Thursday, March 19, 2009

Obama , AIG Bonuses and Wall Street'S Super-Size Ponzi Scheme Meanwhile the Friend of the People Rush Limbaugh Defends AIG Bonuses


UPDATE: 1:24 & 2:24 PM March 19 2009

Limbaugh calls those Americans who complain about these multi-million dollar bonuses to AIG executives as " Mere Peasants " who are too ignorant to know any better- this to me captures the attitude of the Blue Bloods who run the Republican Party and who are the leaders of the Conservative Movement in America. Wealthy Religious leaders and corrupt inept CEOS and wealthy TV and Radio personalities tell the average American they must learn to live within their means while they are exploited by the rich and powerful and the well connected.

Limbaugh like other conservatives has no sympathy for the average American who might be about to lose their job and their homes and their retirement fund since these people are as he and Rick Santelli & Cramer and Fox News tells them they are just poor spiteful "LOSERS" who deserve what they get .

When CEOs company fails the government bails them out when Joe the Plumber loses his job that his own fault. If thousands of Americans bought into the various Wall Street Ponzi Schemes well that's too bad as long as the majority of the super-wealthy are still doing well.

Note: Limbaugh signed a multi-million dollar contract last fall so what would he know about the average American except that they help him with his career and put food on his table and a roof over his head.

Maybe some day Limbaugh's radio audience will realize what a phony pretend populist he really is.

Limbaugh says these executives and CEOs are mere employees who need their bonuses which are a reflection of their outstanding work they have been doing- The problem for Limbaugh in his analysis is that these Executives brought down their institutions and so AIG etc. are begging for Bail-Out money from The US Government


Limbaugh Defends Bonuses For AIG- The Young Turks Cenk Uygur-March 18, 2009





Wall Street :One Big Ponzi Scheme
Playing Stock Market vs Roulette Wheel
And these Brainiacs and Financial Genuises why is anyone listening to them
They played the system and won Big Time what about you
Remember Santelli Don't Support Losers
Obama Time to be bold and fight Wall Street- They are not your friends

Anyway Obama has allowed himself to be manipulated by those around him who are true believers in Unfettered Capitalism so their advice to him is mainly to help out the rich and powerful and to hell with the average citizen. Well Obama has surely shown that he in this instance is not a progressive or socialist but believes in the status quo and is unwilling to start taking down names and issuing indictments . Time for a few FBI raids on Wall Street to apprehend the real criminals . But no the FBI and CIA are more interested in catching some poor bastard smoking a joint weed that is and put them in jail for seven years or so. Meanwhile the bozos who played fast and loose with the financial system go free along with the torturers who were only following orders and members of Cheney's Murder INC.

First a bit on Cheney and Gang rewriting history- Iraq has been a great success, torture they say was used and it does work,(well Jack Bauer says so) and trickle down economics works combined with deregulation and massive tax cuts for the wealthy, and the economic crisis has nothing to do with Bush, Cheney & co. but was caused by Obama though he's only been in power two months. Surely Bush or Cheney or FoxNews or Rush Limbaugh would never lie would they?

Facts v ideology & the rewriting of history.
Karen Finney to Ron Christie: You Can't Handle The Truth!- March 17, 2009




AIG Rewarding Losers
Fake Outrage By Politicians On AIG



Those Hit Hardest Get No Bailout By Amy Goodman of Democracy Now! at Truthdig.com March 17, 2009

Taxpayers’ bailout money for AIG bonuses has rightfully provoked a massive backlash against AIG, Wall Street, President Barack Obama and his economic advisers, Treasury Secretary Timothy Geithner and Larry Summers. The U.S. public now owns 80 percent of AIG. The outrage is bipartisan: Iowa Republican Sen. Charles Grassley even suggested that AIG executives “resign or go commit suicide.” New York State Attorney General Andrew Cuomo just released details on the bonuses, exposing AIG’s ridiculous claim that they are “retention bonuses” aimed at keeping key employees, since 11 of those who received bonuses of $1 million or more are no longer employed by AIG.

