Obama on Fiscal Responsibility

[bjorn_skurj]

Well, this is interesting (and certainly solves the problem).

 

from the NY Post:

 

WASHINGTON - Congressional Democrats vowed Tuesday to all but strip AIG executives of their $165 million in bonuses as expressions of outrage swelled in Congress over eye-catching extra income for employees of a firm that has received billions in taxpayer bailout funds.

 

In the House, Reps. Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would that would tax at 100 percent bonuses above $100,000 paid by companies that have received federal bailout money.

 

"We will use any means necessary," said Ryan. "It boggles my mind how these executives can be so unaware of what the American people are going through."

 

The Internal Revenue Service currently withholds 25 percent from bonuses less than $1 million and 35 percent for bonuses more than $1 million.

I am all for that. Yay Democracy!

[lost highway]

That's true, it is often these kinds of symbols that mobilize the populace and call on politicians and the press to answer the public call.

[futureage1]

AIG farmed out money to the following banks and financial institutions after they received the bailout money -

 

Total Bailout Via AIG

 

Goldman Sachs $12.90 billion

Soc Gen $11.90 billion

Deutsche Bank $11.80 billion

Barclays $8.50 billion

Merrill Lynch $6.80 billion

Bank of America $5.20 billion

UBS $5.00 billion

BNP Paribas $4.90 billion

HSBC $3.50 billion

Calyon $2.30 billion

Citigroup $2.30 billion

Dresdner $2.20 billion

DZ Bank $1.70 billion

Wachovia $1.50 billion

ING $1.50 billion

Morgan Stanley $1.20 billion

Bank of Montreal $1.10 billion

Rabobank $0.80 billion

Royal Bank of Scotland $0.70 billion

AIG Int'l $0.60 billion

KFW $0.50 billion

JP Morgan $0.40 billion

Credit Suisse $0.40 billion

Santander $0.30 billion

Paloma $0.20 billion

Citadel $0.20 billion

Danske $0.20 billion

Reconstruction Finance Corp $0.20 billion

Other $4.60 billion

 

TOTAL $93.40 billion

 

Source AIG

 

http://www.aig.com/Related-Resources_385_136430.html

 

Why are foreign banks getting bailout money?

[JUDE]

Well, this is interesting (and certainly solves the problem).

 

from the NY Post:

 

WASHINGTON - Congressional Democrats vowed Tuesday to all but strip AIG executives of their $165 million in bonuses as expressions of outrage swelled in Congress over eye-catching extra income for employees of a firm that has received billions in taxpayer bailout funds.

 

In the House, Reps. Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would that would tax at 100 percent bonuses above $100,000 paid by companies that have received federal bailout money.

 

"We will use any means necessary," said Ryan. "It boggles my mind how these executives can be so unaware of what the American people are going through."

 

The Internal Revenue Service currently withholds 25 percent from bonuses less than $1 million and 35 percent for bonuses more than $1 million.

 

They may be able to pass a bill that requires a withholding rate of 100% on bonuses funded by Federal bailout money, but I can

[bjorn_skurj]

AIG farmed out money to the following banks and financial institutions after they received the bailout money -

 

Total Bailout Via AIG

 

Goldman Sachs $12.90 billion

Soc Gen $11.90 billion

Deutsche Bank $11.80 billion

Barclays $8.50 billion

Merrill Lynch $6.80 billion

Bank of America $5.20 billion

UBS $5.00 billion

BNP Paribas $4.90 billion

HSBC $3.50 billion

Calyon $2.30 billion

Citigroup $2.30 billion

Dresdner $2.20 billion

DZ Bank $1.70 billion

Wachovia $1.50 billion

ING $1.50 billion

Morgan Stanley $1.20 billion

Bank of Montreal $1.10 billion

Rabobank $0.80 billion

Royal Bank of Scotland $0.70 billion

AIG Int'l $0.60 billion

KFW $0.50 billion

JP Morgan $0.40 billion

Credit Suisse $0.40 billion

Santander $0.30 billion

Paloma $0.20 billion

Citadel $0.20 billion

Danske $0.20 billion

Reconstruction Finance Corp $0.20 billion

Other $4.60 billion

 

TOTAL $93.40 billion

 

Source AIG

 

http://www.aig.com/Related-Resources_385_136430.html

 

Why are foreign banks getting bailout money?

Probably because they made shitty U.S. loans.

[Good Old Neon]

And so it goes...

 

AIG execs got bonuses and left, official says (keep in mind, these have been defended as "retention" bonuses)

 

http://www.cnn.com/2009/POLITICS/03/17/aig...uses/index.html

[futureage1]

Probably because they made shitty U.S. loans.

