Why AIG Really Needed $170 Billion in Taxpayer Money
Are you angry about the $165 million in bonuses AIG gave out? If you are, there’s a reason for that: You’re stupid and don’t understand how things work in the financial world. You may think to yourself, “I wouldn’t get a bonus if my company were failing,” but of course you wouldn’t. You’re a nobody. But try to imagine someone so smart and so awesome that even if the company you gave him was going bankrupt, you’d want to give him millions of dollars. Hard to imagine someone like that, isn’t it? Well, those are the sort of people running AIG. They are so beyond you it’s laughable for you to even question them. Realize that for them, $165 million is a pittance. It’s insulting. They’re probably all demoralized right now from getting so little. If you really wanted AIG to succeed, you’d be demanding the executives at AIG get more bonuses so they’ll consider saving the company to help your silly little economy.
But coming to a conclusion like that takes logic and reason; you just want to be angry at things you don’t understand. Well some of us — like AIG executives — have better things to do than shake our fists and shout all day. After the bonuses, AIG still has $170 billion from the federal government to spend. That’s a lot of work. You can’t even comprehend spending that kind of money, but I’ll try and help you understand what they’re doing with that cash. Just promise you’re not going to freak out over every little thing you don’t understand.
Here’s the breakdown:
$50 billion for foreign banks: Before you get all angry again and scream about how this money was to stimulate the American economy, realize that the “I” in AIG — like the “I” in IHOP — stands for “International.” That means they’re going to have to spend this money internationally. Yes, some of the countries they sent money to don’t actually exist, but fraud like that is just a cost of doing business. There are a lot of countries out there, and you can’t expect one company to keep track of which ones are real and which are not.
$12 billion for corporate catering: That may seem like a lot of money to spend on food, but that’s because you’re thinking in terms of what you’re used to eating. Being executives at one of the world’s largest companies, they can’t just root through the garbage and eat whatever they find like you do. They have refined palates, and if they want Chinese food, they’re going to have to fly a chef and ingredients in from China. If they want pizza, they’re bringing in people from Italy. If they want a moon pie, they’re sending a chef to the moon to build them a pie in low-G. That’s just how things are done.
$5 billion for indoor waterpark at corporate headquarters: When kids in their on-site daycare get bored, they get whiny, and whiny children decrease productivity. The obvious solution: Build a waterpark. It can’t be an outdoor waterpark, though, because if people come to AIG’s corporate headquarters and the first thing they saw is a waterpark, no one would take them seriously. Of course, all the water will be FIJI.
$10 million for lobbying and political donations: That seems pretty anemic, especially considering that Congress provides most of their income. If they can get a second stimulus passed, that will be an astronomic return on investment.
Hey how dare you say something like this
“Yes, some of the countries they sent money to don’t actually exist, but fraud like that is just a cost of doing business. There are a lot of countries out there, and you can’t expect one company to keep track of which ones are real and which are not.”
Next you’ll be whining about how their spending money in all 57 states… obama approved this plan and he’s been to all 57 state so you just stop your whining.
AIG’s big mistake was not spending…excuse me, investing greater amounts in the political fortunes of various Senators. Just look at Fannie and Freddie. No one is complaining about them. Just remember in this country we have the best political system that money can buy.
Does anybody have the contribution figures concerning the employees of AIG in last year’s elections? It is my guess that Barack Obama received four dollars to every one donated to the McCain campaign. Furthermore, I bet most of those employees currently complaining of being vilified—voted for Obama!
When Bill Richardson was first tapped for commerce secretary I began posting in him. Soon enough I found his connections to cdr financial products and their involvement in some black box deals(muni-bond scam) CDR was involved along with serveal other banks and AIG in conning and corrupting various states and municipalites. From Florida, to Mayour Larry Langford, to Ed Rendel they are all in it. Everyone keeps talking about the sub-prime collapse as the reason the countries finances are a shambles and why AIG had to pay out money, but AIG also had to pay out money to various states who lost big time on muni-bond deals that went sour. AIG has been propping up the democratic party and criminal business behaviour for as long as it could until they just couldn’t hold out anymore.
