It was probably only a matter of time until the call for "blood, damnit, and, frankly, anyone's blood will do" got loud enough that being a customer of a particularly unpopular organization started to get dangerous. That time is at hand. Between calls to out the names of every U.S. customer of a given foreign bank, demands that AIGs counterparties be disclosed, salary and bonus figures for employees of organizations that, today, happen bear the ire of the public, and the customer of the Fed's discount window (or customers of any other of the Fed's wide ranging products for a modern financial world), it is quickly looking like there might not be a private transaction left in the country after July 2010. It is worth mentioning that, with the exception of depositors in Swiss banks, none of the people about to be exposed as involved in perfectly legal transactions, have even been indicted, much less convicted of committing any crime. Much as Goldman Sachs might make my toenails itch, the fact that they bought credit default swaps from AIG doesn't make them evil. (Well, not only that, anyhow). Nor is it particularly useful to know that a given AIG CDS customer is French. (Well, it's useful to us, but we make fun of the French for a living).
It doesn't help that the sole purpose of releasing these figures is to continue the current witch hunt in the ongoing campaign to blanket the country with "fairness." Nor is it particularly comforting that when confronted with the minor detail that confiscating funds from private citizens paid pursuant to a perfectly legal, private contract formed last year might be beyond "every single legal avenue" Tim "The Safecracker" Geithner might have available to him, the President, choked up with anger, has the following first response (according to Reuters):
"We don't have all the ... regulatory power that we need."
That deficiency doesn't look set to last for long. There is certainly a huge push in the direction of both regulatory x-ray specs and regulatory power. And, ironically, everyone in government seems to be pushing in the same direction.
Ron Paul's H.R. 1207, the "Federal Reserve Transparency Act of 2009," purposed "To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes," would, in effect, this would make public the vast majority of Fed transactions.
Consider what it would mean to have both a Fed with much expanded powers, and a Fed that is increasingly transparent to government and increasingly beholden to political whim. If we were talking about this sort of a power grab exercised in any other way than by proxy though the Fed it would be a constitutional non-starter. I sense the fingerprints of Rahm "You never want a serious crisis to go to waste" Emanuel all over this. But, the people, it seems, have spoken.
AIG Discloses Counterparties as Obama, Cuomo Assail Bonuses [Bloomberg]
Obama wants AIG bonuses blocked [Reuters]
Federal Reserve Transparency Act of 2009 [GovTrack]
Posted by guest , Mar 16, 2009 4:56PM
boo hoo
Posted by guest , Mar 16, 2009 5:11PM
Remind again why you would take a company public again?
Posted by Lowly Assistant , Mar 16, 2009 5:14PM
Like I said earlier today, I'm no fan of AIG, nor the contracts signed and submitted in early 2008. However, the fact that this is coming out after the initial deal/infusion (September/Paulson) and more recently (March/Safecracker) leaves no doubt in my mind that we need more government oversight like I need an asshole on my elbow. The fact that more "taxpayers" aren't fucking livid over this speaks volumes regarding our blind trust and sheer stupidity when it comes to (more)government intervention.
Posted by guest , Mar 16, 2009 5:29PM
Like cooooool, dude. After your whole site has spent months flashing up the news that we are all being ripped of by gangs of criminal incompetents manufacturing non existent profit out of non existent securities and stealing all they can of the results, I was like totally afraid people would conclude we need more "transparency" and more "regulation" like in FDR's or Eisenhower's days. All you have to say is let's don't go there, and I will be glad to roll our asses over so we can get f@cked out of the rest of it and nobody will know how.
Posted by guest , Mar 16, 2009 5:54PM
@4
Comment of the day.
Posted by guest , Mar 16, 2009 6:28PM
So, putting the AIG witch hunt aside, I'd like to better understand the position in this piece.
On the one hand, you are OK with trillions of dollars of taxpayer-derived aid going to private organizations that made poor decisions.
On the other, you feel that adequate disclosure of this aid would threaten the private, free market system and we'll be unable to have anymore private transactions?
The intellectual void there is so vast I don't even know where to begin.
"Let them eat cake."
Posted by guest , Mar 16, 2009 7:06PM
"Nor is it particularly comforting that when confronted with the minor detail that confiscating funds from private citizens paid pursuant to a perfectly legal, private contract formed last year . . ."
there is no way for you to know if these contracts are "perfectly legal." and there is no reason to believe aig's self serving statement concerning the matter.
Posted by guest , Mar 16, 2009 7:39PM
@7
Further to your point, contract law allows the voiding or novation of contracts which were written to those who committed fraud or would not have been entered into without the cover of fraud. If AIGFP isn't fraud, then what is?