 

I like the entry of "other" 4.60 Billion. And my guess is that the foreign banks are investments and not loans. Definitely not the intended use of the bailout funds. But it's not like we will ever know. And maybe "other" is to shore up Congress' retirement funds? Who knows right?

[Good Old Neon]

As details emerge, Obama

[John Smith]

I need an example of when the government interfered and terminated a valid contract that was uncontested between the two parties (neither of which was the govt) that agreed to it. Or, failing that, the law that allows it to do so.*

 

Of course they don't do jack when the contracts are uncontested. The very nature of the courts is to adjudicate contested issues. In the current case the AIG situation, the issue is not contested between those recieving the cash and those paying it. If the contract is uncontested then there is no need to step in. The issue is more of an emotional one and one of what is right and what is wrong.

 

Clearly the payments are not to retain this "top notch talent" as many of the payments went to former employees. Clearly these payments are also not for positive performance as it appears that the $165mil in question appears to be headed towards the division that nearly brought the company down. Nope the issue is that we as taxpayers, and owners of the company, are paying big $$ out for what? Some of the shittiest work in the history of finance? How is that to be rewarded?

 

The air tight nature of these payments has been declared/decided by whom? Of course the people recieving the money and the people paying the money not proof of the air tight nature of the language on the contracts has been supplied. The contested nature of the current issue should be coming from the owners of the company, you and I. If you don't mind paying the big bucks to people for the sh#ttiest financial performance in history, then that is your choice. Me as a taxpayer am pissed as hell about it. But by all means lets pursue and hound people making $20/hour and tell them they earn too much. Lets cut food stamps because those people don't deserve it. Lets cut public health funding because those using it don't pay in. But by all means lets pay these fu*&ers out the yin yang for taking part in causing a world wide recession. Hell they earned it.

 

Sadly though this is turning into a partisan issue here. Here's my view on this, Shame congress for not putting any safeguards into the TARP legislation last fall. Shame the former president for insisting on strings free payments. And if Dodd really did insert language into the legislation guaranteeing the bonuses get paid, then Conn has two shitty senators and needs to get some new ones. Also Geithner is too close to the situation to actually be effective and objective. TARP needs to be handled by a third party or a board.

[bjorn_skurj]

I like the entry of "other" 4.60 Billion. And my guess is that the foreign banks are investments and not loans. Definitely not the intended use of the bailout funds. But it's not like we will ever know. And maybe "other" is to shore up Congress' retirement funds? Who knows right?

Man, you would think with all this money being flung around blindly I could get a couple two three thousand to fix my car.

[mfwahl]

These articles do a pretty good job explaining the foreign banks/AIG deal:

 

http://www.businessweek.com/bwdaily/dnflas...+temp_top+story

 

http://www.iht.com/articles/2009/03/16/business/views17.php

 

Once the bailout decision is made, and the funds are in, the rescuer doesn't get to choose which obligations are honored. That's especially true for A.I.G. The whole point of the rescue was to keep the mega-insurer from defaulting on its obligations.

 

Soci

[Good Old Neon]

Man, you would think with all this money being flung around blindly I could get a couple two three thousand to fix my car.

 

Amen. My car needs about $1200 worth of work to pass inspection (by the end of this month)

[mfwahl]

Amen. My car needs about $1200 worth of work to pass inspection (by the end of this month)

[Good Old Neon]

Move to Florida. No inspection. Seriously. You will never believe the stuff you see driving down the street. Some guy uses a boat as a car. I don't know how he got it to connect to the wheels or got a license plate for it but it really is a boat. It goes really slow but it's kind of like a convertible, which chicks like I hear.

 

I live in NH, the Live Free or Die state, in reality, the latter is the only real choice.

[John Smith]

Again, by law, when a company goes bankrupt, many of their debts are excused and obligations forgiven. That's the point of bankruptcy. Our laws incentivize companies to come back from bankruptcy by forgiving debts. It stinks if you are a creditor. But it's the law. Comparing the AIG situation to companies in bankruptcy is grapefruits to apples. AIG never declared bankruptcy. The bailout may have conveniently enabled them to avoid bankruptcy, but this is the reality we are faced with.

 

Also, Winston, I read an article recently that said that the bonuses were not deferred comp. Apparently, they were incentives to keep the employees around. On the theory, I guess, that it wouldn't be so easy to just replace employees to untangle the mess that the genuises at AIG created.

 

And, Winston, dollars are fungible. Bonuses paid by a company that needed to be bailed out are bonuses paid with bailout funds. By definition. I hope you aren't suggesting otherwise.

There are no laws saying debts are excused and or forgiven. There are laws allowing the companies to go to court to seek protection from creditors. And the laws give the courts leeway to re-negotiate the debts etc

[futureage1]

There are no laws saying debts are excused and or forgiven. There are laws allowing the companies to go to court to seek protection from creditors. And the laws give the courts leeway to re-negotiate the debts etc

[Guest Jules]

Wow, you guys are really into this huh?

