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AIG execs spend $440K on post-bailout shindig- Page 2

AIG execs spend $440K on post-bailout shindig

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best12bars
#25re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 8:14pm

LePetite, thanks for your support.

And nygrl232---I thank you too, but I don't think anyone's been "illegal" here. Isn't that the scary part?

Congress deregulated everything, so it allowed banks to pull the wool over our eyes. And we (the house buyers) said, sure! I'm entitled to have a $600K home, even though I only bring in $55K per year.

Everyone is guilty, but no one has (I don't think?) committed a crime.

So, first thing? Make it a crime to ever do this again. Pass that law NOW.

Then, deal with the mess we have. They may not have committed a crime, but they're S.O.L. with this phony mortgage money. The banks will NEVER see it. Move on. You lose.

Ugh. Honestly, I don't know HOW this is all going to work out.


"Jaws is the Citizen Kane of movies."
blocked: logan2, Diamonds3, Hamilton22

LePetiteFromage
#26
Posted: 10/8/08 at 8:19pm

Updated On: 1/12/09 at 08:19 PM

YouWantitWhen???? Profile Photo
YouWantitWhen????
#27re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 8:30pm

So, does that mean you would adjust all homes, regardless of the loans, or only those with owners who bought with the hearts and not their brains? If you want to reduce the amount of my mortgage in the same proportion (as someone who bought within the last year, and had to come up with lots of money to get an affordable mortgage) then I am listening. But, if you are going to reduce the loans of only those who tried to live beyond their means, then I will have a problem.

As I said before, I have some sympathy for those who put money down and paid to get into a home. And, there were subprime loans sold to those who qualified for better rates. So something has to be done. But, I am getting a bit tired of watching others live reckless lives and get bailed out.

You cannot simply factor in the wages and a multiplier and then say, viola, that is the value. Different areas have different values.

LePetiteFromage
#28
Posted: 10/8/08 at 8:33pm

Updated On: 1/12/09 at 08:33 PM

KrissySim
#29re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 8:35pm

There is not going to be any simple fix.

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nygrl232
#30re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 8:38pm

Maybe nothing technically illegal was done, but the American people have earned the right to make an example of the lot of 'em. Regulations were put there to prevent this. They chose to mess with the system and now, after eight years of nucular and 9/11 and stay the course and bring it on, I think we're due to administer a public mega b*tchslap.

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best12bars
#31re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 8:39pm

"So something has to be done. But, I am getting a bit tired of watching others live reckless lives and get bailed out."

Who's getting bailed out, YWIW? They're all getting big foreclosure signs posted on their houses, right?

Is anyone getting bailed out besides the banks and loaning companies?


"Jaws is the Citizen Kane of movies."
blocked: logan2, Diamonds3, Hamilton22

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best12bars
#32re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 8:41pm

"I think we're due to administer a public mega b*tchslap."

Well, this definitely qualifies, nygrl232!


"Jaws is the Citizen Kane of movies."
blocked: logan2, Diamonds3, Hamilton22

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YouWantitWhen????
#33re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 8:47pm

Let me put it another way then.

Why are those of us who played by the rules, lived beneath our means, and put large down payments on homes now going to have to feel like suckers for doing so?

My question is whether you are going to do something for all mortgages, since all home values will be effected? If not, then you will have to look at each situation individually, and see whether or not there was an actual personal stake by the homeowner in the loan. Then, I would propose no interest loans or something almost akin to that, where the principle on the note is not modified, but the loan interest is eliminated (which would reduce the cost of the loan). That would also preclude getting the interest write off on tax returns, which might help repay long term some of the value to the government.


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best12bars
#34re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 8:54pm

I was thinking in terms of "all loans," whether or not you were living beyond your means.

You're house isn't worth anywhere near as much as you think it is, if you bought it in the past 5 years. Period.

Whether or not you can afford a sudden hike of $5K a month? I don't think that matters.

The housing prices need to go back to "normal" and so do the mortgages. Your loans are BOGUS.

So... you would be included in the mix, YWIW.

I'm not saying my theory is doable! But I think we'd better deal with the reality of "actual value" now, rather than wait 18 months when it finally gets there. Let's address it head-on now, and quit putting Billion Dollar Band-Aids on gushing trillion-dollar arteries.


"Jaws is the Citizen Kane of movies."
blocked: logan2, Diamonds3, Hamilton22

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best12bars
#35re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 8:59pm

I have this idea that if everything adjusted accordingly across the board (all the loans, the house values and the payments) that this would somehow be more manageable now.

