Once upon a time, long, long ago, in a galaxy far, far away, bankers and people working in investment businesses only expected to make moderately good incomes. Then, everything was decriminalized and they were able to run riot. So, they ran riot and ran up immense betting schemes using every possible tool to hijack money for themselves. They became literally, obscenely rich, driving the world’s financial systems off a cliff. Now, they want the big, big bucks to continue to come to them, despite the epic destruction these very actions caused. And as usual, the major media is mostly on their side, trying to justify this wretched looting spree.
So I understand Obama’s railing against the bonuses — but I think he may be making a mistake, both short-term and long-term.
“This is a corporation that finds itself in financial distress due to recklessness and greed,” the president said on Monday. “Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?”
Unfortunately, Obama said this rather plaintively. He doesn’t feel anger in his belly. On the other hand, Mitt Romney, a filthy rich Republican who has a business operating out of a pirate cove in the Caribbean, was dressing up as a revolutionary and waving a pitchfork, demanding action. I hope his wish comes true. I can’t wait to see Mitt’s tax-dodging ass in prison.
Well, because in the short run, hammering the AIG employees to give back their bonuses risks costing the government more than honoring the contracts would. The worst malefactors at AIG are gone. The new top management isn’t taking bonuses. Those in the bonus pool are making sums that for most of us would be astronomical but that are significantly less than what they used to make. Driving away the very people who understand how to fix this complicated mess may make everyone else feel better, but it isn’t particularly cost-effective.
I am livid that anyone even dares suggest having a bunch of spoiled-rotten gnomes who wrecked everything in the first place, be given immense sums of money while they ‘fix’ this mess. And pray tell, how are they fixing their messes?
By making us recapitalize all the systems! We are cleaning up the mess, not them! We deserve multi-million dollar bonuses, not they! They deserve to be kicked to the curb and then forced to beg alongside old Vietnam War vets. Better still, have the vets beat them up, too.
In the longer term, having the government void existing contracts, directly or indirectly, as with the suggestions of a punitive tax on such bonuses, will make enterprises less likely to enter into arrangements with the government — even when that is in the national interest. This is similarly counterproductive.
One thing we certainly do not need is more gnomes messing around, trying to cage multi-million dollar bonuses, doing insane, strange and stupid things. If these amoral monsters no longer want to work in finances….FINE WITH ME! Go away! Don’t come back! If they do come back, we better stick large, hungry dogs on them. The WP reporter doesn’t explain why we need these sorts of services, in the first place. Much less, why we have to give these creeps incredible amounts of money.
If AIG or Goldman Sachs or other pirate organizations are too shy to raid our government, this is a good thing! Not a bad thing. I want these snakes to slither over to China and do their begging, there. Instead, our President has to grovel to the Chinese dragon so it will lend us more money to give to these creeps who want to pocket a significant part before using the rest to spread around the planet, covering their asses. Now for a word from the new president of AIG:
When I answered the call for help and joined AIG in September 2008, one thing quickly became apparent: The company’s overall structure is too complex, too unwieldy and too opaque for its component businesses to be well managed as one entity. So the strategy we continue to pursue, in close cooperation with the Federal Reserve and the U.S. Treasury, is to isolate the value in the company’s component parts, capture that value to pay back money owed to the government, and allow AIG’s healthy insurance companies to continue to prosper for the benefit of policyholders and taxpayers.
Once upon a time in another galaxy, insurance businesses were closely supervised. They couldn’t play wild guessing games or manufacture derivatives products that put them in hock by the multi-trillions. They were overseen by our government or they were not allowed to do any business.
What also became clear is that once AIG’s relationship with the government and taxpayers changed, our behavior as a company needed to change. So, of our own initiative, we suspended our federal lobbying activities and halted corporate political contributions. We also restricted executive compensation. In all, total 2008 compensation for the top 47 executives is 56 percent lower than their total 2007 compensation. My annual salary is $1. My only stake is my reputation….
