AIG Caught with their hands in the cookie jarFollow

I certainly like to pretend it that way though.

Haha, that's pretty good. Tax the crap out of all the megabonuses.

Seriously, I hate the thought of people basing their opinions about the whole economic recovery plan on something like this as it really has no impact on the over-all success, failure or status-quo of the current financial situation.

The failure of AIG is a glaring example of the effect govn has on private industry. 80%...that's how much of AIG is owned by the govn. Not like any of this matters anyway. It's all just a diversion to keep the publics eye off the 9 TRILLION they're about to spend, and that's just a start.

... and a lot of discussion in the article about Dodd's financial support from AIG, that the exception wasn't in Dodd's original amendment, that he doesn't know when it was inserted or by whom, etc.[/li] EDIT: Beat me to it.

As for AIG, I have several whole life insurance policies I've been paying premiums on for 15 years or more. I did not buy these policies from AIG. I bought them from companies that had the highest ratings in the insurance industry. AIG later purchased the policies (or the companies) and I assume, if they went belly up, my policies (and a lot of other people's policies) would be worthless(?).

If I live and work for 20 more years I won't care quite so much about the policies because I will be relying primarily on my investments. But right now, the purpose of the policies is financial security for my family if I should die.

So should I keep paying for my policies with AIG ... in other words, can I count on them to pay up if I die? I recently passed on one of my guaranteed options to purchase additional insurance, mainly because I don't need more insurance, but also because I wonder if I'm throwing my money away.

Edited, Mar 18th 2009 10:28am by Ahkuraj

Get your timeline straight. The government didn't own 80% of AIG until after AIG had already failed. The government owns AIG as a consequence of said failure, not as the cause.

Personally, I'm beginning to think that anti-trust laws should be brought to bear on companies that are "too big to fail" like AIG. If the corporation had not been allowed to swell to such gargantuan proportions, this would never have been a problem in the first place.

Probably. Eventually the mods will run another IP check and ban him again, in that case.

http://hotair.com/archives/2009/03/18/video-shep-smith-goes-nuclear-on-barney-frank-congress-over-aig-bonuses/

Wow and wow. Shep loses his cool and calls Congress out on the bonuses drama.

EDIT: Reply button is not edit button, damnit.

Edited, Mar 18th 2009 5:28pm by KinleyArdal

I believe you will be ok. If they don't sell off their policies, then your state should have an agency that will be able to pay any claims that AIG had.

Hahaha, no.

It's not really an anti-trust issue though. AIG is not the only company that manages large financial accounts, and they certainly don't control such a large share of the industry that they could be considered a monopoly. They are that large because the financial accounts floating around the US economy (and world economy for that matter) are absolutely vast.

Ahkuraj posted that he (she?) has insurance policies backed/owned by AIG. And that's a whole lot of financial responsibility. AIG was/is considered "too large to fail", not because they've got too much control (which is what anti-trust laws deal with), but because the effect on the people if it went bankrupt would be massive. Every single person with a policy covered by AIG would lose it. That's a whole lot of average joes with life insurance, or auto insurance, or pensions, or whatever.

One of the things lost in all this (although someone posted the numbers I think), is that the value of the accounts handled by the division in question is somewhere around 1.7 Trillion dollars. And when you start doing the math, you realize just how tiny the 165 million dollars at issue really is. At risk is that 1.7 Trillion dollars. If AIG goes belly up, all those people lose their money, and what little assets on hand are available goes directly to those who have immediate claims on AIG (ie: not people with life insurance policies through AIG). Everyone else loses. So the government chooses to spend 160 Billion dollars to prevent a 1.7 Trillion dollar hit to the economy as a whole. Out of that 160 Billion, AIG spends 165 Million dollars in incentive bonuses to try to convince the folks working that division to stay on to try to fix the mess the company is in.

Remember. Most of those executives we're complaining about probably have contracted severance packages comparable to, or in excess of the bonuses we're talking about here. They could simply take that money before the company goes bankrupt and leave. But if they do that, whatever accounts they're handling will have to be picked up by someone else who doesn't know the details of them. Odds are, if enough of them choose to do this, AIG is certain to go bankrupt, and all the billions we've spent go to waste. But, if they can be convinced to stay, they might be able to fix things.

