Hedge Fund Bridgewater Mulls U.S Toxic Asset Plan (Reuters)
“In a letter to clients, Bridgewater Associates: “From a macro perspective, this is a big transfer of money from the government to the banks (who are getting the higher prices for their assets) and to the buyers (who are probably going to get a heck of a deal because of the non-recourse loan and the easy access to leverage).
“If the government was operating in an economic way, it would not do this deal — it would deal with the banks’ finances separately and sell this insurance (i.e. the implied put arising from the non-recourse loan) for what it’s worth,” Bridgewater said in the letter.
“But, politics being what they are, this route is probably motivating this non-economic behavior. We are eager to see how it is received on the Hill,” it said.”
This would be awesome, if Geithner, Bernanke, Obama et al were subject to Bridgewater’s 360 review, wherein subordinates are supposed to tell their bosses what they’re doing wrong.
Hedge Fund Employee Pay May Drop 25% (Bloomberg)
With 70% of the single manager funds down, the industry will have to look at pay cuts across the board.
“Chief executive officers earned an average of $2 million last year, while chief investment officers made $1.4 million, according to Alpha’s survey. Senior portfolio managers took home $1.1 million and senior traders were paid $790,000.”
And of course there’s this.
U.S. Plan Seeking Expanded Power in Seizing Firms (NYT)
“It is precisely because of the lack of this authority that the A.I.G. situation has gotten worse,” Mr. Obama said, predicting that “there is going to be strong support from the American people and from Congress to provide that authority.”
Boehner says Geithner nonbank plan a power grab (Reuters)
“This is an unprecedented grab of power, and before that occurs, there ought to be a real debate about whether we should give that authority to the Treasury Secretary,” Boehner, an Ohio Republican, told reporters.
Senator Dodd’s Wife Worked As An Outside “Director” For A Bermuda-based Company Affiliated With AIG (NYP)
Presented without comment.
Dear AIG, I Quit (NYT)
Sent Tuesday by Jake DeSantis, an executive vice president of AIG’s financial products unit, to Ed Liddy.
“DEAR Mr. Liddy,
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
[...]
The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.
I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.
But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.”
Ford Chief Takes Cut (WSJ)
“Ford Chief Executive Alan Mulally’s base salary was $2 million in 2007 and remained unchanged in 2008, according to a preliminary company filing Tuesday with the Securities and Exchange Commission. But Mr. Mulally received no bonus in 2008 — compared to a $4 million bonus in 2007.
The CEO’s total compensation for 2008, including stock grants, was $13.6 million, down 37% from the comparable 2007 figure. The company earlier announced that Mr. Mulally will take a 30% salary cut in 2009 and 2010.”
Jake is right on. He was not responsible for AIG disasterous mistakes and we thrown under the bus as Liddy has no balls and cowered in front of Congress. Liddy is a big pu$$y. His retirement funds were impacted also, he is not at fault, and he had a legal agreement, to which now Geithner is saying, “I dunno”.
Jake keep the money or doante it. Get in front of the media and tell Congress what we all aready know, “suck it you corrupt and inept losers”.
You mean that there are actual people who work at AIG. I thought it was filled with Monty Burns, Scrooge McDuck and the Monopoly man.
Dear AIGer feeling the world wronged him and falling on his sword:
I am sorry you were a victim of guilt by association, provided I believe you knew nothing about the CDS’s. I don’t. If AIG went bankrupt in 08, you are an unsecured creditor, so much for your promise of a bonus in march 09. Go ask you former drinking buddies over at Lehman about their bonuses for 2009.
My vote was for the FEDS to grow a pair and say “sue us” forcing all of the AIG bonus recipients to sue one by one..in civil court, thus outing their names. Would they all pull a Seargent Schutlz and say they knew nothing about the CDS’s?
cos999, nice theory, but the fact is the company did not go bankrupt, period.
I would be fucking ecstatic if my pay only dropped 25%
If the government had done to me what it did to those AIG employees, I would have donated the money to Al Qaeda.
Wahhh. Wahhh. Wahhh.
Don’t play this “I’m not to blame” BS.
In fact, drop to your knees and thank the Lord that the masses didn’t carry out what many wanted and still want to do to those responsible.
Much of the “financial products and services” are games (i.e., garbage providing no tangible value to anyone other than to line your own pockets). It’s no different from Las Vegas (without the $6 lobster and bevvy of streetwalkers). Face it, you gambled and lost and now the rest of us have to pay the house for your greed and stupidity.
Don’t give us your sob story about how you weren’t responsible or didn’t know because you were either lying or stupid (or more than likely blinded by own pathetic sense of entitlement).
