UPDATE: Here's Obama today....
AIG, big bailoutee, to the tune of $160 billion, give or take, is handing out $150 million, give or take, in contractual bonuses to mouse-clicking traders deemed by the company to be "irreplacable talent."
The bonuses amount to less than .1% of AIG's total bailout package. But you would never know it if you paid attention to all the usual media and political suspects who are oh-so-up-in-arms about this most recent revelation.
The "rage", as it's being called by talking heads everywhere, is just so phony and so contrived.....it makes me feel like vomiting. Self-righteous political and media do-gooders have latched on to this populist tidbit of the AIG story and are clutching their pearls and nearly foaming at the mouth at the audacity of these failed fat cats.
First....the bonuses are nothing new....and are not a surprise...
Washington Post, March 17, 2009....
Beginning in the first quarter of 2008, AIG disclosed the plan to offer retention awards at Financial Products. The unit had already begun to hemorrhage money, a problem that would later grow exponentially. The unit's executives, fearing they might lose valuable employees in the tumultuous months to come, successfully negotiated more than $400 million for their workers, to be paid this month and again next year.
The bonuses were locked in over a year ago. There may be a case of fraud if the bonuses were agreed to BECAUSE executives KNEW AIG would need bailed out at the time they contracted them.....but good luck winning that case.
Here's how the AIG bailout began last fall under the Bush administration by Bush's Federal Reserve....
NY Times, September 16, 2008...
Fearing a financial crisis worldwide, the Federal Reserve reversed course on Tuesday and agreed to an $85 billion bailout that would give the government control of the troubled insurance giant American International Group.
The Fed’s extraordinary rescue of A.I.G. underscores how much fear remains about the destructive potential of the complex financial instruments, like credit default swaps, that brought A.I.G. to its knees. The market for such instruments has exploded in recent years, but it is almost entirely unregulated. When A.I.G. began to teeter in the last few days, it became clear that if it defaulted on its commitments under the swaps, it could set off a devastating chain reaction through the financial system.
The swaps are not securities and are not regulated by the Securities and Exchange Commission. And while they perform the same function as an insurance policy, they are not insurance in the conventional sense, so insurance regulators do not monitor them either.
Of the $441 billion in credit default swaps that A.I.G. listed at midyear, more than three-quarters were held by European banks.
Was there foaming-at-the-mouth rage over the fact that the very financial "vehicles" that caused AIG to blow up were never regulated? Was there populist anger mobs gathering last fall to screech in protest of insurance being called something else so that federal regulators wouldn't be allowed to monitor those transactions?
Of course not.
Additionally, where was the great-and-mounting fury last fall over the $441 BILLION worth...over 75% of AIG's total....of insurance, non-insurance credit default swap activity with "European banks?"
Nowhere to be heard.
AIG went back to the Bush Federal Reserve again after blowing through that first $85 billion.....
CNN Money, November 10, 2008.....
Troubled insurer American International Group got a reworked $152.5 billion deal from the federal government Monday, as the Federal Reserve and Treasury Department made significant changes to the terms of the company's original bailout.
I don't remember seeing pitchforks being used as props by teevee news personalities in some faux-demonstration of outrage when that "reworked" $152.5 billion deal was announced last November.
I wonder why.
Now, if there's anything to get all pissed-off over concerning AIG's bailout....it should be about where the Big Bailout money is really going.....
Politico, March 15, 2009....
In all, AIG disclosed payments of $105.3 billion between September and December 2008. And some of the biggest recipients were European banks. Societe Generale, based in France, was the top foreign recipient at $11.9 billion, Deutsche Bank of Germany got $11.8 billion and Barclays, based in England, was paid $8.5 billion.
Here in the U.S., Goldman Sachs received $12.9 billion.
Unlimited gambling bets, like buying insurance at the blackjack table, made by AIG with all those other Big Banks.....bets of insurance that couldn't be called insurance because then regulators would be allowed to snoop on them.....had to be paid off, or the entire international casino-bankster system would collapse from the losses.
THAT system, leading directly to $152.5 billion in tax monies going to bigtime foreign and domestic gamblers, is where the rage should be directed. But it isn't. The bullsh*t rage is being directed at a never hidden bonus structure involving one tenth of one percent of the $152.5 billion.
America's daily media and political theater couldn't be any phonier.
About This Blog