Hard working Americans are being asked (or forced) to reset labor, pension and health insurance contracts as a result of the automaker restructuring.
Yet we are worried about the consequences w/r/t Rule of Law if we don't make payments on these contracts? What are these employees going to do? Sue AIG? Get in line...Its the one labelled "UNSECURED".
The Thesis: These contracts can be voided or novated legally. Someone has decided they shouldn't be. Someone is worried about information leakage. This is called "Hush Money".
Posted by guest , Mar 16, 2009 8:01PM
@8
Totally agree. Just fire the employees for cause and claw back the bonuses. If they want to fight, great, take it to court. This can all be done within the rule of law.
Posted by chernevik , Mar 16, 2009 8:05PM
Here's my problem with AIG: I don't understand how injecting capital to meet collateral calls is either necessary or sufficient to sustain the financing system. And given that it seems like such an odd decision, I'd like to know more -- especially since word is that a lot of that money went to the former Treasury Secretary's prior employer.
If AIG can't make collateral calls, but the wrapped assets are still performing, the counterparties don't have a cash flow problem. They may have to mark down their wrapped assets, which might make their counterparties nervous, but isn't _that_ the moment to do a bailout?
And if the government is supporting collateral calls, aren't we basically saying that the government is the ultimate insurer of those wrapped assets? If we're going to do that to save Goldman et al, shouldn't we also get a piece of the trades they've got that are still good, as well as a piece of the ones that went bad?
I suppose Paulson worried that a widespread writedown of the wrapped bonds would causes a writedown throughout the banking system. Maybe the system couldn't have managed the sudden rush of apparent insolvencies. But it seems to me that we're putting out a lot of money to play make-believe with valuations of wrapped mortgages, and not getting much upside in the real beneficiaries.
I get not disclosing borrowers at the discount window, I think the Swiss ought to tell Treasury to go away. But the AIG injections seem like elaborately justifications for special treatment, and I think we are entitled to know more about them.
Posted by Equity Private , Mar 16, 2009 8:12PM
["So, putting the AIG witch hunt aside, I'd like to better understand the position in this piece."]
Well of course. The witch hunt being the essence of what is offensive about all this, you would prefer to leave that out now, wouldn't you?
["On the one hand, you are OK with trillions of dollars of taxpayer-derived aid going to private organizations that made poor decisions."]
This is very sloppy reasoning, but this seems to be somewhat typical of these sorts of comments. I personally suspect it is the result of a sort of rabid political polarity. Fortunately or unfortunately, understanding anything written with more layers than a human-interest piece from Time magazine requires one to suspend, at least temporarily, this political rabies: The knee-jerk urge to classify everything by sorting into two categories:
1. Republican (read: evil) and 2. Other.
Never mind that Republican is not de facto "evil," or that I am not (nor do I think Bess is) by any stretch of the imagination, a Republican. But, when more sophisticated discussion fails, this is a sure-fire way to garner mindless support. Engage in Republibranding.
Of course, your analysis (when subjected to even the most trivial examination) begins to go foul right off the bat. No one at Dealbreaker is "OK with trillions of dollars of taxpayer-derived aid going to private organizations that made poor decisions." I recognize that this particular perversion you have inflicted on some straw man purporting to be our beliefs (but that was, in fact, hastily erected by someone else for similar purposes) is necessary for your argument to hold any water, but the obvious side effect is that your nonsense is totally dependent on this single assertion about our approval of bailouts being fact. It wouldn't be particularly hard to find rather convincing evidence of our distaste for bailouts in general, leading me to conclude that you merely wish to avoid finding any, or that you are terminally lazy. Either one is a bad omen for your argument.
Here comes the next poorly concealed attempt at rhetorical trickery:
["...you feel that adequate disclosure of this aid,"]
By making the level of disclosure proposed "adequate" (by decree, it seems) you've now transformed any objection to disclosure to some kind of attack on truth and justice. You assert (in the absence of any facts) that this particular type of disclosure is "adequate," and that, therefore, resisting it would, we are to believe, leave us stuck with "inadequate disclosure." Cute, but not even remotely convincing.
Even the most casual of critics will see that you are, in effect, turning the argument on its head and asserting that the absence of this one, particular kind of disclosure will somehow threaten the capitalist system. But, then, I suspect you are counting on that sort of critic not being present, or not likely to bother correcting your sloppy argumentation on Dealbreaker. I hope that you have made an error while performing this political calculation. We shall see.
["The intellectual void there is so vast I don't even know where to begin."]