I worked at the HQ of a top 15 bank (at that time) in the 90s and remember a presentation introducing us to “derivatives.” Afterward, a number of us talked about it and the thought was unanimous: “WTF!! What kind of convoluted BS product is that?”
Trust me, I don’t think many of you know just how angry people are and guess what? They now have a target for their anger. Good luck.
@4 It’s a waste of time responding to the people who ventured over here from Yahoo
Oh yes, the downtrodden masses from Yahoo are soooooooo beneath you.
Bahahahahaahaha.
@7 you are the reason that Liddy should have stood up for his company. I’m sorry that you worked for a bank in the 90′s and don’t understand derivatives. I’m sure options are also over your head. The fact that we are letting mob rule determine the laws in this country is insane. Suddenly, lynch mobs will be in vogue and instead of burning crosses, you and your friends will be burning $ signs on people’s lawns. How would you determine between the 2?
DeSantis, sorry but you are way off base here…your company was toast last year, and if one of you got an offer to leave he would have been OUT THE DOOR pronto. There is no such thing as loyalty at a chop-shop like AIG.
@3 Outstanding Post!
@4 Yes, they did go bankrupt, and they took $180 Billion of OUR money with them! They are all crooks and should be tossed in prison. This dude wants to get a fat bonus for mopping up his company’s mess. Sure…but not on our dime! I hope the AGs track each one down and grabs the cash from their hands! Bonuses are based on your and YOUR COMPANY’S performance. AIG’s sucked so bad no one gets anything!
Now the AGs need to see what kind of sweetheart deal went on between Goldman-Paulson-AIG!!!!
the bottom line, the unwashed masses are up in arms about $160 million dollars, when they’ve been so desensitized to the magnitudes of money the government is spending they dont even mind that their monetary base is being devauled faster than a rabbit gets fucked by TRILLIONS.
$160million = RAGE WALL STREET BAILOUT ANGER BONUS FURY ROAAAAR
$2 TRILLION deficit = huh?
Typical Bud Lowenthal move…steal from taxpayers and then borrow from taxpayers to make restitution to taxpayers…the government should be ashamed of themselves if they allow this to occur!
Oppenheimer May Seek TARP Funds to Repay Auction-Rate Clients
March 24 (Bloomberg) — Oppenheimer & Co.’s Canadian parent said it may seek money from the U.S. government’s financial- bailout programs to repay brokerage customers facing losses on frozen auction-rate securities.
Oppenheimer Holdings Inc., based in Toronto, asked shareholders to approve an incorporation switch to Delaware, which would make the firm more likely to qualify for the rescue funds, according to a March 13 proxy statement. Money from the Treasury’s Troubled Asset Relief Program “could assist us” in repurchasing securities from clients trapped when the $330 billion auction-rate market seized up, the company said in the filing.
“It takes your breath away,” Anthony Sanders, a finance professor at Arizona State University, said in an interview. “We’re going to ask taxpayers, the people who got hurt by these securities, to pay for buying them back.” Sanders, a former head of mortgage-backed securities research at Deutsche Bank AG, testified before Congress this month on TARP fund use.
Federal and state regulators forced companies including New York-based Citigroup Inc. and UBS AG of Zurich to buy back more than $50 billion of auction-rate securities that plunged in value in February 2008 after underwriters pulled out of the market. Oppenheimer Holdings, whose retail clients were stuck with about $930 million of the debt, said in a March 3 regulatory filing that repurchasing the securities “would likely have a material adverse effect” on its financial condition.
Brian Maddox, a spokesman for the company, said getting TARP money is only one reason to reincorporate in the U.S. The move also would simplify its corporate structure and provide greater access to U.S. capital markets.
‘No Assurance’
“We have no assurance that we would qualify for” U.S. bailout funds, Oppenheimer Holdings said in the proxy statement, “nor have we determined that we would participate in any of these programs.”
Oppenheimer Holdings, formerly Fahnestock Viner Holdings Inc., owns Oppenheimer & Co., which is already incorporated in Delaware. The New York-based unit’s roots go back to the late Leon Levy and Jack Nash, founders of the hedge fund Odyssey Partners LP. The company is separate from OppenheimerFunds Inc., a unit of Massachusetts Mutual Life Insurance Co. of Springfield, Massachusetts.
Auction-rate securities typically are long-term bonds or preferred shares whose interest rates are set at weekly or monthly auctions run by broker-dealers. Wall Street firms marketed the securities as a cash equivalent that offered higher yields than conventional money-market funds.
Massachusetts Action
Many investors got stuck holding auction-rate securities when outside bidders disappeared and investment banks that ran the auctions refused to buy the securities.
