March 17, 2009

Tell Rep. Frank not so much with money for AIG

Are you upset about AIG's bonus fun? Tell someone...

Bottom line, we're giving bonuses to the very same people who cratered AIG. What did these people do? They wrote insurance policies without any money to pay losses and without even collecting enough in premiums. In a normal insurance company, that would be called fraud and these people who would be in jail. And we're talking about giving them bonuses because we're 'legally bound'? Yeah. Sure. What-the-fuck-ever.

Enough is enough.

Update - Originally I wrote this last night but this AM I saw this out of DealBook. And got pissed all over again.

As much as we might want to void those A.I.G. pay contracts, Pearl Meyer, a compensation consultant at Steven Hall & Partners, says it would put American business on a worse slippery slope than it already is. Business agreements of other companies that have taken taxpayer money might fall into question. Even companies that have not turned to Washington might seize the opportunity to break inconvenient contracts.

If government officials were to break the contracts, they would be “breaking a bond,” Ms. Meyer says. “They are raising a whole new question about the trust and commitment organizations have to their employees.” (The auto industry unions are facing a similar issue — but the big difference is that there is a negotiation; no one is unilaterally tearing up contracts.)

Ross, it's not like this folks are good, salt of the earth, rank and file. These guys collapsed the largest insurance company in the world. The guy who broke Barings went to jail. And we're talking about honoring the bonus contracts for a bunch of people who functionally committed fraud? REALLY?

The best excuse is this one...

But what about the commitment to taxpayers? Here is the second, perhaps more sobering thought: A.I.G. built this bomb, and it may be the only outfit that really knows how to defuse it.

A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not? They know how bad it is. They built it.

So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company. In the end, we may actually be better off if they can figure out how to unwind these tricky investments.

How about this... most of that would be covered under work product laws. It would be really hard to do that and not be accused of violating an NDA in effect prior to bonuses (with initial employment contracts). It would be super easy to get an injunction that would all but make these folks unemployable. As for them being recruited, it's highly unlikely considering that in the blink of an eye their accumulated profits have been wiped out and replaced with a massive loss.

There are more than 100,000 people, the vast majority of whom are now out of work, who could unwind these contracts. Are you really telling me we couldn't find someone cheaper? Who could then protect the book from a rogue?

Yeah, these excuses are worthless. And I'm sick of the ridiculous bullshit out of the Obama Administration... if this were McCain or Bush we'd all be just as goddamn angry.

Finally, if the UAW has to take a hit for something they didn't even do, then these fucko's surely have to take one for the shit they did.

Posted by mcblogger at March 17, 2009 10:56 AM

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