Maybe you should begin by constructing an argument with even a vague connection to logical discourse, or an argument that doesn't begin by restating your opponent's position inaccurately and in horrendously bad faith? Just a suggestion.
["Like cooooool, dude. After your whole site has spent months flashing up the news that we are all being ripped of by gangs of criminal incompetents manufacturing non existent profit out of non existent securities and stealing all they can of the results, I was like totally afraid people would conclude we need more "transparency" and more "regulation" like in FDR's or Eisenhower's days. All you have to say is let's don't go there, and I will be glad to roll our asses over so we can get f@cked out of the rest of it and nobody will know how."]
I see. Because we find a particular, narrowly defined kind of disclosure misguided, we must, therefore, be for the elimination of all transparency of any kind. And, most obviously, we are tireless advocates for this position, soliciting donations for The Society for the Revival of His Excellency Benito Mussolini from the audience of the weekly Nuns v. Gladiators bicycle pump death-match event we host in what used to be Cheney's "secure undisclosed location." (We got it for a steal right after the election results were in).
["there is no way for you to know if these contracts are "perfectly legal." and there is no reason to believe aig's self serving statement concerning the matter."]
Actually, this betrays a rather poor understanding of the legal system in the United States. Someone has to actually present evidence that they are illegal before they are considered so. AIG's self-serving statement on the matter is (in fact, must be) believed for the purposes of legal consideration of the contracts, until shown to be false. I realize short-cuts are appealing here, since AIG is the devil incarnate, but due process really does have an important purpose, you should try to remember.
But it doesn't surprise me that this issue is (or is permitted to be) slippery for those with other agendas.
It should be obvious that these sorts of recriminations are from the more myopic (or agenda laden) of our readers. Typically, we take pains to ignore them. We would hope that any of our loyal readers who have taken the time to study our positions carefully enough to avoid merely applying "republican," "democratic," "capitalist," or "fascist" labels might see through this sort of nonsense, but we would hate for any of you to think us overly passive. And, of course, sometimes the pure ignorance of claims rises to the level that we choose to address them. This is one of those times. (Or it could just be the Vodka).
Consider the various agendas of the parties involved in and the various nuances of the issues presented by this mix:
1. Ron Paul: Among other things, he wants to abolish the Federal Reserve. Period. This isn't some secret, or some carefully extracted bit of investigative reporting. He's happy to tell anyone who asks that this is what he wants. Setting aside for a moment our view on whether this is a good idea or not (we don't think it is) the way he intends to go about it is not exactly the brightest of his ideas. His hope is that by playing up the outrage on the "secret" Fed transactions the general population might actually start to feel some sympathy for his Anti-Fed plan- particularly the xenophobic demographics, who can't be happy that SocGen is getting AIG money. He doesn't want transparency for the sake of transparency. He wants to create Federal Reserve Outrage. He doesn't care about a public audit one second longer than it takes to get people angry with the Fed.
Of course, it's not going to work that way. Abolishing the Fed is a fringe idea. If anything we are going to end up with a much stronger Fed. As usual, Paul is shooting himself in the foot here. Don't get me wrong. I like the guy. He's still shooting himself in the foot here.
This brings me to my next points:
2. AIG bonuses: Like it or not (and some dislike it enough to try and create complex and convoluted legal or fairness arguments to the contrary) these were legal employment agreements. There is nothing to suggest that they were anything else as the pathetic resort to "fraudulent conveyance" by Cuomo and others should make abundantly clear. You need only have a passing familiarity with the Uniform Fraudulent Transfer Act to understand why this smacks of desperation. You have PERHAPS an argument that this is a constructive fraudulent transfer if you can show that the levels of bonuses paid were out of line with the industry when the contracts were signed. Good luck with that.
This country is going to have to come to grips with the difference between "illegal" and "unpopular." If it can't, an the choking rage of a president is all it takes to seize private property without due process, well then it is the mob, not the president, who runs things.
3. Cuomo: He wants a witch hunt. Period. He smells executive compensation blood in the water and the more often he gets his name in the paper next to it the greater the NPV of his future political earnings gets. Of course, challenged to explain what regulatory purpose making public a series of private employment and compensation contracts serves is never discussed. Or, if it is, the discussion is ended with "The American People Have A Right To Know(tm)."
So... what you will actually end up with is the Fed... which was given a great deal of political insulation for a reason (and that reason was EXACTLY so The Beard could tell various Congressman "No" when he wanted to) is going to have much GREATER powers as we pour regulatory responsibility onto it and it will enjoy little or no privilege with respect to inquiries by Congress. Have you not been watching the same Congress as we have? Do you really think making the Fed into the private FinCEN of the House of Representatives is a good idea? The mob? Because make no mistake, Congress doesn't want the data so it can quietly review it in private. It wants to publish it far an wide to push the outrage momentum as far as possible.