After getting underwriters such as Citigroup to buy back the securities at face value, state regulators began focusing on banks and brokerages that resold the auction-rate debt.
In November, the Massachusetts Securities Division filed an administrative action seeking to compel Oppenheimer & Co. to make state residents whole on as much as $56 million of auction- rate securities.
The state said Oppenheimer & Co. promoted auction-rate securities to clients as Chief Executive Officer Albert Lowenthal and members of management sold their personal holdings amid the market’s decline. Oppenheimer Holdings denied the allegations at the time and said it planned to “vigorously” defend the brokerage unit.
Arbitration Claims
A Financial Industry Regulatory Authority arbitration panel last month ordered Credit Suisse Securities USA LLC of New York to pay some $400 million in fees to resolve claims it misled STMicroelectronics NV into buying auction-rate securities. At the time, experts said it could lead to a spate of other arbitration claims.
Oppenheimer & Co. was notified last month that two clients, US Airways Group Inc. and Hansen Beverage Co., had filed arbitration claims with FINRA, according to the firm’s March 3 annual report. US Airways, the Tempe, Arizona-based airline, wants Oppenheimer & Co. to buy back $250 million in auction-rate securities. Hansen Beverage is seeking to have a $60 million purchase rescinded.
“Many of our competitors have redeemed auction-rate securities from their customers and our failure to have done so presents a significant issue for us with our clients and regulators,” Oppenheimer Holdings said in its proxy statement.
Programs such as TARP, “might under certain circumstances provide the liquidity necessary” to redeem auction-rate securities held by clients.
Daniel Cravens, a spokesman for US Airways, declined to comment on the airline’s arbitration claim. Heather Marsh, an attorney at Hansen Natural Corp. of Corona, California, the parent company of Hansen Beverage, didn’t immediately return a call.
The funny thing about Opco’s move is that they didn’t even originate ARCs – the bought directly from GS and LEH.
@10 Yes you are sooooo much smarter than I and the rest of the unwashed masses.
I guess arrogance is all you have left. Good luck with that.
Jake:
Salary is for showing up and doing the job. Bonus is for doing the job well.
If you took a dollar salary with the guarantee of a bonus then you really did not work for a 1$. On the other hand if the bonus was based on a successful outcome rather than a guarantee then the 1$ salary claim is legit. When you work for a big company one of the negatives is that someone unrelated to you can ruin the company.
America
Is there any place in the letter where Jake justifies why he was paid such a large bonus? (I guess sale of the index business but didn’t that happen a long time ago.)
Seems to me he has rightfully projected his anger towards Mr. Liddy who made false promises. Given the audience chosen by using a newspaper I really don’t how why he anticipates gaining sympathy or who from.
So, hate to say it. But unless you can come up with an argument as to your value to the company beyond management promised me. (Guess what insolvent companies break a lot of promises.)
Mr. Jake, door, don’t let it hit you.
@16 why? because I don’t go after people with pitchforks and torches. Get a grip. I don’t need a ‘target for my anger.’ I think it is crazy that Congress and Obama are fanning the flames of mob rule. Instead of finding a target for your anger, why don’t you go back to worrying about yourself.
Jake, you’re a jerk.
20, you’re a pussy.
@18 “The profitability of the businesses with which I was associated clearly supported my compensation.”
19 – I really don’t get you guys.
Too big to fail. Ok, we get it. For the greater good (like that socialist reference) we had to bail out the people who caused the problems. You know what we stepped up to the plate, stopped out, and did it (no matter how sour a taste).
I would anticipate a small bit of humbleness from those being bailed out, instead we get continued unfounded arrogance.
Which leads to my second point. Why do you guys think you are so smart. Pretty much every product invented in the securitization fad failed and failed miserably. The typical response is oh, but look at the benefits to the little people of all the cool financial products we invented. I just don’t understand this one as mortgages, credit cards, student loans, all worked quite smoothly before the investment banks became involved (and continue to work smoothly at regional banks.)
So I ask you. Why still the arrogance and self-worth. What exactly was the value created by the last 10 years of financial innovation.
22 exactly my point. Can’t read Jake’s mind but quite sure he was referring to years before 2008 with that quote. I imagine AIG’s commodity business development department was effectively shut down in 2008. Ok, maybe he was instrumental in winding down the book, but I don’t know. After selling the index book, I don’t know if there is much for someone with that title to do.
@23- I don’t think you understand where I am coming from. I do not support any government bail out. BUT I believe that if the government wants to get their hands in the private sector then they should have written contracts that specifically did not allow bonuses. If that was the case then I would say too bad AIG employees you get nothing. Instead the government got in, realized they f’ed up and are now trying to put the blame on someone else.