Can somebody tell me why it wouldn't?


"Jaws is the Citizen Kane of movies."
blocked: logan2, Diamonds3, Hamilton22

LePetiteFromage
#36
Posted: 10/8/08 at 8:59pm

Updated On: 1/12/09 at 08:59 PM

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YouWantitWhen????
#37re: AIG execs spend $440K on post-bailout shindig
Posted: 10/8/08 at 9:03pm

LePetite,

I was thinking the same thing. For those homes that are adjusted, require gain to be paid on the sale if there is a profit, as opposed to allowing the first $250k to be taken without paying taxes.

LePetiteFromage
#38
Posted: 10/9/08 at 12:53am

Updated On: 1/12/09 at 12:53 AM

Q
#39
Posted: 3/15/09 at 12:22pm

And now they're paying millions in bonuses using our money. And I have to ask AGAIN, how can you get a 'bonus' for losing MILLIONS of dollars?!?
Link to article.

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YouWantitWhen????
#40
Posted: 3/15/09 at 12:28pm

I actually have no problem with bonuses being paid to those business units that were profitable - maybe not in the amounts reported, and certainly not for those units that were part of the problem.

The traditional insurance business that is part of AIG (the one that is regulated, as opposed to the credit default swaps business that was not) actually made money and was profitable. They need to keep their sales staff to continue those business as going concerns if they are going to spin them off successfully.

If however, any of the money went to senior management involved in managing any of the failed businesses, then those people should be drawn and quartered.

The really sad thing about this whole mess is that much of AIG was fine, it was a couple of divisions that screwed this up for the whole enterprise.

Unrestrained greed seems to have that effect...

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papalovesmambo
#41zackly
Posted: 3/15/09 at 12:36pm

the other thing is that these are not bonuses they decided to pay recently. according to the article these are part of contracts that were negotiated in 2008 before anything started to go sideways. how do you just void a contract?


r.i.p. marco, my guardian angel.

...global warming can manifest itself as heat, cool, precipitation, storms, drought, wind, or any other phenomenon, much like a shapeshifter. -- jim geraghty

pray to st. jude

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PalJoey
#42zackly
Posted: 3/15/09 at 12:39pm

how do you just void a contract?

Same way you lose a billion dollars or so.

"Oops. Sorry. We made a mistake."

I say, void the contracts and let the bastards sue.


Updated On: 3/15/09 at 12:39 PM

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papalovesmambo
#43zackly
Posted: 3/15/09 at 12:41pm

i think they should sue. what's john edwards doing now? i bet he could use a good case like this.


r.i.p. marco, my guardian angel.

...global warming can manifest itself as heat, cool, precipitation, storms, drought, wind, or any other phenomenon, much like a shapeshifter. -- jim geraghty

pray to st. jude

i'm a sonic reducer

he was the gimmicky sort

fenchurch=mejusthavingfun=magwildwood=mmousefan=bkcollector=bradmajors=somethingtotalkabout: the fenchurch mpd collective

Q
#44zackly
Posted: 3/15/09 at 1:20pm

"The large bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer."

YWIW - doesn't this indicate the group you referenced?

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YouWantitWhen????
#45zackly
Posted: 3/15/09 at 2:34pm

AIG is just asking to go into bankruptcy - that is one way to void the contracts.

Q, I scanned the article too quickly. My bad.

I just saw the statement "at issue" and was not sure if it reference the entire amount, or a subset that was going to those who got them in this mess. Re-reading it again shows they further detailed the recipients.

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best12bars
#46zackly
Posted: 3/15/09 at 3:15pm

So completely disgusting.

And exactly how are bonuses "contracted?"

Show me a "bonus" that isn't contingent upon performance or at least contingent upon SOMETHING. I've never heard of such a thing.

If it's a guaranteed amount, and guaranteed to be paid regardless of all circumstances, then it's SALARY, not "bonus."

Oh, what a tangled web we weave ...


"Jaws is the Citizen Kane of movies."
blocked: logan2, Diamonds3, Hamilton22

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YouWantitWhen????
#47zackly
Posted: 3/15/09 at 4:07pm

Besty, depending on the industry, there are bonuses that are contractually dependent upon individual sales. If you are in a sales job, and you meet certain milestones, you receive more money. It is not uncommon in commission based industries.

I am not saying that I agree with it, but I do not doubt that if certain milestones were met, that AIG was obligated to pay based upon the underlying selling agreement.

