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Old 02-03-2010, 07:42 AM
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Angry AIG To Dole Out $100 Million In Bonuses

http://wbztv.com/national/AIG.bonus....2.1466933.html

Insurance Giant To Pay Big Rewards To Division That Sparked $180B Bailout, Reports Say

American International Group Inc. is set to pay out about $100 million in a fresh round of bonuses to employees of its financial products division, the unit whose risky bets helped sink the company leading to a $180 billion government bailout, according to reports published Tuesday.

AIG agreed to cut the retention bonuses by $20 million but will still hand out $100 million Wednesday, The New York Times reported, citing people with knowledge of the negotiations.

The Washington Post, also citing people familiar with the situation, said the retention payments are for employees at the division who agreed to accept 10 to 20 percent less than AIG had initially promised them two years ago. In return, they are getting their money more than a month ahead of schedule.

"In effect, the taxpayers were propping up the hollow shells of AIG by stuffing it with money. And the rest of Wall Street came by and looted the corpse," committee chairman Edolphus Towns, D-N.Y., told Geithner.

Geithner, whose last job was president of the New York Fed, clearly was getting no cover from committee Democrats on the day that President Barack Obama was to give a State of the Union address intended to assure Americans he shares their economic priorities.

Rep. Marcy Kaptur, D-Ohio, suggested Geithner was more beholden to banking interests than to taxpayers when he ran the New York Fed and cut him off abruptly when he tried to deny it.

"You are suggesting that the people involved in this were not acting in the public interest and you are suggesting they were working for the private interest, and that is not true," he told her.

Both Geithner and Federal Reserve Chairman Ben Bernanke have recently found themselves on the defensive, both targets of political discontent and rising voter anger sweeping the nation.

Bernanke had to scramble for support for confirmation for a second term. And Geithner faced speculation over whether his influence was fading after Obama reset his economic priorities to go with a far more aggressive attack on Wall Street and large banks and began paying more attention to advice from former Fed Chairman Paul Volcker.

But if Geithner risked being hung out to dry by the administration, it was not obvious in his testimony, in which he tied to deflect repeated congressional criticism and vigorously defended his record.

"Deciding to support AIG was one of the most difficult choices I have ever been involved in, in over 20 years of public service. The steps that were taken were motivated solely by what we believed to be in the public interest," Geithner said.

He also repeated an insistence that he played no direct role in AIG deals with business partners or in withholding information about them from the public.

When Obama picked him for the Treasury post on November 24, 2008, "I withdrew from monetary policy decisions ... and day to day management of the New York Fed," Geithner testified. "I don't think there was a better alternative available."

AIG eventually received an aid package from the government of more than $180 billion. At issue is the part of this money to repay banks that were its business partners, known as counterparties, and alleged efforts to cover up details of the payments.

The committee subpoenaed 250,000 pages of documents from the Fed.

Lawmakers are concerned with revelations about efforts to keep details of the AIG deals secret. Officials from the Treasury Department and the New York Fed worked to keep the public from learning details about those deals and other AIG decisions.

"I played no role in those decisions," Geithner said. "I will take complete responsibility for decisions I played a role in shaping," he said.

But lawmakers expressed skepticism.

"Many people, including people of this committee, have a hard time believing Secretary Geithner entered into an absolute cone of silence," California Rep. Darrell Issa, the committee's top Republican, said. Issa said he had "lost confidence" in Geithner.

Democrats and Republicans took turns lambasting the Treasury secretary.

"Either you made a bad decision there, or there was the attempt to cover up one of the biggest bailouts, backdoor bailouts, in history," Rep. John Mica, R-Fla., told him.

Recalling the early controversy over Geithner's failure to pay some personal income taxes, Mica said: "You gave lame excuses then, you are giving lame excuses now. Why shouldn't we ask for your resignation as secretary of the Treasury?"

"You have a right to your opinion," Geithner said.

Rep. Stephen Lynch, D-Mass., told Geithner: "It just stinks to the high heaven what happened here."

Lynch said later that Geithner's reputation "has been hurt greatly."

Bernanke also said Wednesday he was "not directly involved in negotiations" involving payments from AIG to its business partners including Goldman Sachs and other Wall Street firms. Those negotiations were handled primarily by the staff of the New York Fed, he said.

Bernanke made the comments in written responses to questions posed by Issa.

Although Bernanke and Geithner have taken the most heat, the government's bank rescue effort began under former President George W. Bush and Henry Paulson, his Treasury secretary.