I for one, work for a small company and my pay is performanced based. I am more concerned that the government can undo any contracts that they do not like after the fact.
I believe Liddy should have said, these are the contracts, they were there when I got there and we have promised that they will be upheld. Instead he cowered in front of Congress and said, well I guess they were unreasonable.
As far as financial innovation, they also said that S&P futures were a disaster waiting to happen. So I believe that there is some good use for derivatives. But like any financial instrument, you have to understand them to use them. How many people were all of the sudden great day traders during the late 90′s tech boom, only to lose it all because they realized that the market does not always go up.
I smell a “constructive dismissal” lawsuit by Jake. He ain’t disappearing into the sunset and he ain’t getting paid like this ever again (he had a pretty sweet job for an insurance company exec). It’s lawsuit time fellas.
23 Agree totally. The arrogance and self-worth however is a by-product of the culture of chasing rewards. To achieve success you need to believe in yourself and your firm at all times and all costs.
Jake’s whining makes about as much sense as a Ford exec or assemblyline man saying — “Hey — but I only worked on the F-150, which sells well every year! Why am I getting fucked?”
If you are part of a big organization, you’ve got to accept that you’re economic well being is tied to that organization. The lockstep can float you or sink you. If you don’t like it, open your own shop.
Jake needs a nice big cup of STFU.
If he’s such a bad guy, what is the charge? Do the facts bear out _his_ unworthiness? In a trial he would get a chance to answer charges in full. In this mess, it’s assumed that the “greed” and “incompetence” of his employer attaches to this individually. The allegations are too vague to answer, and he has had no chance to give his side of the story.
Congress is making this a simple story to focus people’s anger. Ask yourself why they’re doing that.
“Anti-capitalists today claimed responsibility for vandalising the home of disgraced former Royal Bank of Scotland boss Sir Fred Goodwin.
Several windows in the ex-RBS chief executive’s luxury villa in Edinburgh were smashed and a Mercedes in the driveway damaged early this morning.
Sir Fred, who is at the centre of a huge row over his £16million pension, was said to be ‘shaken’ by the vandalism but was not thought to be at the house at the time.”
http://tinyurl.com/c3we8h
Everyone is yelling as if the bonus contracts were signed today. They weren’t. They were signed a long time ago so the question of whether anyone deserves anything is irrelevant. The whole point of contracts is that you have to honour them.
Erin Burnett has on a nice Red and Black outfit today
@12 Representative Waters! Well I lost that bet, guess you can use a computer.
31 AIG however is essentially bankrupt, which does in fact have an impact on the sanctity of contracts.
“Posted by guest, Mar 25, 2009 10:09AM
Everyone is yelling as if the bonus contracts were signed today. They weren’t. They were signed a long time ago so the question of whether anyone deserves anything is irrelevant. The whole point of contracts is that you have to honour them.”
Why is everyone missing this? The union guys don’t realize that this sets a precedent and the next contracts not to be honored will be theirs. Then they will get it.
35 Where have you been, dickhead? One of the reasons for supporting a reorg of the auto companies is so that they can renegotiate their labor contracts. Don’t you think AIG is effectively in reorg?
whoa whoa whoa, there 35. easy with that “logic” and “sense”.
#34, “essentially” is the operative word. You need to “declare bankruptcy” in order for all the Legal stuff to kick in, otherwise, you are still considered solvent.
@ 32 — was it ever determined whether or not she got a set of bolt-ons? Doesn’t look like it to me, but that’s just fine — more than a mouthful is wasted. And over time the perky A-cups hold up a LOT better.
Wow, Dambisa Moyo is speaking with Erin. Besides being way over educated (Osford, Harvard Business School, Goldman Sachs, etc) she is making a lot of sense. Basically she is saying that the African countries who do not take aid do better in the long run than those that do. Kind of reminds me of what people said about getting rid of welfare. The people who had to work for their welfare checks fared better in the long run than those who didn’t. This is what apparently, according to the elders in my family, Guiliani did in NY.
38 See 23 – I can’t say it better: “For the greater good we had to bail out the people who caused the problems. You know what we stepped up to the plate, stopped out, and did it (no matter how sour a taste). I would anticipate a small bit of humbleness from those being bailed out, instead we get continued unfounded arrogance.”
Which would include harping on the sanctity of contracts, based on a technicality.
I find most people are missing the point- Obama has an agenda thta goes far beyond AIG and this economic issue. His agneda is being carried out in multiplle levels.
He is tryiong to change America into his vision of a utopia. he wants to socialize med, cut large bonuses and recently has pushed to remove secret ballets for union workers. One doesnt need to be a history major or a student of Russian govt to see the similarities. I am not saying he is turning us commie. I do think he is removing the capitalism that made us unique in the world and fankly supiror to the rest of the nations.