Many sales folks have a very small, or non-existence salary, and make money the commissions. Think of it as points on the success of a movie - the studio may be under water, but the individual movie made money, and if someone had points off the profits (not even getting into the fuzzy accounting that can accompany movies) they will get paid, regardless of whether or not the studio is actually making money overall.

ETA: I am reading that the number is possibly even higher. If it were not for the domino effect of a bankruptcy, I would want AIG to go get restructured and void the contracts. AIG was permitted to get too big, and now has everyone by the short hairs... There is no good solution here. If they are contractually obligated, not paying would certainly mean lawsuits. If they go into bankruptcy, they could take a few other financial institutions with them.
Updated On: 3/15/09 at 04:07 PM

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best12bars
#48zackly
Posted: 3/15/09 at 5:20pm

"I am not saying that I agree with it, but I do not doubt that if certain milestones were met, that AIG was obligated to pay based upon the underlying selling agreement."

YWIW---I hear what you're saying. I understand it, and it all makes sense. But considering how beyond-dreadfully AIG performed last year, what "milestones" could they have possibly met? They lost billions of dollars across the board. Not just disappointing, in-the-red numbers.

One other question (for you, because you're WAY more in-the-know about this than I am):

We all agree that AIG and others were allowed to get "too big." They grew beyond being accountable for their own actions. We as a government and as a nation HAVE to bail them out of their reckless mismanagement and soften the fallout blow, or stand by idly and "go under" ourselves as a country and as individuals who live in it.

When AT&T tried to get "too big" a few years ago, they were broken up into smaller companies, because they were bordering on a "monopoly" of the market which is illegal.

Why didn't (or doesn't) AIG and these other uber-banks and businesses suffer the same fate? They shouldn't be allowed to get that big---to grow "larger than the law itself" and DEMAND that we all support them as taxpayers when something goes south.

It's a monopoly of the market place if we HAVE to support them. Just like AT&T. Right? They own too much of a "share."

(And I know the government has had their eye on Microsoft for some time now as far as monopolies go. Why did they turn a blind eye to AIG and others?)


"Jaws is the Citizen Kane of movies."
blocked: logan2, Diamonds3, Hamilton22

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YouWantitWhen????
#49zackly
Posted: 3/15/09 at 6:33pm

Besty - most people selling products are independent contractors, and not company employees - I am not certain of the structure for AIG's producers' but generally they have no stake in the company's performance, only their individual sales objectives. Generally, if they bring in a certain amount of premium, they hit a milestone, regardless of how the company does as a whole.

Think again of the movies - you can have a successful film that makes money, while the studio itself loses money. Under your scenario, a producer' or actor's percentage of the film's gross would be conditioned on the studio making money on all of its films - it is just not done that way. Unless, of course, you are an employee and not an independent contractor. Then often times, a bonus is conditioned on a variety of factors, and overall sales is one of the factors along with company performance and individual performance (at least in my experience).

I think during the past 8-10 years, companies were able to consolidate ownership in ways not previously seen. Just look at what has happened with media, with multiple channels being owned by one company in one market. In the past, Fox would not have been permitted to have such a control over the message being distributed between its papers and networks. Murdoch has been the biggest beneficiary of this. And, AT&T was a monopoly at the time, and controlling both the local and long distance markets was not thought to be consumer-friendly. With all of the options today through cable and VOIP, I doubt the same ruling would occur.

AIG is not a monopoly, but it did acquire many business units in the US and internationally. Many companies compete in the same space so it is not technically a monopoly.

And, it was again the unregulated parts of AIG that created the problems. Credit Default Swaps were not regulated as a product the same way traditional insurance products are. There was just a huge gaping hole in regulation that never caught up in time before the debacle hit.

Part of this can be blamed on greed, and part on a failure of regulation. Part of this can be blamed on interdependence of all of the financial institutions.

If you look at the books, the regulated businesses (American General, SunAmerica, and some other insurance companies) were fine. It was those units that tried to market new financial instruments that created the problems. I don't believe there was a reserving requirement for these sales. It was not that AIG got too big per se, it was that parts of it went unregulated which then compromised the healthy, regulated units.

The fear with Microsoft was its ability to dictate and control the market based upon market saturation. The same is not true for AIG. They did not create the only product in the space, and had plenty of competition for a variety of carriers and financial service companies.

Updated On: 3/16/09 at 06:33 PM


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