These AIG millionaires may need to return their unearned millions (Congress may pass a tax law aimed just at them, taxing their bonuses at 100 percent). But will the outrage help those who have been hardest hit by the economic meltdown? Will the hundreds of millions of dollars in various stimulus packages and bailouts find its way to regular people who are trying to get by, or will it go only to corporations deemed “too big to fail,” leaving behind millions of people who are, apparently, small enough to fail?

The Center for Social Inclusion has just issued a report on the economic meltdown and how best to solve the problem. It links race to the lack of opportunity and to the prevalence of the notorious subprime mortgages that triggered the economic crisis.

CSI Executive Director Maya Wiley told me, “We have to stimulate equality in order to stimulate the economy.” Access to education, transportation, housing and a clean environment give people a firm footing to respond to crisis and to succeed.


and she sums up :

...Obama has surrounded himself with financial advisers who are too cozy with Wall Street, like Summers and Geithner. It’s time to direct the stimulus to the people who need it, to those whose tax dollars are funding it.


also see:
"CEO Bonus Pay Rises Despite Poor Performances" Huffington Post via WSJ Julie Satow March 18, 2009

Brian E. Gray argues that the Obama administration legally can insist that certain criteria be met by those who receive bail-out money from the US federal Government and "may unilaterally amend any provision of this Agreement to the extent required to comply with any changes after the Signing Date in applicable federal statutes."


"Venality Bites" by Brian E. Gray Truthout March 18, 2009

... Although, it is true that the "government cannot just abrogate contracts" for no good reason, the law is clear that the United States has the authority to impose significant restrictions on the administration of both public and private contracts to ensure that the expenditure of federal funds is consistent with the public interest. Although, it is too late to void the A.I.G. bonuses, the administration's narrow reading of the law should not deter Congress from amending the Emergency Economic Stabilization Act of October 2008, the legislation that created TARP, to authorize the president or the secretary of the treasury to modify executive compensation agreements that are contrary to the purposes of the Act.

Article I, Section 10 of the Constitution provides that "No State ... shall pass any ... Law impairing the Obligation of Contracts," but the Supreme Court has held that the contracts clause is limited to state actions and is inapplicable to the federal government. Actions by the United States that allegedly impair contracts are governed instead by the Fifth Amendment's directive that no person "shall be deprived of ... property without due process of law." The Supreme Court's cases interpreting the due process clause distinguish between federal laws that may impair private contracts and laws that allegedly abrogate contracts to which the United States itself is a party. Under both sets of cases, the United States could have prevented A.I.G.'s use of TARP funds to pay executive bonuses, despite A.I.G.'s compensation agreements with its derivatives traders.

... Nor is there anything in the TARP contracts that either waives Congress's sovereign power to change the governing law or assigns financial liability for the risk of such legal changes to the United States. To the contrary, these contracts stipulate that the United States "may unilaterally amend any provision of this Agreement to the extent required to comply with any changes after the Signing Date in applicable federal statutes."

Under these circumstances, Congress is free to amend the Emergency Economic Stabilization Act to protect the regulatory scheme and to shore up the confidence of the millions of taxpayers whose hard-earned money is financing both A.I.G.'s past mismanagement and its ongoing cupidity. Contract rights - neither private nor public - stand in the way. As the Supreme Court recognized more than 50 years ago, "Those who do business in the regulated field cannot object if the legislative scheme is buttressed by subsequent amendments to achieve the legislative end."


Anyway these AIG employees can be compared to terrorists who have built a bomb which they know how to defuse but we don't so we give them a free pass if they will agree to defuse the bomb. So we reward them for constructing the bomb in the first place but it appears that it is more like a series of bombs and some have already been detonated. Where's Jack Bauer to knock some sense into them ? The economy has already been struck a few blows and now its time to round up the guilty parties . But instead the rich and powerful insists that their friends should be bailed out and their crimes left unpunished.