AIG bonuses and the “tax” they were going to impose is just the wind before the storm. How many people leave the USA to get a heart transplant in France? How many leave France to come her for the same procedure? Socialism will ruin this country by remoeving the REWARD FOR TALENT and Obama makes Bush’s unilateral decision making look inexpensive and responsible.
Obama actually said he inherited at 1.4 Trillion deficet. I dont remeber how he expalined how his trippling it on the next admininstartion and generation is making that better? is it becuase its his deficet I am not sure i understnad his plan.
I love going to the ballet. I find the dancing soothing.
42: based on your spelling, you’re obviously an ignorant slob.
Why does everyone keep arguing over the legal and moral issue involved with this, and keep overlooking the fiscal issues? Let’s put it this way: You, taxpayer, have invested hundreds of billions of dollars in a company. You have two options. The first is to reneg on contracts (legal or not), and pay nothing to employees. As an end result the best employees leave, and you are left with people who read deal breaker all day. At best, your company keeps sucking up federal dollars for the next 5 years. At worst, it actually does go under. You have invested hundreds of billions of dollars and are left with nothing. The second option is to shut up, pay a hundred million that people were promised. As an end result, the best people stay, they wind the company down, and you get back half your investment (hundreds of billions).
So your choice. Spend a 100MM to make 100BB, or save 100MM to lose everything you already invested.
“Wow, Dambisa Moyo is speaking with Erin. Besides being way over educated (Osford, Harvard Business School, Goldman Sachs, etc)”
she went to undergrad and b-school, and that’s overeducated? get over your fear of books. also, GS is not a degree-granting institution, half-wit.
cos999@#3…
“My vote was for the FEDS to grow a pair and say “sue us” forcing all of the AIG bonus recipients to sue one by one..in civil court.”
Good Post. Let the clowns sue. Sue for what? Breach of contract? Damages?
Hahaha. In order to collect damages, one must first prove actual damages. What are their actual damages? Are they just vanquished expectations?
Unrealized expectations in and of themselves are not a basis for damages. What are their actual out-of-pocket damages? More like $Zero, don’t you think?
guest@#31…
“The whole point of contracts is that you have to honour them.”
Yeah. Honour them. ToolShed Liddy should have fired the clowns for cause in accordance with (from TGFD’s memory) contract Section 3, Para 3.14, Sub (b). Bess/EP posted the contract a week or so ago. Check it out.
Also, maybe those plaintiffs can find a jury somewhere who might agree with them.
The Guy from Delaware
44 The “best people”? There’s that arrogance again: what you see as the best people are actually the ones that caused the firm to collapse in the first place. Its not as simple as you’re making this out to be.
“Posted by guest, Mar 25, 2009 10:34AM
“Wow, Dambisa Moyo is speaking with Erin. Besides being way over educated (Osford, Harvard Business School, Goldman Sachs, etc)”
she went to undergrad and b-school, and that’s overeducated? get over your fear of books. also, GS is not a degree-granting institution, half-wit.”
She wasn’t pompous, despite the pedigree. I’ll match educations with you any time, don’t call me half wit. And, some would disagree with you and say they got their business education for life at GS. Degrees are fine, practical experience enhances the degree.
@48- when did I say she was pompous? Right, I didn’t. My issue was with you referring to her as “over educated,” which a) she’s not and b) like it would be a bad thing if she were.
#46, The Guy from Delaware…where the heck would you find a group of people who don’t have an opinion about AIG to even serve on a jury?
Sorry 49, that is the description we use among our friends, we are similarly over educated and cognizant of the fact that we don’t want to appear to be pompous assholes.
guest@#50…
TGFD’s point, exactly.
The Guy from Delaware
Everyone seems to be glossing over a basic issue… the money given to AIG was a loan for them to continue their operations. I highly doubt the morons in Congress have the ability to run a business the size of AIG. Unless they do, they need to shut up and let the company run. Otherwise, demand the loan be paid immediately, crash the company into the ground, and call it a day. I find it so frustrating that all these people are complaining about how “their” money is being used. STFU. Complain to Congress about how they are spending your money. This is the same as you paying the newspaper boy then complaining about the person he lent the money to. Go to the source. If you are unhappy with how things are being run, go call Obama or your Congressman.
#44 you’re right on. Good post.
Judging by the response, clearly the unwashed are too stupid to understand this basic concept due to the fact that they know absolutely nothing but are certain of everything.
54 See 47
Guest@#53…
“I highly doubt the morons in Congress have the ability to run a business the size of AIG.”
