding obligations of AIG.”
Too bad the government can’t void those agreements. If it can, it should. The news will probably turn a number of members of Congress against approving more capital for saving American financial firms. That, in turn, will make the process of stabilizing the credit markets more difficult.

AIG has the chance to turn Congress, and the public, completely against salvaging the financial firms essential to the national economy all by itself.

Douglas A. McIntyre
http://247wallst.com/2009/03/15/financial-outrage-of-the-week-aig-aig-to-pay-450-million-in-bonuses/#more-27003