NYT's Sorkin Is Wrong: We Must Not Let the AIG Thieves Blackmail Us" by Jane Hamsher, Firedoglake March 17, 2009.

You don't let someone off the hook just because they tell you where the bodies are buried, you just agree not to fry them.

Andrew Sorkin writes a completely incoherent defense of paying out bonuses to AIG in the New York Times. It would hardly be worth consideration were it not for the fact that it may very well be what Timothy Geithner was thinking when he negotiated the deal to pay the bonuses out in the first place:

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.

It certainly explains the white paper obtained by FDL on Sunday which AIG wrote to explain its legal rational for paying the bonuses. Marcy Wheeler interprets it (rightly I believe) as a ransom note: Pay us or we blow the whole thing up

...People are outraged at the injustice of paying out billions in bonuses to AIG bankers, but they're also irate (and freaked out) about what it says about those in charge -- that they are so much a part of the fabric of the problem that they're incapable of seeing what it is, much less solving it. Paying off blackmail notes from architects of the fall is a great way to make things worse.

If the AIG executives have information they're not telling us, that's what grand juries are for. That should be the starting point of any negotiation. You don't let someone off the hook just because they tell you where the bodies are buried, you just agree not to fry them.


" More AIG Outrage: Bonus Details Revealed " by Steve Benen, Washington Monthly at 11:36 AM on March 17, 2009.

If these folks took the money and ran, doesn't it defeat the purpose of a "retention" payment?

What do you know, the AIG story can get worse.

Seventy-three employees were paid more than $1 million in the newly minted bonuses at the insurance giant, American International Group, according to the New York attorney general, Andrew M. Cuomo.

The attorney general provided some new details on Tuesday about some of the $160 million in bonuses that A.I.G. paid out last week in a letter sent to Representative Barney Frank, the chairman of the House Committee on Financial Services.

"A.I.G. made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees forcing a taxpayer bailout," Mr. Cuomo wrote in the letter. "Something is deeply wrong with this outcome."


Truthdig
Perp Walks Instead of Bonuses By Robert Scheer March 17, 2009

There must be a criminal investigation of the AIG debacle, and it looks as if New York’s top lawman is on the case. The collusion to save this toxic company in order to salvage the rogue financiers who conspired to enrich themselves by impoverishing millions is being revealed as the greatest financial scandal in U.S. history. Instead of taking bonuses, the culprits should be taking perp walks.

...However, the enablers are the AIG leaders who, as New York Attorney General Andrew Cuomo revealed Tuesday, signed those bonus contracts a year ago to reward the very people “principally responsible for the firm’s meltdown.” That’s a cool $44 million divided among the top 10 shysters, even though the depth of their chicanery was well known to top management.

As Cuomo noted in a letter to Rep. Barney Frank: “The contracts shockingly contain a provision that required most individuals’ bonuses to be 100% of their 2007 bonuses. Thus, in the spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before.”

The lame argument that those bonus-baby employees needed to be retained in order to sort out the mess they had created was also shot down by Cuomo, who revealed after his office’s initial investigation had pierced AIG’s veil of secrecy that “[e]leven of the individuals who received `retention’ bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million.”

and :

...Consider the $12.8 billion of the $170 billion that taxpayers gave AIG in bailout funds that AIG then secretly diverted to Goldman Sachs...It was the biggest payoff among those that AIG made to a score of foreign and domestic financial giants.

The bailout is a response to a banking crisis that resulted from the radical deregulation pushed by former Goldman Sachs honcho Robert Rubin when he was President Clinton’s treasury secretary. Another Goldman Sachs chairman-turned-treasury-secretary, Henry Paulson, in the Bush administration designed the trillion-dollar bank bailout that will go down as the greatest swindle in U.S. history.

and he concludes that the economic mess was caused by these insiders and their lobbyist influence in government and now they are paying themselves handsomely for what they have done:

What we have here is a rare glimpse into the workings of the billionaires’ club, that elite gang of perfectly legal loan sharks who, in only the most egregious cases, will be judged as criminals—Bernard Madoff, former chairman of NASDAQ, comes to mind. These other amoral sharks, who confiscated billions from shareholders and the 401(k) accounts of innocent victims, were rewarded handsomely, rarely needing to break the laws their lobbyists had purchased.