On the Convergance of Democrats and AIG:
http://46in08.blogspot.com/2009/03/convergence-democrats-aig-banks-and.html
Black Box Deals, AIG, J.P Morgan Chase, and CDR Financial Products: A Summary of Corruption
http://46in08.blogspot.com/2009/01/black-box-scandals-in-chicago_07.html
For Example:
CDR and the Democrats
The withdrawal of Bill Richardson recently made the headlines. In his case CDR gave money to Si SE Puede, a PAC formed to help pay Richardson’s expenses at the 2004 Democratic Convention. In exchange its argued that CDR received favorable treatment in regards to bids to do business for GRIP (Govenor Richardson’s Investment program), bid rigging in short.
Another aspect of pay for play, and one more likely to land a politician in jail is CDR’s tactic of finding friends, fundraisers and associates of elected Democrats, and hiring them as “Consultants”. In New Mexico it was Richardson friend Mike Stratton who was hired by CDR. On a side note the Director of Si Se Puede Fred Duval was hired by UBS ,a Swiss bank, as a consultant. UBS was also one of several banks that ended up receiving a cut of the GRIP pie. The collusion of CDR, elected Democrat, and consultants that occurred in New Mexico is similar to other CDR linked scandals. In Philadelphia it was Ron White (now deceased) who received money and super bowl tickets from the company and was hired as a consultant. He was also an associate and fundraiser for Philly Mayor Sharpe. In Pennsylvania as a whole it was Alan Kessler who was the chief lobbyist for CDR and a top fundraiser for Ed Rendell. The most egregious example would be Mayor Larry Langford of Birmingham Alabama, who is accused in a 101 count indictment of using his friend William Blount and lobbyist Albert LaPierre to funnel money, jewelry, cloths, and watches into his hands in exchange for government favors while he was President of the Jefferson County Commission. Jefferson County, which includes Birmingham is on the precipice of the greatest municipal bankruptcy in history. There are also questions of CDR’s actions in Atlanta and several of municipalities and CDR is currently being sued by over 20 school districts and cities in addition to the criminal investigations.
http://46in08.blogspot.com/2009/01/democrat-culture-of-corruption.html
Congress is outraged about $165 million in bonus money to distract voters from the REAL outrage: $170 BILLION from the government treasury to AIG. As Mr. Fleming says, when someone hauls money around in dump-trucks, a few percent is bound to spill out. Congress shouldn’t feign surprise when it supplied the taxpayers’ money to fill the dump-trucks.
It’s too blatant to be tongue in cheek. Maybe this is supposed to be humor. It isn’t even funny. Or maybe I’m just too stupid to accept anything that is said without verifiable sources.
“If not, you’re stupid, and I’m tired of dealing with you.”
Yes , I’m stupid but I still want the money back!!!!!
Ha-
Kids sliding down an AIG 5 billion dollar water park- slide would be fun to watch.
When I was a child we had to walk 5 miles through snow up hill to school,
both ways.
Our parents used to beat us with belts,
not because they were mean,
but because it helped us forget how hungry we were before we went to bed.
Times have changed!
I could go on,
but not as far as I could go on a 5 billion dollar water park slide.
O.K., Frank, fun is fun. What would everyone be saying if AIG had paid its staff “commissions” for each transaction completed? After all, they are supposed to be compensated based on the amount of business they bring to the company. If they sell a couple of billion in insurance policies, they are entitled to a bonus of “X” percent. If they bring in a couple of billion for one or several hedge funds, they are entitled to a percentage. So, if they, like car salesmen, were paid a commission per transaction instead of one lump sum at year end, would anyone have either been the wiser or complained?
You are missing the whole issue. This is a test vehicle to see if the government can indeed nullify contracts entered into freely by private citizens and corporations. Don’t be surprised if a bevy of lawsuits spring up from this.
11. Kevin.
Thank you. People, do NOT buy into the class envy “he’s got more money than I do and I don’t think it’s fair” crap. That is NOT what this is about.
This is a confiscatory attack on private citizens’ bank accounts, and money which was LEGALLY THEIRS. I don’t care how much the money was. It was legally theirs.