The bailout money is predicated on the assumption that this can happen. I just don't think that 165 Million in this context is a huge amount to spend, given that it's probably dollar for dollar increasing the odds of success more than anything else. It's not like AIG can just spend that 160 Billion and their problems are over. They have to manage the accounts they hold in order to reverse the money bleed they are in. That can only happen if the right people are in the right positions. And despite all the bashing, those who are most likely to be able to do that are those who are already intimately familiar with each of those accounts.


We're spending 165 Million of a 160 Billion bailout to prevent the loss of 1.7 Trillion dollars in the market. If it even helps a tiny bit, it's a steal of a deal...

And how many more would have if those retention bonuses hadn't been offered?



Not sure what analogy you're trying to make here other than randomly tossing in a zinger at Bush and the Iraq war.

Can you say with any certainty at all that those people working in that division were each and every one of them personally responsible for the decisions that put AIG in a bind? Or are you just slinging easy rhetoric?



I disagree.



Had it gone bankrupt, they would have. But then the Trillions of dollars of assets tied to accounts they manage would have gone away as well. The government choose to bail them out so that they wouldn't go bankrupt precisely because if they did, the contractual debts they hold (like insurance policies) would have been broken. That's what bankruptcy does. And yeah. That would have included their employment and any contractual payment packages they held as well.

You're arguing that we should have tossed the baby out with the bathwater. To spite a group of employees and their 165 million dollars in bonuses, you'd have thrown away trillions of dollars owed to millions of other people. I know that it's popular to hate on the rich, but isn't this a bit self destructive?



That's the people working there. I think you just aren't getting that this isn't like a bunch of fry cooks at McDonalds. You can't bring someone else up to speed on the job in 5 minutes. In most professional fields, the base knowledge of the field is just the beginning. Every single job will require a specific set of knowledge and skills that is unique to that job. There are things that I do every single day that other guys working at the same company as I with the exact same title and experience don't know how to do. Why? Because my job is to handle that particular thing. They know details about doing other things that I don't know. Sure. Give me 6 months and I could replace any of them (and vice versa), but AIG doesn't have 6 months for new people to figure out how to do the jobs these guys are doing.


It's not black and white. You can't just simplify it down to them making mistakes so therefore they suck at their jobs and can be replaced. Lots of times, people make mistakes and are still the absolute best people to do the jobs they are doing. This is one of those times.




False. More correctly, getting your company billions of dollars in debt does not mean that they don't know what they are doing. It just means that the results of their actions and decisions caused the company to be billions of dollars in debt. You need to stop assuming that the reason AIG failed was due to incompetence. They failed because they made bets on the market that made them especially vulnerable to exactly the sort of market crash that happened. Their competence is no different than that of thousand of other people who made similarly risky, but slightly different bets, and therefore were not hurt as much when the market crashed around them.

In this field, they are paid to take those risks. That's not incompetence. That's the nature of the business they are in. Due to conditions well beyond the control of the typical executive at AIG, the market became the financial equivalent of a giant game of hot potato. AIG just happened to be unlucky enough to be holding a bunch of potatoes when the bill came due...

The Treasury: not Geithner himself, but the department is understaffed as it is, making it more likely it came directly from him; even if not his idea, it would have to have met with his approval.

So, bets on who loses their job first: Geithner or Dodd. Both are in hot water already, Geithner over Bear Stearns and complaints of incompetence, Dodd over Countrywide deals and complaints of incompetence. Geithner also has people calling for his job already out of the House; two off the top of my head, I'll find their names in the morning. Opinions?

Edit: Screwed up formatting.

Edit # 02: Oh, and Geithner with his tax issues prior to confirmation. Forgot that tidbit.

Edited, Mar 19th 2009 12:17am by KinleyArdal

Edited, Mar 19th 2009 12:18am by KinleyArdal

Well, all I can say is I sure am glad we don't have that crazy moose-shooting woman from Alaska in charge right now. Lord knows the Presidential candidate was gonna be kickin' it halfway through his first year, and we'd really be in a mess then.

I hear she's inexperienced at running things, and would fumble the ball a lot in the world theatre with redneckish lack of refinement and tact.

And her only experience with Russia is knowing she can see it from her house. Hell, that's no type of experience to be dealing with a country you plan to propose to go into a nuclear drawdown with.. It'd be especially bad if she were to rile up those people in the Middle East, when we should really be apologizing for our treatment of the Middle East when they're really just such frakking nice and just people.

Edited, Mar 19th 2009 12:56am by KinleyArdal

Edited, Mar 19th 2009 12:56am by KinleyArdal