I highly doubt the morons in have the ability to run a business the size of AIG.
The Guy from Delaware
53 No one is glossing over the issue. True, the purpose of the loan was to allow AIG to continue their operations. It appears instead that the funds facilitated the looting of the AIG treasury. Which is the reason for all this anger.
guest@#53…
TGFD substituted “AIG” for “Congress” in my #56 post. It didn’t show up.
The Guy from Delaware
@TGFD… Yes, Congress is incapable of running their own show, which is why they prefer to point out other peoples’ failures… or wait, isn’t that what everyone is doing here.
Everyone is complicit in this ordeal (okay, other than you TGFD, who carries no debt). None of you were complaining when rates were low, capital was cheap, money flowed like water. As soon as it gets hard, everyone starts looking for some poor soul to string up and burn. Pathetic.
If you work at a bank and say you were not responsible, then everyone screams you are by association you evil capitalistic pig. To you, I say move to Russia.
If you are having a hard time paying your bills, try doing it with 50% less pay like those of us dumb enough to keep working at these ailing banks.
I am so fed up with all the misdirected anger.
If you haters want a civil servant to run AIG, I vote for Maxine Waters. She can unwind all the doohickeys and thingamabobs Goldman invented for AIG.
Out tax dollars will certainly be safe!
re AIG situation: Also see also “UK Hoodlums…”. Some good career advice that I learned very early was that “perception is reality”. Meaning that you can argue till you’re dead, but even if the facts and logic are solidly on your side you won’t necessarily win. Taking huge bonuses from a firm that is all but legally dead is just not something that’s gonna fly. Contract law, timing of the promises, calling the public stupid, all that is irrelevant.
@55,
I saw 47 and decided to ignore the self righteous indignation rooted in utter stupidity. I find it’s best to ignore the ignorant and stupid.
@61 where does it stop? If you give in on this, then you leave the door open for breaking any kind of contract just because people are up in arms. How would you like it if all of the sudden the government decided that your fixed rate 30yr mortgage was unfair. They then jack up the rate and put a special tax on you becasue despite the downturn you made money on it. If you think the AIG situation is ok, then be prepared to accept the government in all aspects of deals you make.
OK sorry but I just checked my reserve and I am a little short on sympathy for AIGer’s, their righteous rage notwithstanding.
Yeah, I bet this Eager Beaver was crying a river when Anderson and Enron went under and a lot of innocent people lost everything.
Sorry, stud! That is what a bonus is all about! If the team does good you get the upside – if the team screws the pooch while running a publicly traded hedge fund and suckles on the gov’s dugs, then you get nothing OTHER THAN YOUR FREAKIN SALARY!
Tuff Titty, Fat Boy, Life AINT FAIR. Welcome to the wonderful world of capitalism! People get screwed legally every day – except unlike you they aren’t making 100′s of thousands of dollars and have millions in the bank.
Nope they go broke. Lose their healthcare. Can’t find another job because your firm destroyed the whole industry. And then they suck it up without sending some bitchy letter to the CEO.
Good LUCK, Girlfriend!
“In Germany, they came first for the Communists, And I didn’t speak up because I wasn’t a Communist;
And then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist;
And then they came for the Jews, And I didn’t speak up because I wasn’t a Jew;
And then . . . they came for me . . . And by that time there was no one left to speak up.”
-Tax Chick
23
Because a lot of these people on wall street attended schools where they taught their whole life that they were special little snowflakes.
Should have sent Jack Nicholson to handle Liddy:
You can’t handle the truth!
Son, we live in a world that needs deals. And those deals have to be made by men with Bloombergs. Who’s gonna do it? You? You, Senator Dodd?
I have a greater responsibility than you can possibly fathom. You weep for AIG bonuses and you curse the banks. You have that luxury. You have the luxury of not knowing what I know: that bonuses, while tragic, probably saved taxpayer dollars. And my existence, while grotesque and incomprehensible to you, saves the global economy…You don’t want the truth. Because deep down, in places you don’t talk about at parties, you want me on that trading desk. You need me on that trading desk.
We use words like business model, risk, profit…we use these words as the backbone to a life spent building something. You use ‘em as a punchline.
I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the economic growth I provide, then questions the manner in which I provide it! I’d rather you just said thank you and went on your way. Otherwise, I suggest you pick up a spreadsheet and build a model. Either way, I don’t give a damn what you think you’re entitled to!
assmunch @ 64 – it’s Andersen.