[futureage1]

Meanwhile as we pay bonuses....

 

China Gains Key Assets In Spate of Purchases

Oil, Minerals Are Among Acquisitions Worldwide

 

 

SHANGHAI -- Chinese companies have been on a shopping spree in the past month, snapping up tens of billions of dollars' worth of key assets in Iran, Brazil, Russia, Venezuela, Australia and France in a global fire sale set off by the financial crisis.

 

The deals have allowed China to lock up supplies of oil, minerals, metals and other strategic natural resources it needs to continue to fuel its growth. The sheer scope of the agreements marks a shift in global finance, roiling energy markets and feeding worries about the future availability and prices of those commodities in other countries that compete for them, including the United States.

 

Just a few months ago, many countries were greeting such overtures from China with suspicion. Today, as corporations and banks in other parts of the world find themselves reluctant or unable to give out money to distressed companies, cash-rich China has become a major force driving new lending and investment.

 

 

http://www.washingtonpost.com/wp-dyn/conte...usiness/economy

[Good Old Neon]

Wow, you guys are really into this huh?

 

Like Rush on a muffin.

[lost highway]

The 1/1000th size of the bonuses is irrelevant. It is the action that is the driver here.

 

I agree with you in the sense that the bonuses are only as relevant as the financial sectors actions in general. They are symptoms.

 

Bonuses did not destroy our economy- the attitude that continues to pay them after a bailout, that is the kind of thing that did.

 

The heart of the entire issue is credit, usury, deregulation and a lack of industry.

[John Smith]

The bonuses for AIG when all TARP funds are accounted for is over $1 billion now. This last figure was just released Fri. and I lost track what funds these are attached to now. I have heard the figure $1.35 billion and you're right that is not even counting the other bank executives bonuses yet. Obama and Geithner really stepped in it. Getting bonuses back and giving them another $30 billion is just not going to work out well. It will go over like a ton of bricks. I think this is a turning point and if Obama doesn't do the right thing here I think his whole agenda will be compromised from his lack of credibility and change.

 

This all started last fall when the legislation was rushed through with little debate and with little accountability (by design) built into the TARP program. Half of the funds were dispersed too quickly and as it turns out we basically threw a lot of that money away. They should hold the remaining funding and re-work the legislation if that is legally possible. I am becoming more and more convinced that Geithener is no better equiped for his position than the last guy was. It seems a little more of the foxes guarding the hen house to me.

[futureage1]

The populist revolt has now started. There are also marches planned for April 3rd and 4th on Wall St.

 

 

http://takebacktheeconomy.org/

[mountain bed]

As details emerge, Obama

[futureage1]

This is the best article I have read about the meltdown yet. But I have to warn you it is going to make you very angry and it is also very sobering when laid out in clear concise language. Time to take the blinders off this isn't a Republican or Democrat issue. This is an American issue and a complete breakdown of the political process. And to all who argued the Govt. could not get involved in contracts. There are reports now surfacing that Dodd from CT. stuck a provision in the first bailout to retain bonus payments. A Democrat I might add. Obama is up to his neck in it and knew about the bonuses the whole time and now is out defending Geithner about it. What a fake. Happy reading...

 

 

http://www.villagevoice.com/2009-01-28/new...world-s-economy

 

 

 

PROVISION TO REIN IN AIG BONUSES WAS STRIPPED IN SECRET

 

Senator Ron Wyden said on Tuesday that the furor surrounding AIG's bonus payments could have been avoided had the Obama White House and members of Congress simply backed legislation that he and Sen. Olympia Snowe introduced more than a month ago.

 

In an interview with the Huffington Post, the Oregon Democrat noted that during the crafting of the stimulus package, he and his Republican colleague from Maine introduced a provision that would have forced bailout recipients to cap their bonuses at $100,000. Any amount paid above that would have been taxed at 35 percent. The language made it through the Senate, but during conference committee with the House, it was inexplicably removed.

 

Moreover, Wyden says frankly, the Obama administration should have been better prepared to handle what was an inevitable political train wreck.

 

"I will say that I talked to most of the key members of the Obama team and I was not able to convince them of the value of the amendment that I authored with Senator Snowe," he recalled. "I think it is unfortunate. I think it was an opportunity to send a careful, well-targeted message, which would have communicated how strongly the administration felt about blocking these excessive bonuses. I wasn't able to convince them."

 

http://www.huffingtonpost.com/2009/03/17/w...e_n_176084.html

[Good Old Neon]

It now appears as though AIG is being forced to give the money back