This finance hunt isn't going to last forever. What happens when a different industry suddenly gets unpopular? Remember, you can't just run out and fire the Chairman of the Federal Reserve if he begins using that power in a way you don't like.
We also decided to pay particularly attention to comments on this entry because we originally discovered the Ron Paul legislation when a reader emailed us and urged us to run a story on a petition related to the legislation (pro or con we can't actually remember). Said reader had a particular idea how our story should be written (supposed by prose were were, I suspect, expected to include in our entry). When we hit the publish button on this piece and it turned out to be something other than a direct copy-paste of the suggested prose, and only featured Ron Paul's legislation as a part of our larger issue with the kind of transparency that seems all the rage lately, well, let's just say that our comments section seems to have become the forum for venting all that frustration. That's ok. Sometimes we are here to provide that service too.
Posted by Equity Private , Mar 16, 2009 8:22PM
[Totally agree. Just fire the employees for cause and claw back the bonuses. If they want to fight, great, take it to court. This can all be done within the rule of law.]
Sure, if you ignore wrongful termination, willful breach , retaliatory breach, fraud...
AND as a special bonus, the employee will likely be entitled to TREBLE DAMAGES since your breach was willful, wanton, malicious, vindictive, or oppressive.
Outstanding work #9! I hear the Treasury is hiring too!
Posted by Equity Private , Mar 16, 2009 8:27PM
"Further to your point, contract law allows the voiding or novation of contracts which were written to those who committed fraud or would not have been entered into without the cover of fraud. If AIGFP isn't fraud, then what is?"
I don't suppose it will surprise anyone at this stage when I point out that this comment is so far afield from reality when it comes to the doctrine of fraudulent conveyance that you would get more practical use out of watching ER re-runs to try and learn how to assault a fixed emplacement with light infantry...?
Posted by guest , Mar 16, 2009 8:43PM
Ooh SENSITIVE EP. You mean all those comments hit you right in the solar plexus where they should have hit you.
You have been portraying Wall Street as thieves, thugs and bimboes from day one and throwing every piece of potty mouthed humor at them you and your staff can think up, and now you are afraid we might want to be protected from them. Transparency is transparency. Just close your Swiss bank account, stash it somewhere safe like Antigua, pop a Zoloft and calm down.
Posted by Equity Private , Mar 16, 2009 8:57PM
"You have been portraying Wall Street as thieves, thugs and bimboes from day one and throwing every piece of potty mouthed humor at them you and your staff can think up,"
No, we have been portraying thieves, thugs, and bimboes as thieves, thugs and bimboes from day one. (We admire quite a number of Wall Street notables).
"and now you are afraid we might want to be protected from them."
This is a pretty big leap, as I think you know, from anything we said or could even tangentially be seen to advocate- not to mention that it's very sloppy reasoning to think that salary disclosure "protects you" from the evil cabal of "them" over there on Wall Street (hey, guys, the "them cabal" meeting tomorrow has been moved to Thursday, since 85 Broad is hosting the "those people" forum- just fyi). But, hey, whatever floats your submarine.
"Transparency is transparency."
I'm glad to hear it. We look forward to seeing your DOB, social security number, and a .jpg of your current driver's license or other valid state issued identification along with tax returns from the last three years posted in the next comment.
"Just close your Swiss bank account, stash it somewhere safe like Antigua, pop a Zoloft and calm down."
I don't bank in Switzerland or Antigua, and I have no interest in SSRIs.
Posted by guest , Mar 16, 2009 9:22PM
You don't bank in Switzerland or Antigua, and I don't need to have my SSN posted here, by your own rules. But I would like transparency to me and the other taxpayers from a company we 80% own. You're ready to tell ALL companies to take their stock back and keep their accounts secret. Why did they ever go public. Well they did, they sold themselves to the United States, and now they've sold themselves to us, we can fire them, sue them, ruin their retirements, and behave like real, A male owners are supposed to. In your book. If you're sorry for AIG tell their asses to cough up the bonusses and buy themselves back.
As for Switzerland, Antigua,Antilles, Fiji, Tonga and the other money laundering frauds, Woe to them! Weh ihr! Guai loro! Their days are over. The O can send the airforce and the navy into them for all I care. It makes a lot more sense than what we're doing in Iran and Iraq.
Posted by guest , Mar 16, 2009 9:25PM
Just as a terrorist attack does not justify tapping everyone's phones, similarly the collapse of financial institutions does not justify mob rule all of a sudden.
I would bt interested to know how many of you felt that Bush 'trampled on rights.' If Cuomo can start asking for people salaries where no crime has been committed, Dodd can ask for special taxes to bonuses, Baucus can call for AIG execs to commit suicide just because the government had to step in to save AIG - then I guess Bush and Cheney were within their full rights to do whatever necessary because the US govt had to step in big time to protect the country once 9/11 happened!!
Surprising how selective people are in interpetation of 'rights'.
To be clear, I totally agree that AIG is bankrupt and none of its 'conctracts' hold - outside of what the bankruptcy court decides to award. But the question is - who has created this whole sham of NOT declaring AIG as banktupt and taking it into conservatorship, hence annuling all contracts? Why did they do so? Did they have vested interest? If so, then why are they trying to imply that they have done something that they have not?
Posted by guest , Mar 16, 2009 9:29PM
Oh this is brilliant.
Eugene Robinson has an opinion piece out there in the WaPo which says : "He (Obama) should be ready to slug the next Wall St. trader he sees."
Nice huh? Lets see. If someone had suggested that Bush slug the next muslim that he sees - imagine what the reaction of the WaPo and Eugene Robinson would have been!
Posted by guest , Mar 16, 2009 9:32PM
>Well of course. The witch hunt being the essence of what is offensive
>about all this, you would prefer to leave that out now, wouldn't you?
We’ll start here. The reasoning for this statement was to separate out the argument about whether or not AIG should have paid out bonuses to employees at the AIG-FP group from whether or not the current oversight of the Federal Reserve is adequate. None of us are equipped with adequate information to understand the underlying employment contracts at AIG-FP so we don’t (and likely will never) know the answer to this question. We do know that, without stretching the definition too far, that fraud was committed. Contract law would generally allow voiding of such an employment contract. This position is like arguing that Madoff’s wife should benefit from his fraud (a very similar situation for an employee “not in the know”). It is untenable and, after much work by many underpaid legal public servants, will be held up in court.
>This is very sloppy reasoning, but this seems to be somewhat typical
>of these sorts of comments. I personally suspect it is the result of a
>sort of rabid political polarity. Fortunately or unfortunately,
>understanding anything written with more layers than a human-interest
>piece from Time magazine requires one to suspend, at least temporarily,
>this political rabies: The knee-jerk urge to classify everything by sorting
>into two categories
The reasoning isn’t sloppy at all. Note that, instead of addressing why the reasoning is sloppy you immediately jump into a personal attack about either (a) a “rabid political polarity” or (b) an inability to “understand anything written with more layers than a human-interest piece”. This type of argument, typically called a “red herring”, is meant to put a piece of information in the reader’s (or listener’s) mind but then move onto something that gets the heart rate up to make them forget what the argument was actually about.
The fact is that you, both historically and in this piece, have advocated against bail outs and other forms of government intervention. I too, share your views: the best government is a small government that maintains rule of law but not much else. Unfortunately, whether right or wrong, trillions of dollars have now been doled out to various private enterprises with very little oversight. These enterprises are widely owned however a small number of individuals have a disproportionate ownership position to the point that capitalizing them without adequate compensation does not serve the betterment of society as a whole. In fact, it rewards negligence but that is something we will talk about later.
To group a third party audit of the Federal Reserve into the same bucket as universal healthcare (implied by the title), populist revenge (implied in the article), or xenophobia (implied in comment #1) is just disingenuous. Unless you subscribe to an extremely radical economic theory to which I am not aware, the creation of money destroys private wealth. Supply and demand dictates that, if I increase the supply, the price will fall assuming constant demand. Unless we are to put on special glasses when viewing money, this position is solid.
As an (alleged) professional in the private equity community, surely you recognize the value of an audit and transparency. I’d search your prior blog (Going Private, a very nice blog BTW) and pull up a quote but I can’t be bothered at this point. Anyone who is a real investors knows this is the case. Yet, when it comes to the Federal Reserve and its various lending programs, you no longer believe that transparency is important? You, a vocal supporter of less government, write that this would result in there being “no private transactions left in the country after July 2010”? Surely you are not serious?
>Never mind that Republican is not de facto "evil," or that I am not
>(nor do I think Bess is) by any stretch of the imagination, a Republican.
>But, when more sophisticated discussion fails, this is a sure-fire way
>to garner mindless support. Engage in Republibranding.
I did, I will admit, seek to use your forum here to push a political point of view. And I did so aggressively. I did not, however, accuse either of you of being Republicans (nor, in full disclosure, am I). I actually find the Republican or Democrat tags to be nothing more than an easy way for lazy people to describe their world view. I merely said that, having been a long time reader, I thought there was a story for you to run w/r/t HR 1207. What I am now interested in is how personally you have taken the exchange and how violently opposed you are to further transparency at the Federal Reserve.
What you do next I really enjoy:
>Of course, your analysis (when subjected to even the most
>trivial examination) begins to go foul right off the bat. No
>one at Dealbreaker is "OK with trillions of dollars of
>taxpayer-derived aid going to private organizations that
>made poor decisions." I recognize that this particular
>perversion you have inflicted on some straw man
>purporting to be our beliefs (but that was, in fact, hastily
>erected by someone else for similar purposes) is necessary
>for your argument to hold any water, but the obvious side
>effect is that your nonsense is totally dependent on this
>single assertion about our approval of bailouts being fact.
>It wouldn't be particularly hard to find rather convincing
>evidence of our distaste for bailouts in general, leading me
>to conclude that you merely wish to avoid finding any, or
>that you are terminally lazy. Either one is a bad omen for
>your argument.
You can’t get a little bit pregnant here EP. It just doesn’t work like that. If you don’t support further transparency at the Fed, you are, de facto, supporting the bail-out. It is like leaving a $5 where a homeless alcoholic lives: You can tell yourself you didn’t buy him a drink but at the end of the day, you know where the money is going and you are a party to the effects.
To your point on GS, there is a concept in law called fraudulent conveyance [just noticed you discussed already re my prior post about voiding contracts, which BTW can and has been done]. This concept, a civil cause of action, is meant to prevent an “insider” from removing assets from a company indebted to others. An insider has been very broadly defined and could be construed to include GS’ relationship with AIG. They covered the company, they knew the exposure of the company and they assessed the risks. If there is an email or memo highlighting a worry by GS about AIG’s ability to make good on these CDS contracts, the whole transaction can be made null and void. I for one, am betting that this email exists and that it will be found eventually. We are still in the top of the second inning here.
Typically, I do not like to go on the personal attack rampage, however, since you have, not once or twice but three times tonight done so I cannot help myself:
It is good to know you are just a shill for the bankers and powers that be and not someone who wants to make the world better. You could have just responded to the email with, no, we can’t do that.
Posted by Equity Private , Mar 16, 2009 9:36PM
So, you've given the lie to "transparency is transparency," bit. Transparency is only transparency when YOU say it is transparency. Glad we got that cleared up.
After this you go on about a bunch of beliefs I don't hold. Then you seem to think that common (or preferred) shareholders suddenly have magical powers to arbitrarily "ruin retirements," and the like that no shareholder has ever in recent memory possessed in the United States, before proposing the use of military force to assist in foreign tax collection. Then you slip into some sort of drivel about our activities in Iran (perhaps a mushroom trip from the Carter Administration never quite ended for you?) which I would presume to be some expression of anti-imperialist sentiment but for the willingness to bomb Fiji back into the stone (coral?) age over their banking policies.
All in all not a bad showing for the average wingnut. This isn't your average wingnut hangout though, my friend. You are going to have to do quite a lot better, franjly. Your display was, in fact, more than a bit soft for the higher standards of wingnuttiness here at Dealbreaker. The average Dealbreaker whackjob has less expression of multiple personality disorder, and more of a hero-warship complex. Plus, even drunk, they type better.
Pull yourself together, man.
Posted by guest , Mar 16, 2009 10:07PM
"So, you've given the lie to "transparency is transparency," bit. Transparency is only transparency when YOU say it is transparency. Glad we got that cleared up."
I think you meant "You've given into the lie that" but I'm not sure.
Maybe guest isn't the one who should pull itself together?
Posted by Equity Private , Mar 16, 2009 10:09PM
"Contract law would generally allow voiding of such an employment contract. This position is like arguing that Madoff’s wife should benefit from his fraud (a very similar situation for an employee “not in the know”). It is untenable and, after much work by many underpaid legal public servants, will be held up in court."
Both your grasp of fraudulent conveyance and the specifics of the AIG case leave much to be desired.
Quiz for first year law students:
A. Distinguish Madoff's wife from AIG employee for the purposes of:
1. The case for restitution for unjust enrichment.
2. Rescission.
3. The Uniform Fraudulent Transfer Act. (Address both constructive or intentional transfer here).
B. What time periods constrain Fraudulent Conveyance in the case of pre-petition assets or payments?
C. In the case of post-petition assets or payments?
D. In the case of priority employee wages?
E. In the case of non-priority employee wages?
F. In the case of "key employees" for the purposes of "Administrative Costs" as a priority claim?
(Give you a hint: Unless you actually know law, don't try to impress law school grads with phrases like: "Contract law would generally allow voiding of such an employment contract" or "We do know that, without stretching the definition too far, that fraud was committed.")
Puh-lease.
Let's see, then in response to my accusation that your argument was sloppy you say "I know you are but what am I..." then you misuse "red herring" (ignoratio elenchi) where you meant "straw man." In fact, you should have stuck with argumentum ad hominem, as this is the worst I could be accused of in that particular passage (and this would stick, because I was calling you an idiot, after all). You go on to attribute to me rhetorical nuance I didn't even notice (the health care thing was particularly creative, but I was referring to a Harvey Birdman quote, not universal health care) and try to assert that a third party audit of the Fed is great because... well... because it's great!
Then, after taking some quotes out of context and engaging in your own argumentum ad hominem (fair is fair) you admit to trying to get us at Dealbreaker to further your political goals, but manage somehow to accuse me just a few lines later of being a "shill for the bankers and powers that be." A shill, clearly, being just fine when its for a cause you advocate.
But you can't quite get there without succumbing to the urge to engage in a second embarrassing attempt to teach us about "contract law," all the while badly confusing and mauling, not to mention using interchangeably, the concepts of rescission, restitution, bankruptcy priority and Fraudulent Conveyance.
Phew! That's a lot of backwards to squeeze into one reply! Good work!
Posted by guest , Mar 16, 2009 10:49PM
Hey EP lighten up a bit. I'm sorry I didn't take into account the literal meaning of your name. Private equity. No wonder you went manic and into long, long posts. I see what the problem is, it's classic. Indeed Roman, like the senator that set slaves to watch his sexy young wife and then wondered, quis custodiet ipsos custodes? Who will watch the selfsame watchmen? They're called "regulators." They don't dump your clients' SSN's and most intimate secrets onto the Net, but they need to see records all the same, and this country has been reducing them to nothing, and the senator's wife has been having so much sex with the slaves she can't stand up any more.
Wingnut hell. I'm from the same kind of Ivy League school you are. You don't realize that even the guys from Yale '53 are getting mad enough at all this insanity and corruption to bust skulls. AND bones.
Posted by guest , Mar 16, 2009 11:13PM
On the contrary (or I could have said au contraire just to throw off some fckn foreign words) the problem is that the masses / sheep were told by the powers that be that the regulators (appointed by the powers that be) were there to protect the interests of the masses. This let the masses get ripped off by the powers that be - who were in cahoots with the ones who were to be regulated.
Taking you fckd up anology and setting it right, it is like the pimp who supplied the young wives to the Senator providing the guards and telling the Senator that the guards were there to look after the Senator's interests. And when the guard went away lulled into that secure, protected feeling - the pimp made out with all the wives.
Moral of the story? Never trust any guard / regulator whoever appointed by someone else because there will always be some vested interests in play.
Interestingly, the most retardedly regulated firms have taken most of the taxpayer funds whereas those nasty unregulated pools of capital have taken bog losses in their stride without taking bailouts.
Now, why were we talking of regulation once again?
Posted by guest , Mar 16, 2009 11:28PM
And by the way, if autoworkers can "agree" that is be forced to give up all kinds of benefits and reduce their wages to keep their company going, explain why the new US owners of AIG can't get similar results with the traders in exotics that ruined it?
Posted by guest , Mar 16, 2009 11:32PM
25, because there are other autoworkers in this very country doing the same work and being more productive at it - who are getting paid less.
It was less of a 'giving up benefits' as it was getting down to industry benchmarks.
You still want to argue?
Posted by guest , Mar 17, 2009 12:06AM
To be very clear, since it is an axiom of all the perfectly conservative business sites and prints I have ever seen that transparency is the reason to invest in honest America and blunt forthright England, but not in slimy Indonesia and dubious Nigeria: what is "good" transparency to you?
America ITSELF owns AIG, and the salaries of public servants are public. What absolutely must be public about business for "transparency" to be achieved, especially when it demands the public money, but certainly in the ordinary way for investors and shareholders?
Also: Should American money be allowed to hide abroad? To escape taxes? I oppose that. If not to escape taxes, then to escape what?
Posted by guest , Mar 17, 2009 12:26AM
27, 3 problems with your logic.
1) America does not yet OWN AIG. They are putting on a cat and dog show but avoiding explicitly putting AIG into conservatorship or come sort of clear cut government control. Hence - America being a country of laws - the AG of NY does not have ANY reason or standing whatsoever to shoot off an order requesting salary details. Neither do you. You - the taxpayer's representatives have decided to give AIG money without legally taking over control. That is an issue to be resolved between you and you rep.
2) 'Transparency' is not the reason to invest but the fact that this is a land of laws. Know what? Russia is more transparent that this country - you know clearly who to deal with and how. That is not the idea. The idea is that things proceed following some laws. What is happening right now is not lawful but mob behavior.
3) Being a shareholder does not entitle you to most granular comp detail. There are reasons why compensation is confidential. I do not know if you have ever owned stock in a company but that does not grant you the right to know EVERYTHING about the company.
Posted by guest , Mar 17, 2009 5:38AM
1) 80% ownership by Barney Frank means there can legally be a big federal nose up your ass. Go Barney. They sold 80% of themselves to the US and asked for it.
2) Don't give me that. Honest factual accounts of what is in the company and why every quarter and down to the penny are due owners. That's transparency. You can't lie about it as Enron did or you go to JAIL. It's the law. Mob behavior to evade the law by Wall Street hedge funds dealers and traders is going to be answered by a larger mob of investors and owners.
3) There may be reasons why compensation is confidential, but not when the US Treasury pays for it. You'll find that out bloody soon.
4)Do you think you get to hide illegal money in fake nations and crime havens or not? Yes or no?
Posted by guest , Mar 17, 2009 5:38AM
1) 80% ownership by Barney Frank means there can legally be a big federal nose up your ass. Go Barney. They sold 80% of themselves to the US and asked for it.
2) Don't give me that. Honest factual accounts of what is in the company and why every quarter and down to the penny are due owners. That's transparency. You can't lie about it as Enron did or you go to JAIL. It's the law. Mob behavior to evade the law by Wall Street hedge funds dealers and traders is going to be answered by a larger mob of investors and owners.
3) There may be reasons why compensation is confidential, but not when the US Treasury pays for it. You'll find that out bloody soon.
4)Do you think you get to hide illegal money in fake nations and crime havens or not? Yes or no?
Posted by guest , Mar 17, 2009 12:19PM
@EP
[Sure, if you ignore wrongful termination, willful breach , retaliatory breach, fraud...
AND as a special bonus, the employee will likely be entitled to TREBLE DAMAGES since your breach was willful, wanton, malicious, vindictive, or oppressive.
Outstanding work #9! I hear the Treasury is hiring too!]
Sure, EP, if you ignore gross negligence, incompetence, and fraud or willful misconduct causing harm to AIG. All of these are standard "for cause" terms in a typical employment agreement.
Posted by Equity Private , Mar 17, 2009 12:30PM
"Sure, EP, if you ignore gross negligence, incompetence, and fraud or willful misconduct causing harm to AIG. All of these are standard "for cause" terms in a typical employment agreement."
I think you will have a hard time finding any of these. Also, that ship has sailed. Even the Treasury's own lawyers have taken up my position.
Posted by Novice , Mar 17, 2009 7:58PM
@ep/13 I once had a friend- a staff officer- propose writing a romance advice column as a tactical field guide.
Posted by guest , Mar 17, 2009 9:11PM
EP, you continue to prove yourself completely intellectual inflexibile to the point you don't really analyze anything. You just snark about whatever you can find from the desk of your computer.
I'm disappointed that your experience as a lawyer or in private equity has reduced you to a sorry shell of a human being. You are more than willing to shill about the sanctity of contracts for AIG bonus payments and the extreme importance of Federal Reserve opacity but become angry when hard working Americans are offered help to buy a new car.
It must be very interesting what goes on in your sociopathic mind. For a while, I hated you. Now, I have only pity. You hide behind your "education" but at the end of the day, you don't *really* know or care what you are talking about. A jack of all trades but master of none.
Posted by guest , Mar 18, 2009 2:42AM
@EP, 32 here again, you said,
"I think you will have a hard time finding any of these. Also, that ship has sailed. Even the Treasury's own lawyers have taken up my position."
There are statements out there that seem to confirm the negligence of certain AIG employees:
"I threw in a comment that if credit spreads were to widen the delta of the tranche would go up thus increasing the mark-to-market (MTM) sensitivity, and thus net credit exposure, of the trade. This the PM calmly brushed aside responding 'we are not MTM sensitive' as he reached for another piece of fruit."
http://www.acredittrader.com/?p=65
I am still uncertain why you persist in defending the indefensible. This is not just a case of risk taking but of gross negligence. Defending these people will not protect the rule of law, capitalism, or anything that you (and I) hold as important.