Will wonders never cease? HAHAHA. They voluntarily gave up lobbying? Using millions of dollars to corrupt Congress and the President should be ILLEGAL. Instead, all these gnomes lobbied for one thing: no taxes from themselves and no supervision of their opaque, complex and unwieldy systems! They got the green light and took outrageous advantage of this!
Although we have wound down more than $1 trillion in the portfolio of the AIG Financial Products unit that is at the root of the company’s troubles, there remains substantial risk in that portfolio. The financial downside for taxpayers is potentially very large, and that’s why we’re winding down this business.
In other words, AIG is BANKRUPT. Got that? BANKRUPT. Bankrupt organizations can’t hand out bonuses like lollipops. Other organizations that went bankrupt tried this, too. All should be hauled into court and the people who did this, punished. We didn’t want to see the guys running AIG quit their jobs. We want them ARRESTED.
To prevent undue risk exposure in the meantime, AIG has made a set of retention payments to employees based on a compensation system that prior management put in place. As has been reported, payments were made to employees in the Financial Products unit. Make no mistake, had I been chief executive at the time, I would never have approved the retention contracts that were put in place more than a year ago. It was distasteful to have to make these payments. But we concluded that the risks to the company, and therefore the financial system and the economy, were unacceptably high.
Not one person involved in this has explained what horrors these greedy bastards will do to us if we don’t give them immense rewards for screwing up. This is the essence of amorality that all economists warn about. A system can’t exist where this sort of thing happens. There has to be punishments or people will misbehave more and more. For example, thanks to lobbying by all these powerful corporate entities, we have a totally corrupt government which gave them everything they wanted. This was a corruption of public morals. It has to also stop as well as malefactors, punished.
This is why there are revolutions. If the government is too corrupt, it ends up in the ditch and new people take over. Usually, there are few legal niceties from the previous regime. Heads literally roll. This is why AIG’s gnomes MUST bite the bullet. It is better to retreat back into whatever cave they came from.
American International Group Inc. Chief Executive Officer Edward Liddy asked employees paid bonuses exceeding $100,000 to repay half, responding to public anger over $165 million in retention pay after a taxpayer-funded bailout.
HAHAHA. How many of these greedy little jerks who are threatening economic nuclear war, are going to hand back their immense bonuses for screwing up the entire world’s economic systems? I bet, there will be nearly none. I would suggest Mr. Liddy go about each office, snarling and yelling and slamming doors and remove all the corner office holders and reinstall their desks in the sub-basement or even in the parking garage. Have workers use jackhammers next door or something. Make life a misery. Letting them rip us off and sneer at us is not a good solution. Actually, Mr. Liddy could hire me to go around, being loud and obnoxious. I have a lot of talent for this!
The U.S. Treasury should move faster in announcing details of its plan to clean up banks’ bad assets to restore the ailing financial system, University of Maryland economics professorCarmen Reinhart said in an interview.
No, our government doesn’t have to buy more bad assets. It bought far too many, already. Sacrificing our entire government in order to save a corrupt, venal, greedy financial system is pure insanity. If we want to save it, first we reform it! Once it is totally rebuilt from the ground up, with new laws, especially, outlawing Over The Counter Crap, then we can discuss how we will deal with the financial ramifications of unwinding this epic mess created by greedy gnomes seeing immense bonuses.
“Move quickly is the ticket,” she said today in an interview with Bloomberg Radio. “Speed should take over style.”
Maybe we should strip all these guys naked and make them run down Wall Street, up Broadway, through the Holland Tunnel and into the swamps of the New Jersey Meadowlands.
Treasury Secretary Timothy Geithner said this week he would soon provide details of his plan to help banks clean up the non- performing assets that are clogging the financial system after announcing the outlines of the plan Feb. 10. The Federal Reserve today announced about $1.1 trillion in additional measures to revive financial markets, including purchases of long-term Treasury securities, in a bid to stem the slump.