Hey, AIG has been paying bribes to Washington politicians for many years. It is only fair that AIG finally gets something in return!
Ahem.
Why would our President give this greedy insurance company money? Why would he give them money when there are children all over the United States suffering?
Watch this video and try not to cry.
http://www.youtube.com/watch?v=_WMTTrOrKVI&eurl=http%3A%2F%2Fi%2Ddineout%2Ecom%2Fpages2009%2Flistening%2E3%2E19%2E09%2Ehtml&feature=player_embedded
Watch this video and pray for our future when children are starving in our country and our Government hands the money to GREEDY CORPORATE AMERICA.
This is not just happening in California, and the children in that video are in California, but there are children hungry in Arkansas, the Rocky Mountains, and all over our country and yet they are alone.
Why?
Why would the California Celebrity Crowd “CELEBUTARDS” think they have a right to blog and tell these children right from wrong? The children in the video are in California, and they are on their way to what kind of future?
Why did Obama give an Insurance Company more money?
All I hear on the news is TRILLION, MILLION, HUNDREDS OF THOUSANDS being threw away to GREEDY CORPORATE BANKS, and I go and read the news trying to understand.
I do not understand.
howiem says: “Or maybe I’m just too stupid to accept anything that is said without verifiable sources.” I think you hit the nail on the head with that statement. You could have just shortened it a bit, to… “Or maybe I’m just too stupid”.
Tonya: After reading what you posted, I can see why you do not understand. It is not the governments job to give money to any corporation, you are right about that. But it also not the governments job to give money to the citizens either. If you want these folks to have a nanny, go hire them one yourself.
So all you guys think this money is real? It isn’t. It’s printed on a press. It’s paper which, if it didn’t have ink all over, it would have some use.
Giving money of this type to AIG is meaningless. It is just IOU’s being exchanged or creds being redeemed.
You are worried because the same money is what you earn, live on and pay your bills with. Well that just makes you and me a sucker.
We live in an unreal economy based on crooked deals cut by people whose sole interest is their own.
We have elected Mr Obama who, as a Chicago politico is probably no more damaged than any other Illinois seat warmer, but to expect him to solve anything is, well, naive is the kindest word to use.
I know he helped them (the children in video I put on here), but there are children all across America that needs help right now and he should not give to Greedy Corporate Banks.
He is wrong.
There is a wood frame Church down the road from my home and they take donations of food. They bag this food up and place it in a back room with an open door in the back for our Senior Citizens. Some of the Seniors have worked hard their whole lives, but cannot afford their medication, and their food bills. They must choose food or the prescriptions that help them stay alive. Many of them choose their prescriptions. These are proud people, and so the door is open and they do not see which Senior Citizens come in and take the bags of food.
I hear people say “What will happen to our children’s future, what will they do when they grow old when our Government is borrowing money we do not have”, and I think of that church and our Senior Citizen’s today, and it is happening to the elderly today. It is happening today.
This is in Texas, and we are fairing much better than other States as far as I can see.
When I hear how much he is borrowing to give away to Corporate Pigs then I am afraid.
Do not pick on me about the word “fairing” , I do realize I just threw some backwoods country jargon on you unexpectedly. My mistake, but that word is still used like that from time to time here in the Piney Woods.
I do like the word, and I use it the same way my Grandmother used it. I know it is wrong.
” How are you today Tonya?” Well, now, I am fairing okay.
I apologize.
I expect better from PJM contributors. This wasn’t even funny.
BTW, the 170 million weren’t for actual bonuses. They were negotiated a year ago, to retain employees to stick around and “wind down” one trillion dollars in CDS’s. They were basically deferred compensation packages. The employees did their part, and were essentially put out of a job once they sold off the assets.
This doesn’t excuse AIG for being greedy and bad. It’s just that this “bonus” thing is such a ridiculous misdirection by Congress that it’s time to get over it.
Tonya, the word is “faring,” not “fairing,” and it’s not backwoods country jargon. It means “proceeding” or “getting along” as in “How is he getting along?”