Paulson, who followed Geithner at Wednesday's hearing, defended his own role. "An AIG failure would have been devastating to the financial system and the economy," he said. "AIG could not be effectively wound down."

Rep. Elijah Cummings, D-Md., asked Paulson if he didn't realize how angry people were at wealthy bankers and Wall Street barons who he said play golf together and are always "looking out for themselves" while the rest of the country suffers.

"I'm not a golfer but I sure know that's how people feel. Congressman, you've got it. People are very, very angry. And rightfully so ... They don't recognize that what was done wasn't done for the banks" but to save the nation's financial system and economy.
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Old 02-04-2010, 11:17 PM
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Bail em out and they spend it upon themselves. Thanks Obama
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Old 02-05-2010, 03:29 AM
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Ya know.... I started to write a post about how both conservs and libs can agree that this bonus BS is disgusting but then Mr. Hixon blew it.

U.S. to Take Over AIG in $85 Billion Bailout; Central Banks Inject Cash as Credit Dries Up

http://online.wsj.com/article/SB122156561931242905.html

This Wall Street Journal article (not a lubbural rag) is dated September 16, 2008. Sorry dude, that was on Bush's watch.

I know how reality is such a problem to some of you guys. The below quote occasionally needs repeating:

It seems that Republicans these days want to have it every possible way: complain about the deficit while ignoring everything their party did to create it (Medicare Part D, two unfunded wars, TARP, earmarks galore, tax cuts up the wazoo, irresponsible regulatory and monetary policies that created the recession that created the deficit, etc.)... all the while illogically insisting that tax cuts are a necessary part of deficit reduction, and never proposing any specific spending cuts.
--Bruce Bartlett
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Old 02-05-2010, 12:18 PM
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The money was given to AIG with no strings. This is the logical conclusion of that action. The Democrats walk around making funny noises about the bonuses but will do nothing. The problem is neither party has a dick.
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Old 02-05-2010, 01:37 PM
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Angry I'm not surprised

The money walks side by side with Congress. Congress gets re-election funds from those who have the money and influence. The whole system is dirty and money flows like water between their hands.

I've lost my confidence in the system - its no longer for the people by the people. The laundry list is long with corrupt individuals who pad their pockets for themselves rather than do whats right for the people.

Congressional lengths in office should be limited to two terms. Also I've heard that one term in office gets them $90K per year retirement for life. If this is so then something is really wrong. They take care of themselves first and last. Only after they are loaded and have amble cashflow do you see them make an attempt to take pitty on the poor.

Debt is out of hand - I foresee a world crisis in the making and now we can look forward to at least three more years of hard times. The Europe market is tanking again - Euro is falling like a stone. They are buying US$ which drives up our dollar but lowers our expectactions to sell our products. It's really nasty out there and I have a bad feeling about the outcome.
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O Almighty Lord God, who neither slumberest nor sleepest; Protect and assist, we beseech thee, all those who at home or abroad, by land, by sea, or in the air, are serving this country, that they, being armed with thy defence, may be preserved evermore in all perils; and being filled with wisdom and girded with strength, may do their duty to thy honour and glory; through Jesus Christ our Lord. Amen.

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Old 02-06-2010, 06:25 AM
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Well said, Boats and Doc. Disgust with the way the government works (or does NOT work) is universal. You add pork, hypocracy and fear-mongering (to hold the attention of the "little people") and you've got your average US politician - Repub or Dem. But changing the system seems almost impossible. It would be like the fox making his own new rules for raiding the hen house - then promising to abide by them.

I remember a Tom Clancy novel published in 94 (Debt of Honor?) where the plot had the entire US government wiped out by a terrorist group that crashed a 747 into the capitol during a joint session of congress. Marshall Law was immediately put into place. At the time, the book and plot seemed really far-out but, hey...he was the "Hunt for Red October" guy. Then came 9-11.

The interesting part that I remember about the book was the the US had to create an entirely new federal government from scratch and fast. There was little time for special interests to set their hooks into the delegates that were selected by local elections that were held to tight deadlines. Consequently all of the old campaign and graft tricks (at least for awhile) where thrown out the window. Since the stock market crashed immediately afterward, all trading was suspended until the new government was setup. Before it reopened months later, all prices were "reset" to the level they were on the day before the crash. Like I said, far-out.

Reading about the entire government being fragged was unsettling, but the idea of starting over with the core principals of the constitution with new players and campaign rules was intriguing. Am I starting to sound like a renegade, or just a vet that fed up with the way the current system works? I guess if I get a knock on my door by a couple of suits in shades I'll have my answer.
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