What you fail to grasp is that the people affected by the AIG crap are the bankers, the accountants, the IT folks, the secretaries, etc. who work at these banks. Not you fuckwads in Kansas. Your ass is in a sling because your neighbor is mortgaged to his eyeballs. AIG didn’t destroy your 401(k), your neighbor did that to you. You did it to yourself. Our 401(k)s are gone. Our stock is worthless. Our spouses are unemployed. Our homes are worth less. We pay the same as you at the gas station. We pay the same as you at the grocery store. But we do it with less money.
So take your righteous indignation and blow it out your ass.
65 Very bad analogy. There’s very little sympathy among the general population for the AIG people not because they’re not “AIG people” (as loosely defined, meaning people that are bonus dependent). Its because most of them have recently been ass raped by the financial markets.
Oh you clowns bemoaning the sanctity of contract make me laugh — it’s been DEAD in the USA since 1934. Look up the “Gold Clause” cases.
The U.S. Supreme Court has already decided that the government can loot and expropriate at will.
I’m not exactly thrilled about congress’ grandstanding douchebags distracting the populace with “righteous indignation” about AIG FinPro dickheads’ bonuses, but the battle has been LONG LOST. So forgive me if I don’t get all Tom Paine for poor Jake DeSantis.
i don’t think jake was saying “i didn’t trade CDS so pay up, jerkies.” i think his point was “don’t threaten to kill my family because i worked with some jackasses.” which seems like a fair point to me.
@69 and those of us who work in those same financial markets haven’t also been ass raped but to a higher degree?
People seem to think that if you work for a bank you are sitting around in your billion dollar loft, drinking champagne, and laughing at the little people. This is so far from the truth.
People I know are worried about making ends meet, going into foreclosure, how to pay for clothes, food, etc. for their children. We are suffering the same consequences as many folks are around the country, but we are also now faced with having our pay cut in half.
My point was if we allow the government to target one group today, what’s to stop them from targeting another group tomorrow. Despite what people might think, we are all in this together. Our recovery is dependent on everyone.
If the federal government does take back the bonuses from all the banks, will they inject it back into the economy? Tarring and feathering one group does nothing to improve the condition of people elsewhere.
-TC
@71
What Jake said is that he wouldn’t have stayed if he knew he wasn’t going to be paid. That’s fair. We all know that base pay is peanuts and “bonus” is the variable portion of compensation in financial firms, not the frosting on the cake for producers. We also SHOULD know that any pay over $1MM must be called a “bonus” thanks to congressional legislation because shit like that is what they concern themselves with on the Hill.
The average outraged taxpayer is not even a taxpayer since half the country doesn’t even pay taxes. As one of the ones who do, I understand that you either have to pay these guys to stay and unwind the business or lose a $hitload more than $165MM – which isn’t even a rounding error on the $200 BILLION bailout of mostly foreign banks that the government kept the Zombie AIG alive to perform. Why not outrage about that?
@72
“Despite what people might think, we are all in this together.”
Ya, but Jake DeSantis just said he doesn’t want to be in it, together. I mean he quit AIG after blaming a small fraction of his buddies for all the problems. Read #28, that is exactly what you and Jake DeSantis sound like.
25, you backpeddle like Deion Sanders in man coverage.
Your BS elitist, arrogant attitude went out the window when you realized how outnumbered you were. Now that you realize that there was more than just one “huckleberry” or “common folk” from Yahoo here you want to talk about the legality of the contracts.
You really don’t get it, sweetheart. You’re not as smart, special or entitled as you think you are.
And for the record, those of us that “don’t understand derivatives” actually understand snake oil when we see it.
Funny, but Warren Buffet said he doesn’t invest in them because he “doesn’t understand derivatives.”
But of course, I’m sure you can circles around him. LOL
.
25, you backpeddle like Deion Sanders in man coverage.
Your BS elitist, arrogant attitude went out the window when you realized how outnumbered you were. Now that you realize that there was more than just one “huckleberry” or “common folk” from Yahoo here you want to talk about the legality of the contracts.
You really don’t get it, sweetheart. You’re not as smart, special or entitled as you think you are.
And for the record, those of us that “don’t understand derivatives” actually understand snake oil when we see it.
Funny, but Warren Buffet said he doesn’t invest in them because he “doesn’t understand derivatives.”
But of course, I’m sure you can run circles around him. LOL
@67
Very nicely done!
@73
The guys that blew up AIG are the last people on earth that you want winding down the company. They are probably engaged in a lot of duplicity and double dealing right now, like selling assets at a discount in exchange for future employment at the buyer. They should have been swept out of there at the start, without bonuses. Finally, the whole of AIG-FP should have been put under some sort of receivership operated by a new team of competent, properly incentivized professionals. That is what I am outraged about!
@67,
Quite the self-important drama queen, aren’t we?