I hate to say this, but those people working at AIG are worth every penny of the bonus they were paid. Yeah, they made mistakes that brought down the banks, world wide. But they have been winding down these contracts since 2006 and they are a hell of a lot smarter now.
If they are not paid, they will work for the “counterparties” and negotiate against the US taxpayers. And why shouldn’t they, if we aren’t willing to pay them for their expertise and their signatues on confidentiality agreements.
BTW, the congressmen who are expressing their outrage, understand all this, and the outrage is all for show.
Finally someone starts to dig away at the rot…good beginning.
The Raw Numbers as of March 6th 2009;
The entire Real estate market in USA is valued at roughly 23 Trillion
The stock market at roughly 15 Trillion
The total gross domestic product of the USA stands at 14.2 Trillion
The WORLDS stock markets total approximately 52 Trillion
Lets assume European Real estate at double USA, 46 Trillion
The Totals for these assets are : 150.2 Trillion Dollars
Assuming the real estate and stock markets have dropped 50% in the last 2 years, we will use a figure of 300.4 Trillion dollars as the asset base for issuing Credit and the trading of credit instruments.
According to the Bank for International Settlements (BIS), there is approximately 680 Trillion in Derivatives outstanding carried by European and American Banking systems, most of this is held by European Banks.
There was over 380 Trillion in Derivatives completely worthless and issued by Banking system without any underlying asset backing them until march of 2007. As real estate and stock markets dropped in response to the credit bubble created by over 300 trillion in worthless paper, the 380 Trillion has become over 520 Trillion in worthless unsecured paper held mainly by European Banking systems in late 2008.
The European banking system was ready to collapse in Oct of 2008 due to derivatives held mainly by Bank of England and French Banking families. The Federal Reserve had been sending Trillions to Europe in 2007 and 2008 to stave off collapse without success, there is just too much rot in European Banks. In Oct of 2008 AIG began to send Billions directly to banks in Europe while the Federal reserve continued sending trillions without legislative oversight or supervision.
This is the cause for worldwide Banking crisis, not subprime mortgages. that was nonsense swallowed by inept journalists and reporters too lazy to do their own research.
Fixing this will take the guts nobody has in Washington DC, regulating the Federal Reserve and allowing European Banks to fail.
#23 Alex – You’re mostly right, but subprime mortgages were the fuel for the CDO’s/CDS’s. They were bad assets passed off as being covered by CDO’s. Later chopped up and mixed with other things, they were the basis for all the CDS’s. They are the foundation for the swaps, items packeged and sold again and again. As long as they keep defaulting, the money has to continue to be paid out to pay those who essentially shorted the market.
If we just allow the issuers to go under, the bankruptcies will allow the swaps go away. No more liability: No more transfers of wealth.
after writing many with PMJ asking the question…Is the Congressional Pension Plan underwritten by AIG or any another contractural agreement in existance to guarantee this golden parachute? Just asking again?
coach
“Giving money of this type to AIG is meaningless. It is just IOU’s being exchanged or creds being redeemed.”
– - – - -
But, when I go to buy a loaf of bread with my own IOU’s, first, I find that my pile of IOU’s got smaller after taxes ran off with some, and then I realize that I’m bidding for that last loaf of bread against some guy with piles of those IOU’s – fresh-printed – falling from his pockets. And so I got no bread.
====================
“We live in an unreal economy based on crooked deals cut by people whose sole interest is their own.”
– - – -
Yeah, thank goodness! I was walking out the door this past Saturday morning, on the way to work, and I realized that I was working more overtime this month because I wanted to buy that new Ronco Fur-Lined Sink and Veggie Slicer, and it struck me that that’s the way it ought to be – me making choices for myself based on my own interests. I sure wouldn’t be working no overtime just because Aunt Grzylda wants more beer every week!
If you want to understand the messy financial situation of the USA (and the World), and have the patience to read it, open the following link. I guarantee that it will SHOCK you.
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
I predict that in six months (or less) the name of Joseph Cassano (from AIG) will be a household name (along with Bernie Madoff, Mike Milken, Enron, et al)