13
   

Chaos at AIG

 
 
farmerman
 
  1  
Reply Tue 17 Mar, 2009 01:14 pm
@Woiyo9,
Quote:
DontTreadOnMe(Post 3601883)
Why are you binging up Bush?


Because the AIG bailout was made on SEPT 17 @))*. Or did you forget in your zeal to paint Obama as the incompetent one. If Bush hadnt worded it so as to provide some control, you are now gonna blame Obama for not fixing it? your Logic is spun in the mills of the GOP , who dont want any solutions to the economic messes.
McGentrix
 
  1  
Reply Tue 17 Mar, 2009 01:17 pm
@farmerman,
Bush didn't word it, Bush signed it. Congress worded it and it was Dodd who put in the bit about bonuses being protected.

link
DontTreadOnMe
 
  1  
Reply Tue 17 Mar, 2009 01:31 pm
@McGentrix,
McGentrix wrote:

Bush didn't word it, Bush signed it. Congress worded it and it was Dodd who put in the bit about bonuses being protected.

link


yeah, he signed it. it's his baby. he was the president, remember?

he, and he alone had the power to kill it. veto ring a bell ?

but you don't address that, only what you want to. and what you want to is invariably what a democrat did or said.

but that's cool. keep on thinking "party first". that approach worked really well between 2001 and 2009.
farmerman
 
  1  
Reply Tue 17 Mar, 2009 01:38 pm
@DontTreadOnMe,
Everybody is full of ****. The AIG bailout was orchestrated by Paulson without any input from Congress. Both parties were steamed. LETS NOT LET REVISIONISM GET HOLD. Oh then while were at it lets look at the TARP bill
Quote:
Emergency Economic Stabilization Act of 2008, commonly referred to as a bailout of the U.S. financial system, is a law enacted in response to the global financial crisis of 2008 authorizing the United States Secretary of the Treasury to spend up to US$700 billion to purchase distressed assets, especially mortgage-backed securities, and make capital injections into banks.[1][2] Both foreign and domestic banks are included in the bailout. The Federal Reserve also extended help to American Express, whose bank-holding application it recently approved.[3] The Act was proposed by Treasury Secretary Henry Paulson during the global financial crisis of 2008.

The original proposal was three pages, as submitted to the United States House of Representatives. The purpose of the plan was to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. The text of the proposed law was expanded to 110 pages and was put forward as an amendment to H.R. 3997.[4] The amendment was rejected via a vote of the House of Representatives on September 29, 2008, by a margin of 228-205.[5]

On October 1, 2008, the Senate debated and voted on an amendment to H.R. 1424, which substituted a newly revised version of the Emergency Economic Stabilization Act of 2008 for the language of H.R. 1424.[6][7] The Senate accepted the amendment and passed the entire amended bill by a vote of 74-25.[8] Additional unrelated provisions added an estimated $150 billion to the cost of the package and increased the size of the bill to 451 pages.[9][10] See Public Law 110-343 for details on the added provisions. The amended version of H.R. 1424 was sent to the House for consideration, and on October 3, the House voted 263-171 to enact the bill into law.[6][11][12] President Bush signed the bill into law within hours of its enactment, creating a $700 billion Troubled Assets Relief Program to purchase failing bank assets.[13]


Both of these were heavily directed by the THEN WHite House in SEpt 2008 and Oct 2008. Obama wouldne even be president for another 3 to 4 months.

How the lying sacks'o'**** try to rewrite history. SHAME On You McG-youve at leat kept it above the waist until now.
Woiyo9
 
  1  
Reply Tue 17 Mar, 2009 01:43 pm
@farmerman,
You fail to remember, that Bush, Geitner, Paulson, Bernake, Dodd, Frank etc.....

were all in on the initial bailout.

This is Geitners baby.

How could they not know these bonus were coming?????
0 Replies
 
McGentrix
 
  1  
Reply Tue 17 Mar, 2009 01:58 pm
@farmerman,
farmerman wrote:

Everybody is full of ****. The AIG bailout was orchestrated by Paulson without any input from Congress. Both parties were steamed. LETS NOT LET REVISIONISM GET HOLD. Oh then while were at it lets look at the TARP bill
Quote:
Emergency Economic Stabilization Act of 2008, commonly referred to as a bailout of the U.S. financial system, is a law enacted in response to the global financial crisis of 2008 authorizing the United States Secretary of the Treasury to spend up to US$700 billion to purchase distressed assets, especially mortgage-backed securities, and make capital injections into banks.[1][2] Both foreign and domestic banks are included in the bailout. The Federal Reserve also extended help to American Express, whose bank-holding application it recently approved.[3] The Act was proposed by Treasury Secretary Henry Paulson during the global financial crisis of 2008.

The original proposal was three pages, as submitted to the United States House of Representatives. The purpose of the plan was to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. The text of the proposed law was expanded to 110 pages and was put forward as an amendment to H.R. 3997.[4] The amendment was rejected via a vote of the House of Representatives on September 29, 2008, by a margin of 228-205.[5]

On October 1, 2008, the Senate debated and voted on an amendment to H.R. 1424, which substituted a newly revised version of the Emergency Economic Stabilization Act of 2008 for the language of H.R. 1424.[6][7] The Senate accepted the amendment and passed the entire amended bill by a vote of 74-25.[8] Additional unrelated provisions added an estimated $150 billion to the cost of the package and increased the size of the bill to 451 pages.[9][10] See Public Law 110-343 for details on the added provisions. The amended version of H.R. 1424 was sent to the House for consideration, and on October 3, the House voted 263-171 to enact the bill into law.[6][11][12] President Bush signed the bill into law within hours of its enactment, creating a $700 billion Troubled Assets Relief Program to purchase failing bank assets.[13]


Both of these were heavily directed by the THEN WHite House in SEpt 2008 and Oct 2008. Obama wouldne even be president for another 3 to 4 months.

How the lying sacks'o'**** try to rewrite history. SHAME On You McG-youve at leat kept it above the waist until now.


Shame on me? For what exactly, disagreeing with you? Your own link states that the original was proposed by Paulson, which after much bru-ha-ha and didddling in Congress became the much larger TARP... written and debated and voted for in Congress. Last time I read the Constitution, I failed to read about the part where the Executive branch writes and then votes for it.

I created no revisionism farmerman. That's the way it works. Congress creates laws, President signs them or veto's them. BTW, you didn't address Dodd's input of the bonus clause, which was the thrust of my post. Did you read the link I included? Instead, you got huffy that I disagreed with you. You must be taking lessons from Setanta, he does the same thing.
McGentrix
 
  1  
Reply Tue 17 Mar, 2009 02:00 pm
@DontTreadOnMe,
DontTreadOnMe wrote:

McGentrix wrote:

Bush didn't word it, Bush signed it. Congress worded it and it was Dodd who put in the bit about bonuses being protected.

link


yeah, he signed it. it's his baby. he was the president, remember?

he, and he alone had the power to kill it. veto ring a bell ?

but you don't address that, only what you want to. and what you want to is invariably what a democrat did or said.

but that's cool. keep on thinking "party first". that approach worked really well between 2001 and 2009.


Are you on drugs?
farmerman
 
  1  
Reply Tue 17 Mar, 2009 02:08 pm
@McGentrix,
Quote:
On September 16, 2008, AIG suffered a liquidity crisis following the downgrade of its credit rating. Industry practice permits firms with high credit ratings to enter swaps with limited margin. When its credit rating was downgraded, the company was required to post collateral with its trading counter-parties, and this led to a liquidity crisis. The London unit of the world's largest insurer (by assets) sold credit protection Credit default swaps (CDS) on collateralized debt obligations (CDOs) that had declined in value.[4] The United States Federal Reserve, to prevent the company's collapse, and in order for AIG to meet its obligations to post additional collateral to credit default swap trading partners, announced the creation of a secured credit facility of up to US$85 billion, secured by the assets of AIG subsidiaries, in exchange for warrants for a 79.9% equity stake, the right to suspend dividends to previously issued common and preferred stock.[3][5][6] AIG announced the same day that its board accepted the terms of the Federal Reserve Bank's rescue package and secured credit facility.[7] This was the largest government bailout of a private company in U.S. history, though smaller than the bailout of Fannie Mae and Freddie Mac a week earlier.[8][9]