“Jake is right on. He was not responsible for AIG disasterous mistakes…”
Yeah, no one has ever had their work contracts switched after they were negotiated. You must feel a lot of pain for those multi-millionaire UAW workers who had therir contracts switched at the last minute.
Before you start with your yahoo user comments I have worked in finance for one the firms that disappeared.
$1 was his salary, people.
Who knew this country was full of so many populist, propaganda spewing aholes. These bonus recipients should have kept the $ and gave a big middle finger to whoever tried to take it away. If congress really passed a law – leave the country since it is falling apart anyway being run and populated by so many idiots. If you don’t want to leave then move to Texas, buy a gun and shoot anyone who who shows up to have a chat on the topic.
@78
The guys who blew up AIG are long gone. The guys unwinding the deals are the ones who didn’t have a hand in blowing anything up. The news flash is that AIG had other businesses besides CDS that were very profitable. And, yeah, I know enough about structured fixed income products to know just how beneficial it is to have the group that set up those contracts unwind them.
If you want to clean house and fire everyone, okay. Maybe if they went into receivership that’s what would have happened. But giving people an incentive to stay and then not making good on your promise is a bait and switch which ensures that nobody who has any other options will ever work at these government run chop shops ever again.
I think they should have just allowed the damn thing to go bust because I think the systemic risk was overblown. I guarantee you that a bankruptcy judge would have upheld some version of that contract in order to unwind the business and minimize losses. this is what happens when Chris Dodd and Barney Frank become the decision makers.
@81 – *sigh*, unfortunately middle america can’t read beyond the headlines. take a walk through your local walmart some day. this is what america looks like, just because you and I sit around all day with a bunch of mba’s and lawyers, doesn’t mean everyone else does. there’s a reason shows like “are you smarter than a 5th grader” exist.
@ 81, 84
for DeSantis? or just Liddy?
Hey Jake, eat it!
“Wall Street executives feeling harassed by taxpayers outraged at their pay might take note of how Google’s ruling triumvirate fared in 2008: $1 in salary each, no bonus, no stock grants, and no stock options.”
http://news.cnet.com/8301-1023_3-10204209-93.html
And that is at a company that actually makes money.
@85 – both:
“Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid.”
Its very simple- let the company go bankrupt and all contracts go out the window- that’s the reason the guy on the F-150 line can’t complain when/if they restructure Chrylser in bankruptcy court. He worked for a losing company and he loses. However, if you keep the company solvent, the contracts stay. Government can’t have it both ways, if you want to have contract law, which is a bedrock of any functioning society. Both Bush and Obama neglected to outline the costs benefits of what they are doing to the people before acting (once again)- its like going to war in Iraq and promising there will be no casualties, its disingenuous and self defeating. All these actions should be a question of which is the least painful alternative, there is no “fair” here and the American people need to understand that.
Where did all these fucking bloody-mouthed communists come from? And why are they here? They should be over on Politico with their own damn kind
@89
When you started putting your hand in our pocket, socialist.
@ 87
He agreed to $1 pay. But with $1M + guaranteed bonus before taxes.
If AIG cash flows from operations were sufficient to pay for compensation, by all means, give the man his pay. But if AIG dipped into cash flows from tax payers / investors, then investors are well within their rights to question how their money was used.
Look, the point people are missing (especially the person comparing desantis to the F150 worker) is that the bonuses were given out and guaranteed knowingly in order to retain the people they needed, otherwise a lot of them would have fucked off to other firms…AIG management knowingly handed them out and reassured employees multiple times that it would be honored and even the Geitner etc. knew about them and okayed them because they felt it was necessary in order to retain the people to fix the mess. Management could have renegotiated these bonuses earlier in the year (may not have worked but they could have tried instead of doing the opposite of reassuring people that they would be paid) especially if Liddy was ‘supposedly’ outraged by them. If management gave some kind of indication that the bonuses might not be honored during the year (not at the very end after people have already put in their 12 months of work), then employees would at least know were they stand and be able to choose whether they want to stay at AIG. These people supposedly had other options, but chose to stay at AIG because they were told they would be rewarded for it.
Do AIG employees deserve to be paid such massive figures when their company is basically bankrupt? Thats not the fucking point. The point is that if someone promises you something for doing work, and you double check and triple check with them and each time they say yes you will get it, and then AFTER you have done all the work they (and the rest of the US) tell you to fuck off and you are not getting what was promised, that basically sucks (and definitely ain’t right).
Does it suck more than losing your job and being forced to sleep in the streets? Probably not, but thats also not the fucking point, because there are also starving Africans in darfur who are suffering more than all the homeless, unemployed Americans out there, but everyone knows it would be silly to say that this somehow lessens what the unemployed are going through.