AIG

[msj]

How surprising when the majority of counterparties to AIG were those civilized, socialized, regulated Europeans:FT

This nonsense. Again.

Just because Europe has a tendency for big government does not mean that they had proper regulations in place to deal with swaps, derivatives etc... just like the Americans didn't have proper regulation in place.

I have already posted an article with respect to this whereby European banks were using such financial instruments to get around existing regulations.

The world needs proper regulation and the world will hopefully end up getting it.

But then, this teaches the Europeans to trust the Americans - AIG promises to backstop certain losses and they can't do it so they have to go crying to the government to get bailed out.

Yet another market failure.

I wonder how ordinary American taxpayers will react when they learn that they have bailed out AIG managers and European banks.

I'm wondering how they feel about Goldman Sachs, a heavily politically connected investment bank at the heart of this mess, has not only received billions of direct TARP money but, apparently, another $12+ billion more, indirectly, through the bailout of AIG.

Sadly, there is enough blame to go around. How we got into this mess is an academic question only of interest if its answer helps us to get out of the mess. This is a problem for the world and it is naive to believe that government regulation is a panacea. Market players are smarter than that.

Yeah, the market is so smart they have nearly created the Great Depression II.

[August1991]

Yeah, the market is so smart they have nearly created the Great Depression II.

The market allowed us to communicate now, or would you prefer a Soviet planned, regulated Internet?

Risk is risk.

...proper regulations...

I love such kitsch phrases. Edited March 16, 2009 by August1991

[bush_cheney2004]

I love such kitsch phrases.

It goes with their expensive suits and neckties.

If the "system" failed...scrap it and start over.

[msj]

The market allowed us to communicate now, or would you prefer a Soviet planned, regulated Internet?

Another non sequitur. Surprise, surprise, surprise....

[August1991]

Another non sequitur. Surprise, surprise, surprise....

America is a society of innovation. Change is risky, but that's something that Obama never spoke about.

[msj]

America is a society of innovation. Change is risky, but that's something that Obama never spoke about.

And now completely change the topic....

[August1991]

And now completely change the topic....

Not at all.

If we lived in a regulated society, we would never have the Internet. How many tellers lost their jobs because of ATMs?

[msj]

Not at all.

If we lived in a regulated society, we would never have the Internet. How many tellers lost their jobs because of ATMs?

We do live in a regulated society and we do have the internet.

Where have you been?

[blueblood]

Yeah, the market is so smart they have nearly created the Great Depression II.

Are you advocating that gong show they have in Europe???

The markets have done a far better job than any planned economy. Countries with heavy gov't interference tend to have a higher failure rate than capitalistic minded countries.

[msj]

Are you advocating that gong show they have in Europe???

The markets have done a far better job than any planned economy. Countries with heavy gov't interference tend to have a higher failure rate than capitalistic minded countries.

Given that I have clearly said that Europe has heavy regulation and that it is IMPROPER gee, let's think about this a bit.

Hmm, does it make sense to spend a bunch of money to have IMPROPER regulation?

No, of course not.

Nothing personal but this is getting absolutely stupid.

No one is coming out and saying that capitalism is a complete failure and it's time for the state to take everything over and run everything like a communist state (well, maybe some commies are saying that but they have no credibility so who cares).

I'm tired of people purposefully and conveniently playing stupid and making up such utter BS.

Canada, US, Europe are all regulated. Banks, business, citizens etc... all have regulations in place.

We are talking about putting in proper regulations. Not a planned economy - an economy where things that should be regulated are, and those that shouldn't be are not.

A system that allows banks to lend money to the point where the bank fails is not a properly regulated system (and, is, in fact, a market failure since the banks skirted around regulations in order to do this).

Edited March 16, 2009 by msj

[August1991]

We do live in a regulated society and we do have the internet.

Where have you been?

Properly regulated? Is our society properly regulated? [/sarcasm]

----

msj, I'm not a libertarian (so I think that a civilized society requires a State) but I question how any government can manage/regulate the State's affairs.