N.Y. Attorney General Investigates AIG’s ‘Staggering’ Bonus Mess Truthdig March 17, 2009


In a letter to House Financial Services Committee Chairman Barney Frank, reprinted here, New York Attorney General Andrew Cuomo shares what his office has discovered so far about AIG’s scandalous bonuses, which “made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout.


...AIG now claims that it had no choice but to pay these sums because of the unalterable terms of the plan. However, had the federal government not bailed out AIG with billions in taxpayer funds, the firm likely would have gone bankrupt, and surely no payments would have been made out of the plan. My Office has reviewed the legal opinion that AIG obtained from its own counsel, and it is not at all clear that these lawyers even considered the argument that it is only by the grace of American taxpayers that members of Financial Products even have jobs, let alone a pool of retention bonus money. I hope the Committee will take up this issue at its hearing tomorrow.

Furthermore, we know that AIG was able to bargain with its Financial Products employees since these employees have agreed to take salaries of $1 for 2009 in exchange for receiving their retention bonus packages. The fact that AIG engaged in this negotiation flies in the face of AIG’s assertion that it had no choice but to make these lavish multi-million dollar bonus payments. It appears that AIG had far more leverage than they now claim.

AIG also claims that retention of individuals at Financial Products was vital to unwinding the subsidiary’s business. However, to date, AIG has been unwilling to disclose the names of those who received these retention payments making it impossible to test their claim. Moreover, as detailed below, numerous individuals who received large “retention” bonuses are no longer at the firm. Until we obtain the names of these individuals, it is impossible to determine when and why they left the firm and how it is that they received these payments.


AIG's "Best and Brightest"? Try Dumb and Dumbest " By Maura Kelly, Comment Is Free. AlterNet.org March 18, 2009.


You don't have to be a financial expert to appreciate the irony in the letter that Edward Liddy, the government-appointed chairman of AIG, sent to Treasury secretary Timothy Geithner on Saturday.

To explain why bonuses of $165 million were needed to keep the top guys at the insurance giant, Liddy wrote: "I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them." And yet, he said, "We cannot attract and retain the best and the brightest talent to lead and staff the AIG businesses -- which are now being operated principally on behalf of American taxpayers -- if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."

The best and the brightest, huh? We are talking about the dudes at AIG's financial products division, which helped effect the sub-prime mortgage crisis and to nearly level the global economy too. (Until February 2008, the division was headed up by Joseph Cassano, named by CNN as one of the "Ten Most Wanted Culprits" of the financial collapse.) And yet there are some of Cassano's remaining colleagues, receiving individual bonuses as large as $6.5 million.



and :

Moreover, if AIG had been allowed to fail, would it still have been legally obligated to pay these bonuses? And why didn't the government foresee that this might happen and insist on a bonus cap as a condition of AIG's bailout? Surely the company would have had to accept. That the government didn't take such a simple measure to prevent this kind of gross abuse seems wildly short-sighted, and unbelievably daft.

But I don't think it's the government that's primarily to blame here. I do believe they bailed out AIG with the best intentions -- knowing they'd have to face angry voters (and the unforgiving annals of history) if the economic disaster got even worse. It's those "best and brightest" over at AIG who are really to blame. It's a shame that those jerks don't have to answer to anything -- not even (if their continued greed is any indication) their consciences. But what they're doing -- cheating honest taxpayers out of their money -- isn't all that far removed from what Bernie Madoff did.


