I'm moving - I am so sick and tired of watching these freakin elected officials who are so beyond clueless, and so freakin' responsible, but yet deflect their place in things trying to cover up by blaming everyone else.
This AIG thing is just another ridiculous granstanding opportunity for these clowns.
They hide behind ignorant anger, when the TRUTH is that THEY, in many cases, are the ones who created the situation in the first place!
Let's run the FACTS.
AIG was on the verge of bankruptcy, where in my opinion it should have gone, and the government made the decision to basically save them, and prop them up and cover all their obligations. They have since and with that given AIG 100s of Billions. The pitch was that taxpayers would eventually make money on the bailout. We've since learned that the liklihood of that is about 5000 to 1. Regardless, we've given them a ton of money and will probably need to give a lot more in the future.
So the hubub, in case you are living under a rock is that AIG gave out a couple 100 MIL in bonus PROMISES to a bunch of employees so that they would not leave when everything broke down, or right before that.
Now let me tell you, this is obviously just my opinion, but our country was founded on PRINCIPALS. It wasn't founded on day to day change the rules, it was built to last a long time.
OK, so how does this relate to AIG? Well, lets say YOU worked for AIG and all this stuff happens and you're like "hey, I'm outta here, dude!" And me, being in charge of AIG, I say - ok, go - leave, you suck anyway, you helped create this crazy stuff! That's fine, but what if many do the same thing?
Now, let's look at the other side of this. We, the taxpayers, have "invested" if you want to call it that, 100s of Billions in AIG. If people start leaving in droves, who is going to run the company? Now, hey, I don't know what the deal is as far as if they had to pay the bonuses for real, or they were just taking advantage of the free money that the GOVERNMENT threw at them!
It shouldn't matter. The bottom line is, there are contracts signed. If in order to get ME, or YOU to stay you had to give us a bonus, and we signed contracts, why in the world would I or should I give it back, which is what one senator said absurdly?
Is it my fault that the company is screwed and I have to worry about my two kids, so I have to look for another job unless you give me a contract?
I think its disgusting that we are now rushing to blame everyone and anyone, except those really at fault. Those people are the ones making the rulebook up, which is the biggest problem we have.
Now, again, I don't have all the details, if something underhanded was done, then ok, fine, then it should be reversed.
But, it remains factual that the government is the one who did this, no one else. Let's be real, they are all running around like chickens without a head because they are scared, and this is just another way to deflect where the real fault lies. And, that's with THEM, all of them. And if I got the bonus legitimately, there's no shot I would "give it back" and I would want to move to another country if they started to break contracts whenever they wanted. Are we now to move about the country as though it were a police state that can break contracts as they see fit?
OK, enough of this rubbish, market surprised me and rallied hard and strong once it came out that there was Talf news tomorrow, which is why I think we rallied, fyi. News rules this market, so I'm always listening, and thats what I heard.
NEWS RULES! Tomorrow we'll see, but usally a move like this sets up another nice trading day. And, you have to lean long off todays close fo sure!
CME I was wrong about it so far!
RULE!
Michael "Waxie" Parness
And, in the grand scheme of theme regardless, this is a drop in the bucket.
10 comments:
Amen! And what's even more sad is the fact that they are using the media to focus on the 1.2 B in bonus money to redirect everyone's attention away from the other 98.8 B of the 100 B they were given by Paulson.
In the front door and out the back of AIG to their constituents: GS, MS, DB, etc. etc. ad nauseum...
Top of the list: GS, where did Paulson come from : GS
Hmmmmmmm!!!!!
Waxie,
We had a trading bottom at 666 on the $spx. Will look to reshort on Dow 9100 or $spx 940.
Also oil looking bullish and short gold.
Nicasurfer
Waxie,
You sound as discouraged as I am when the market goes down. Don't you want this country to succeed? If the government had let AIG go bankrupt it would have been like a house of cards falling. (My husband says to tell you I'm an expert on every subject, but you probably already know that. :)) But seriously it seems to me that we're in uncharted waters and there is no clear path to take but we will muddle thru. I think you're wrong that the market is never coming back but time will tell.
There are no failures only learning experiences of what didn't work...in the future companies like AIG will probably tend to tie their bonuses to performance of the overall company.
Not to change the subject but how are you doing after the accident?
The naive one...
Lol. China found out this weekend they were bailing out Europe through the AIG backdoor.
HSBC
Deutsche Bank
Societe Generale
were among the top 10 AIG counterparties.
If you thought Beijing was pissed last week...
Waxie, principals are ppl who run schools. I think you meant "principles".
Waxie, Does that close look strong enough for you to think we should pick up enough FAS to cover our shorts or are they likely to squeeze shorts again going into the FOMC announcement? If so, perhaps we should pick up some FAS and sell it once the announcement spike seems to have run its course. IMHO it looked like all the bears left to party early and the market makers ran the stops. The SRS, FAZ and TWM just had a few hundred shares available at various prices to provide any support so stops appeared to go down like a stack of dominos. Only saw one large order for 12K in any of the level 3 quotes. Didn't see any invisible buyers filling orders. murf
Hi Waxie - I typically agree with you however I do disagree with you about AIG. AIG would not exist if not for a gov't bailout. Thus no one should receive bonus'. Also, the bonus should be based on performance, which is another reason they should not receive bonus...they did not perform, they didn't not perform for the share holder instead they drove share price down to $0. So why in the world contract or no contract should they be paid a bonus. Also, let the employee's leave, they drove the co. into the ground to begin with. I guarantee you in this econ. they will stay and gladly accept no bonus. It's clear that everything that is right and good about this country has plummeted with the stock market.
Howsweet
Waxie,
I think what is causing everyone to get upset is that most of us see bonuses differently then they do at AIG.
I have worked for very large companies Ernst & Young, Thomson Reuters, KPMG, Pearson Education (PSO) and I have worked for small and medium companies too. All of them (or at least the ones that gave a bonus) tied the bonus to how well the company did that year.
Since AIG has basically failed as a business and needs to be bailed-out to avoid bankruptcy, most people would assume that the employees would receive no bonus at all.
I don't remember the exact number but there were a lot of people getting $1 million or more as a bonus. Isn't it absurd that AIG would contractually obligate themsleves to give a million dollar bonus to an employee regardless of whether the company was performing well or not? Then what is the difference between your salary and your bonus except when and how often you receive it?
On the other hand, shouldn't the government have checked into this before giving AIG all this money? They gave the money with almost no strings attached and are now complaining about what they are doing with the money.
The whole situation is just FUBAR!
Dan
WOW. DID YOU SEE THE FOMC FADE!! AWESOME... WHAT ONE HELL OF A TRADING DAY!
Well, You got one point right in my opinion, however you are missing the larger picture and that is that one must have integrity in this world. After all this is all we have at the end of the day.
How can you question whether one should return the bonuses?? Of course they should if they have integrity! Yes they are entitled to them by the fact of their contract but tell me how much they would really have gotten without the governement cash injection?? Don't get me wrong I am neither condonning or rejecting the governement actions there, simply pointing out the fact that there would have been no money to pay bonuses at AIG without the government intervention. ..and probably no more jobs for more than a few at AIG.
What about making an appeal to those who got those bonuses to reflect on their sense of integrity rather than bashing the government about wanting the money back? ...and again i am not making any judgement on the government's actions.
Tomorrow's another day... Praise on your courage to discuss these issue on your blog, today though I thought you missed something important. Peace!
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