PS. Thankfully for the rest of us, Americans don't live yet in a regulated Soviet society.

Edited March 16, 2009 by August1991

[WIP]

How surprising when the majority of counterparties to AIG were those civilized, socialized, regulated Europeans:FT

Now, doesn't the fact that these European banks (and Wall Steet banks) viewed AIG credit default swaps as a safe means to increase the amount of leveraging in the markets, show you that Greenspan was wrong, and they should have been regulated right from the start?

Obama and Geithner approved those bonuses.

And that makes it okay?

I wonder how ordinary American taxpayers will react when they learn that they have bailed out AIG managers and European banks.

Sadly, there is enough blame to go around. How we got into this mess is an academic question only of interest if its answer helps us to get out of the mess. This is a problem for the world and it is naive to believe that government regulation is a panacea. Market players are smarter than that.

No, it's only academic to the people who won't admit that markets are not always self-correcting and that banking deregulation and the refusal to regulate new derivative investments created this monster.

[blueblood]

No, it's only academic to the people who won't admit that markets are not always self-correcting and that banking deregulation and the refusal to regulate new derivative investments created this monster.

But they do self-correct, just not on the time scale that you want.

I'd say poor people with an inferiority complex created this monster.

[Topaz]

Today, on the "the view" the women agreed that AIG CEOs shouldn't get or very little bonuses because they didn't do their job and put AIG at risk and had to get a loan from the government. It seems like these CEO's, whose company got into trouble aren't the brightest and should have done more to save their companies. These guys didn't earn the 100Mil+ bonus and I hope Obama can stop them from getting it!

[Alta4ever]

Today, on the "the view" the women agreed that AIG CEOs shouldn't get or very little bonuses because they didn't do their job and put AIG at risk and had to get a loan from the government. It seems like these CEO's, whose company got into trouble aren't the brightest and should have done more to save their companies. These guys didn't earn the 100Mil+ bonus and I hope Obama can stop them from getting it!

The share holders will dump the CEo's, obama doesn't need to do anything, the market will take care of it.

[Riverwind]

The share holders will dump the CEo's, obama doesn't need to do anything, the market will take care of it.

AIG should have been allowed to fail if we wanted to market to 'take care of it' and those money grubbing executives would be out of work. I am very much in favour of any sort of incentive that will make executives very fearful of working for a company that needs a government bailout. A law that allows the government to re-write employment contracts to deny bonuses and other perks would more than appropriate. Edited March 16, 2009 by Riverwind

[blueblood]

AIG should have been allowed to fail if we wanted to market to 'take care of it' and those money grubbing executives would be out of work. I am very much in favour of any sort of incentive that will make executives very fearful of working for a company that needs a government bailout. A law that allows the government to re-write employment contracts to deny bonuses and other perks would more than appropriate.

Gov't officials on the board of directors directly proportional to how much they contribute vs. the financial shape of the company.

% ages of earnings going to the gov't coffers on top of taxes in order to pay for the bail out.

I have no problem with the gov't playing a "dragon" when people want the gov't to pony up cash.

[Oleg Bach]

If it's in the contract to pay a bonus to reward profits made, then the contract should be fulfilled. If there is no profit or even a break even situation - then it is clear that there is no money for a bonus...no money no bonus. To pay a bonus to the upper and middle management with tax payers money - is stealing. Why does some one who has nothing to do with a company have to act as an employer when they are not? How can it be that there is a government that is to represent the people and manage the common purse...has the right to maintain a class structure that is inferiour - Yet it seeks to keep what is in eccense their friends high on the food chain - This is very artificial and is part and parcell of the money religious system.

Here's what it is with this bail out thing.

The upper class - and I use that term lonely are practicing fiatism - They declare they are the upper class and we believe them - they have no money and we have no money but they insist on maintaining the status quo.

DECLARATION - One poor man states to the other poor man - 'I am rich and YOU are poor - serve me...I am your master"

Not likely..

[Wilber]

Most of the guys getting these bonuses were the ones at the core of the financial products division that dreamed up these scams. I heard someone make a good suggestion today. Refuse to pay the bonuses and let them sue for them. Listening to them explain why they deserve them in court should make for good entertainment.

[Riverwind]

Most of the guys getting these bonuses were the ones at the core of the financial products division that dreamed up these scams. I heard someone make a good suggestion today. Refuse to pay the bonuses and let them sue for them. Listening to them explain why they deserve them in court should make for good entertainment.

If AIG was allowed to go bankrupt their contracts would be worthless. In fact, I think Chapter 11 allows companies to insist on re-opening employment contracts and AIG only avoided chapter 11 because of the government involvement. If Obama really means what he says he would change the law to make it impossible for these guys to sue.

[Oleg Bach]

If AIG was allowed to go bankrupt their contracts would be worthless. In fact, I think Chapter 11 allows companies to insist on re-opening employment contracts and AIG only avoided chapter 11 because of the government involvement. If Obama really means what he says he would change the law to make it impossible for these guys to sue.

These corporations are the same ones that donated to the Obama election campaign. He may do his usual righteous and indignant oratory - but how is the public to know if the bonus's go through or not? And because the courts that are just as corrupt and useless and control by the same people...and executive can file suit - and he will probaly double his bonus once the personal and punitive damages are added..there is no way to get out of it - the system is controlled and Obama is a parrot like Bush and still working for the same team...They will get their bonus - or better yet - their tribute from the poor working stiff - who will work for less for the next 30 years so some jerk can drink fine wine and get his son a new Porche every year.

[Shady]

Obama Knew About AIG Bonuses Day Before They Were Paid

President Obama was informed about the $165 million in bonuses due to employees of the American Insurance Group the day before they were paid out last week, the White House disclosed late Tuesday.

The president did not publicly express anger over the bonuses until after they were disclosed Sunday in The Washington Post.

Washington Post

So apparently Obama didn't express any displeasure until after negative public reaction.

[punked]

Obama Knew About AIG Bonuses Day Before They Were Paid

President Obama was informed about the $165 million in bonuses due to employees of the American Insurance Group the day before they were paid out last week, the White House disclosed late Tuesday.

The president did not publicly express anger over the bonuses until after they were disclosed Sunday in The Washington Post.

Washington Post

So apparently Obama didn't express any displeasure until after negative public reaction.

This is Shady this is your chance to make it stick. Stick with this keep throwing this up forget your other stuff and stick with this. Although this 165 million came from the 85 billion Bush gave to AIG in September but this is your chance so keep with it. I don't think it sticks when Obama taxes 91% of the bonuses and gets almost all the money back. Will you post that article when it happens?

[Shady]

In a way you're right. These AIG bonuses have been known about for several months, and were scheduled to kick in at this time. So either the Obama administration is lying, or they're incompetent. It's one or the other. I'm leaning toward incompetent, because it seems to be their calling card. I can't think of a single thing they've handled well since inauguration.

[punked]

In a way you're right. These AIG bonuses have been known about for several months, and were scheduled to kick in at this time. So either the Obama administration is lying, or they're incompetent. It's one or the other. I'm leaning toward incompetent, because it seems to be their calling card. I can't think of a single thing they've handled well since inauguration.

No that is not what I am saying. Bush gave AGI 85 Billion but continued his failed philosophy of "companies can regulate themselves" so these bonuses haven't been known about becuase the US tax payer bought a 80% of the company but chose the option of knowing nothing about the iner goings on. I agree when Obama took office he should have made it a priority to get some regulation over this company which they gave 85 billion too but by that time AGI already had the money with no strings attached. See this goes back to what got them in this mess in the first place regulation. The government has a roll to play and Bush never thought they did. Don't worry though they are going to tax the bonuses back and you can then celebrate Obama.