Another trillion? This is just ridiculous. It began with $20 billion, then $50 billion, then $200 billion and since AIG screwed the pooch, it is now a trillion a pop. After the September $700 billion bail bill, we should have given up. Instead, it grows worse and worse, by the hour. This is why we have to do something to amuse the masses. They are frightened of the cost of this mess, and rightfully so.
This is why we should turn Yankee Stadium into a Roman Coliseum. Hire a few tigers, bears and lions and then have all the bonus boys run in circles for our amusement. This mess is so ridiculous, I can’t think of any other solutions. Since they are threatening to destroy what’s left of our economy, I suggest Obama call them, ‘enemy combatants’ and ship them to Cuba. Give them to the Castro family.
Treasury 10-year note yields fell the most since 1962 as the Federal Reserve surprised investors with plans to purchase as much as $300 billion in government debt to drive consumer borrowing costs lower and lift the economy from recession.
The difference between two- and 10-year Treasury note yields narrowed 27 basis points to 1.75 percentage points, the most in at least 25 years, after the central bank said the purchases will be concentrated among those securities. The Fed is expanding the debt purchase portion of its quantitative easing policy, which already includes agency and mortgage debt, to more than $1.85 trillion in securities.
“This is shock and awe,” said Steve Rodosky, the head of Treasury and derivatives trading at Newport Beach, California- based Pacific Investment Management Co., which runs the world’s largest bond fund. “The shoot first, assess later approach, with the economy teetering as it is, is the correct method.”
I am shocked. I am not awed. Just shocked. So, the amount now is nearly $2 trillion? And Geithner wants another trillion? And this is not even the end of the second year of the Great Depression II: The Revenge of the Derivatives Beast. If we are only one third of the way through the depression, at this rate, we need another $6 trillion or so to end things. Then, we can collapse and die. But if the gnomes have their bonuses, all will be well. They will simply leave our country and go live somewhere nice like Switzerland?
The dollar fell the most against the euro since September 2000 as the Federal Reserve said it will purchase $300 billion of longer-term Treasuries, spurring speculation the central bank is debasing the currency.
Plan 1: debase the currency.
Plan 2: debase the currency.
Plan 3: debase the currency…repeat as needed.
Now, we debased the currency repeatedly until we had to detach it from gold where upon, it began to be debased very rapidly. Even with out inflation surges, it relentlessly loses about 3% a year in value. Over 100 years, this means, it lost nearly 100% of its original value. My former father-in-law paid 5¢ to ride the subway. In 1972, I paid 35¢. Joe that that was a huge amount. Then, it rose to 50¢, then 75¢, and now, is over a $1.00. See? This is elegant proof of how our currency debases!
The greenback may extend its 5.6 percent decline against the currencies of six major U.S. trading partners since reaching the highest in almost three years in early March as the central bank prepared to flood the market with dollars. Citigroup Inc. currency analysts recommended adding to bets that the greenback will depreciate after it weakened beyond $1.34 per euro for the first time since Jan. 12.
“It did shock the market,” said Jack Iles, a money manager in Boston at MFC Global Investment Management, with $2.5 billion under management. “The Fed is printing money, which translates into general dollar weakness. There’s trillions being funded and committed. It’s a huge dollar negative.”
Since this funny money is used to deal with our foreign trade, this is going to cause utter havoc in world markets. Instability is worse than high prices. Instability means things shoot upwards or drop like rocks. And the entire business of the Derivative Beast was to protect everyone from all this. Only it is, in itself, causing this! This is the whole reason why we can’t let people insure themselves so much, they can be super-risky.
Everyone has to have limits and curbs. This is so hard for people to understand. ‘But I WANT to go all the way and do risky things! I don’t want anyone interfering!’ cry people who can’t see why we need rules. All mothers who run good houses that are clean and have well-behaved children know that there are many social rules which make life more pleasant. Letting kids act like brats, throwing food and toys everywhere, is bad for the children, bad for the parents and bad for society. Just trust me on this.
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