Top bank officials at Citigroup and Morgan Stanley meeting to figure out ways to skirt compensation limits by Joe Sudbay at Americablog.comMarch 17, 2009

The top guys at AIG are trying to cheat honest taxpayers out of their money.

Wonder what is taking up the time of top officials at banks rescued with your tax dollars? You'd like to think they're all hunkered down trying to solve the crisis they created with help from George Bush and the GOP. According to Reuters, avoiding the salary caps is a top priority right now:

Anticipating restrictions on bonuses, officials at Citigroup Inc and Morgan Stanley are exploring ways to sidestep tough new federal caps on compensation, the Wall Street Journal said.

Executives at these banks and other financial institutions that received government aid are discussing increasing base salaries for some executives and other top-producing employees, the paper said, citing people familiar with the situation.

The discussions are at an early stage, partly because the government has not yet issued specific rules on the bonus payments that will be allowed at companies that received aid under the government's Troubled Asset Relief Program, the paper said.

Seriously, these people are tone deaf. They do not realize how hated they are in America right now. And, they aren't doing anything to ameliorate the situation. Instead, they're making it worse.


Citibank's CEO paid $11 million for 2008 by Chris in Paris at Americablog.com March 17, 2009

Citigroup awarded Chief Executive Vikram Pandit $10.82 million of compensation in 2008, a year in which the bank required two government rescues totaling more than $45 billion.

Citigroup also said it had nominated four new independent directors to help it recover following the government bailouts.

About $7.73 million of Pandit's total compensation was a sign-on bonus awarded in January 2008, a month after he became CEO, succeeding Charles Prince.

Wall Street compensation has come under intense scrutiny, especially at banks that have received taxpayer money from the government's Troubled Asset Relief Program. Citigroup has received $45 billion of TARP money.

Pandit did not receive a bonus for 2008 and has said he will accept no incentive pay and will accept base annual pay of $1 until Citigroup returns to profitability. The New York-based bank has not made money since the third quarter of 2007.

In 2008 Pandit was awarded a $958,333 salary, $9.84 million of stock and option awards including the sign-on bonus, and $16,193 of other compensation, according to a Citigroup proxy filing with the U.S. Securities and Exchange Commission on Monday.

Gosh. How does he get by with such a terrible pay plan? The country feels his pain.


-----
"More bailout bonuses for AIG? " by Chris in Paris Americablog.com March 17, 2009

I've had it with the "well, it's legal" crap with the AIG bonus payouts. Let's quit being cute about this and lower the boom. We all know AIG needs more money and that won't end any time soon. If they want to play the legal game, let's let the bastards go bankrupt and yes, this will likely destroy some others on Wall Street such as Goldman not to mention others. Let them declare bankruptcy and then get re-started where all previous deals are off. There hasn't been much of an issue with letting unions suffer such consequences and business such as the airlines have renegotiated so maybe it's time we push AIG (and their friends) to the brink and see who wants to scream chicken.

A failed AIG - as much as we all detest this company - is going to bad all around but playing this game is too much. Do the greedy people at AIG really want to be responsible for damaging the US and global economy any more than they've done so far?

With few legal options available, the White House may be forced to add millions of dollars in bonus payments to the outstanding debt owed by American International Group.

Earlier Monday, President Barack Obama expressed his outrage over AIG's payment of $165 million in bonuses, and ordered Treasury Secretary Tim Geithner to take all legal measures to block them.

However, sources tell CNBC, that there are few legal options available to the White House.

A U.S. Treasury official said that the Treasury will modify a planned $30 billion capital infusion for AIG to try to recoup hundreds of millions of dollars in controversial bonuses paid by the insurer.

The Treasury is finalizing the terms of its latest rescue package for AIG, announced on March 2, and will attach new provisions to it, the official said. The company was due to pay $165 billion in employee retention bonuses by Sunday to employees of AIG Financial Products, the unit that made bad bets on toxic mortgages and credit default swaps.

--------------------------
and so it goes,
GORD.

No comments: