AIG To Pay Retention Bonuses with Your Taxes

[Posting a link?]

Forum Guidelines
Posting a link? Read This!

Forgot your password? Need help?
Click Here To Contact Us

Mudflats Merchandise
AKMuckraker Amazon Store
Support AKM Merchandise

Download it here!

[Lani]

AIG is the company that arranged spa retreats after receiving its government bailout.  To show its contrition, it announced limits on salary increases and bonus for some executives.  But apparently that doesn't incude "retention" payments. AIG to pay retention bonuses to executives

One day after announcing strict limits on salaries and bonuses for its top tier of executives, AIG revealed that some of those executives will receive millions in “retention bonuses” next year....An AIG spokesman said on Wednesday that retention bonuses were different from the annual bonuses included in Tuesday’s statement.

Notes Naked Capitalism:

Do you really believe, with massive deleveraging and all sorts of big financial firms, including insurers, teetering, that AIG executives have great employment prospects these days? But the bigger issue, as far as I am concerned, is the misrepresentation, trying to claim that AIG was forgoing significant senior level comp, only to learn that they define terms a bit differently than the rest of the world does.

Thus the Great Robbery of the American People continues....

[Rubo]

I need to let my meal settle first.  This could cause serious indigestion right now! 

[trish]

what can I say?

BOHICA!


and again!

[mimi]

So when are we going to organize to stand up and say no no to this unabashed abuse of OUR!!!  money, HMMM?

[Lani]

I would like the riots protests to start now, please.  On the Bailout thread, I posted a video of the angry mob in Iceland, now a bankrupt country.

HamletsMill has posted many excellent articles on credit derivatives and credit default swaps, which are causing the international meltdown, which Warren Buffet calls the financial weapons of mass destruction, and which I call an international criminal enterprise.  Forget Al Qaeda - these guys are bringing the world to its knees.  And AIG was leader in creating this horror.  Yet now, it is bailed out, its executives reward themselves yet again, frightened homeowners are demonized, and we - the United States - are on the brink of the Great Depression Part II, taking the rest of the world with us.  I am beyond rage.  And I'm losing hope that Thanksgiving! will appropriately deal with it as his advisors are Fed Reserve & Wall Street people.  My last hope at this point that Buffet will play a major role.  Here it is in a nutshell:

Briefing: Wall Street’s hidden time bombs

Investors thought that they were getting AAA-rated securities. [Rating agencies like S&P spread this fraud, knowing lending requirements were incredibly lax, and pocketed hundreds of millions of $$ for rating C class or less as AAA.]  The sellers—caught up in the assumption that housing prices would continue to rise indefinitely—also thought they were safe from losses. Each security involved hundreds or thousands of individual mortgages, chopped into pieces, so that the risk of default appeared small. And by selling them, investment banks and brokerage firms made hundreds of millions in upfront fees and premium payments. That’s why global insurance giant AIG also jumped into the derivatives game. “It is hard for us, without being flippant, to see us losing even one dollar in any of those transactions,” Joseph Cassano, then AIG’s head of credit derivatives, declared last year, expressing a common sentiment....

Concern about financial derivatives first surfaced in the late 1990s, and congressional Democrats launched a drive to bring them under federal oversight. The effort was beaten back by Dingbats led by then­–Sen. Phil Gramm of Texas, who pushed through a law that explicitly exempted financial derivatives from federal regulation. By 2003, the pace of derivatives trading had exploded, leading Warren Buffett, one of the world’s most successful investors, to call derivatives “financial weapons of mass destruction.”

Because the well-being of the entire global financial system rested in part on a hidden world of multitrillion-dollar bets that financial regulators couldn’t control or even monitor. Indeed, since 2000, credit default swaps became one of Wall Street’s most popular products, with firms such as AIG, Lehman Brothers, and Bear Stearns selling swaps covering trillions of dollars in bonds. At Cassano’s urging, AIG became the biggest player in the field, selling protection on $527 billion in bonds.

Home prices started to fall and interest rates started to rise. When rates rose, many subprime borrowers with adjustable-rate mortgages found themselves unable to make their monthly payments. They also couldn’t sell, because the demand for houses began to crash. Very quickly, as defaults mounted, the derivatives that had made so many bankers and investors rich lost their value. In turn, firms such as AIG and Lehman, which had guaranteed these securities, couldn’t meet their debts. It was a worst-case scenario, causing the collapse of many banks and investment firms. Despite the federal government’s rescue efforts, many financial executives worry that further damage is yet to come, because of bad debt hidden in other banks’ derivative holdings. “It’s not the corpses you can see that scare you,” says one Wall Street banker. “It’s the corpses you can’t see that could pop out at any time.” ....

The impact grows.  Lenders & mortgage brokers have gone belly up, dumping employees on the unemployment lines.  Real estate agents, title company employees, banks, credit unions, appraisal & construction companies - massive lay-offs.  Unemployment means no car repairs, no hair cuts, reduced spending all around.  Wall Street firms crash.  New and used car dealers don't have access to loans.  Stores don't have customers.  Now people with prime mortgages can't make their payments either, and crashing home values have caused more people to be upside down on their mortgages. 

I'm in Hawaii.  Tourism is plummeting, and hotel lay-offs are increasing, along with reduced hotel purchases for local food and services.  Children's healthcare was slashed last month.  Yesterday, mental health services were cut 25%.  People are scared.

But AIG is safe... and their execs, who profitted from this mess and probably couldn't get a job cleaning hotel rooms here - let alone be hired as bank tellers, are getting retention bonuses.

[mimi]

All of these people who have contributed to this financial mess need to be taken out behind the woodshed for a serious flogging   The absolutely outrageous nerve of these people to expect that they will get bonuses and be rewarded in any way is just unimaginable.  Are they all insane or do they just believe that we are?

[Alex]

I think they believe this is their last chance for the free-for-all Bush has inspired over the last eight years.  Maybe they realize the era of unfettered greed is coming to a close and they want to get every last cent they can...

And, since there have literally been no consequences for anything Bush's cronies have done since 2001, they don't think they are running any real risks...

Flogging is actually too good for them, I think... and if things get really bad, they're probably in for a lot worse.

[judi]

I too am outraged...when they went on that hotel thing where they got facials I emailed both of my senators...Clinton and Schumer....told them i wanted my money back immediately with interest....
I did get a response from schumer, not clinton (other things on her mind??)...it was a form letter of sorts...he did not want to bail them out but...

and meanwhile...we are trying to figure out how to keep paying our regular, needed bills like heat, elecric, food....oh big splungers that we are....

can we organize a mass email, letter campaign?  I just think that if it were me asking anyone, family friends not to say strangers like taxpayers, for a loan I would never go on a vacation or splurge in any way with the money...how dare they!!  we need RIOTS and I will not cross it out...enough is enough...

[Alex]

I saw somewhere (maybe on Huffington Post) an article where someone said that we should require that any bank that accepts bailout money should not be allowed to charge fees on withdrawals from their ATMs... something small, something simple, but something that would show that the public isn't just getting screwed left, right, and center.

[mimi]

People really do need to say no to this kind of abuse.  I have a delinquent Citibank card and the last time they called me I told them that I considered the account settled since it was my money that went to Citibank for their newest handout.  Shut the collector right up!  And I mean it.  Same for HSBC.  These people are all a part of the criminals that got us into this mess and they will not get one more dime from me.  So There!!

Stand Up To It, People!

[betzy]

Believe me all the economists, administration et al, and Greenspan knew several years ago just what they were creating - but were hoping to sidestep it by telling us this is a different economy and all will end differently than in the past. (Or, that they would no longer be on the scene when the inevitable pandemonium struck.  )
The only way they could not know would be to know no history, never read and not be aware of congressional action on bills impacting the economy and stock market.

Take note:

The Great Depression was a result of deregulation in the banking system and a glut of foreclosed homes.  Those foreclosures prompted regulations to prevent future disasters of this magnitude. Sound familiar? 

The "safe guards" put in place to prevent another Great Depression were removed: The Glass-Steagalll Act enacted in 1933 was rescinded in 1999 and the bill to rescind it was produced by Graham (Gramm?sp? and Leach) who was McCain's economic adviser and said we had a "mental recession" and were a nation of "whiners." 

This repeal permitted the mixing of banking, investment, mortgages etc. into one institution.  Interesting,American Express was just designated as a bank on a weekend (waiving the 30 day waiting period) so they could take immediate advantage of the bank discount window for cash.

The uptick rule was rescinded July 2007 and then look at the Feds coming in to stop the shorting when the "free market" was in "free" fall. How much did the lack of the uptick rule contribute to the free fall of the financials and auto industry in the market this past year?  We will never know.

Sliding the regulatory rules out the window also caused the S&L debacle which the two Bush brothers with John McCain's help were responsible for, in great part.

Nixon took the gold standard away so the money supply could grow without the restraint of needing to be backed by gold.  Yes, our money is just a piece of paper, period.

Greenspan could have averted the chaos and recession in 2002 by changing the margin requirements at the stock market.  Why should traders be able to gamble on making thousands by spending pennies on the dollar?  When the margin calls came, because the market tanked, the brokers left their buildings because they could not keep up with the phone calls, and they had no buyers in the panic selling environment.  Greenspan said it was not his place to tell stock traders how to deal. Hello-o-o-o!  Weren't you the FOMC chair creating regulatory policy and defending your position in doing so?

The Bush Administration quit releasing the M3 numbers (the method of tracking the printing of money) about 2 years ago.  I knew at that moment their plan had to be to start printing money fast in the near future.  Guess what?  We have no easy tracking method for the public to monitor the printing because the figures are no longer available to us.  And we are not supposed to think they knew at that time that a great disaster loomed in our very near future?

Bush's buddies changed the accounting methods (content?) for both the CPI and PPI in March of 2006.  We waited THREE months for the numbers that quarter as they just kept saying they were changing their system.  I think the numbers were so bad they were unwilling to release them.  Now we really cannot compare the last 2 years numbers with previous years and have an accurate picture.

The unemployment numbers for September 2008 were revised to add over 100,000 more unemployed than the first figures released.  Since the total job losses were 284,000 how come they are so inaccurate?  Can't count, or the numbers just don't look good enough to release until a month later when a revision that is a month old will not jolt the market down at that late date?  Go figure.

Check the DOW numbers we are given daily, but remember the thirty stocks represented are not the same ones as in 2000.  If you plug in the ones that were included then, you will find the DOW would not have shown recovering numbers this past 6 years.

If I can come up with these few notable items that hugely effect our economic dynamics it would be almost impossible for anyone to convince me that those idiots running our economic industry over the past few years had no idea they were creating the horrendous climate that we are caught up in now.

I followed GW while he was in Texas as governor (all those governor records, archives, notations, and information are no longer available.)  My comment when he was appointed in 2000 was that he would take us to war and destroy the economy.  I never, ever thought it would be this bad.