AIG's share prices fell over 95% to just $1.25 on September 16, 2008, from a 52-week high of $70.13. The company reported over $13.2 billion in losses in the first six months of the year.[10][11] The AIG Financial Products division headed by Joseph Cassano had entered into credit default swaps to insure $441 billion worth of securities originally rated AAA. Of those securities, $57.8 billion were structured debt securities backed by subprime loans.[12] CNN named Cassano as one of the "Ten Most Wanted: Culprits" of the 2008 financial collapse in the United States.[13]

As Lehman Brothers (the largest bankruptcy in U.S. history) suffered a major decline in share price, investors began comparing the types of securities held by AIG and Lehman, and found that AIG had valued its Alt-A and sub-prime mortgage-backed securities at 1.7 to 2 times the rates used by Lehman.[10] On September 14, 2008, AIG announced it was considering selling its aircraft leasing division, International Lease Finance Corporation, in an effort to raise necessary capital for the company.[10] The Federal Reserve has hired Morgan Stanley to determine if there are systemic risks to a failing AIG, and has asked private entities to supply short-term bridge loans to the company. In the meantime, New York regulators have approved AIG for $20 billion in borrowing from its subsidiaries.[14][15]

On September 16, AIG's stock dropped 60 percent at the market's opening.[16] The Federal Reserve continued to meet that day with major Wall Street investment firms to broker a deal to create a $75 billion line of credit to the company.[17] Rating agencies Moody's and Standard and Poor's downgraded their credit ratings on AIG's credit on concerns over continuing losses on mortgage-backed securities, forcing the company to deliver collateral of over $10 billion to certain creditors.[18][17] The New York Times later reported that talks on Wall Street had broken down and AIG may file for bankruptcy protection on Wednesday, September 17.[19] Just before the bailout by the US Federal Reserve, AIG former CEO Maurice (Hank) Greenberg sent an impassioned letter to AIG CEO Robert B. Willumstad offering his assistance in any way possible, ccing the Board of Directors. His offer was rebuffed.[20]


[edit] Federal Reserve bailout
On the evening of September 16, 2008, the Federal Reserve Bank's Board of Governors announced that the Federal Reserve Bank of New York had been authorized to create a 24-month credit-liquidity facility from which AIG may draw up to $85 billion. The loan is collateralized by the assets of AIG, including its non-regulated subsidiaries and the stock of "substantially all" its regulated subsidiaries, and has an interest rate of 850 basis points over the three-month London Interbank Offered Rate (LIBOR) (i.e., LIBOR plus 8.5%). In exchange for the credit facility, the U.S. government will receive warrants for a 79.9 percent equity stake in AIG, and has the right to suspend the payment of dividends to AIG common and preferred shareholders.[3][6] The credit facility was created under the auspices of Section 13(3) of the Federal Reserve Act.[6][21][22] AIG's board of directors announced approval of the loan transaction in a press release the same day. The announcement did not comment on the issuance of a warrant for 79.9% of AIG's equity, but the AIG 8-K filing of September 18, 2008, reporting the transaction to the Securities and Exchange Commission stated that a warrant for 79.9% of AIG shares had been issued to the Board of Governors of the Federal Reserve.[23][7][3] AIG drew down US$ 28 billion of the credit-liquidity facility on September 17, 2008.[24] On September 22, 2008, AIG was officially removed from the Dow Jones Industrial Average.[25] An additional $37.8 billion loan was extended in October. As of October 24, AIG has drawn a total of $90.3 billion from the emergency loan, of a total $122.8 billion.[26]

Maurice Greenberg, former CEO of AIG, on September 17, 2008, characterized the bailout as a nationalization of AIG. He also stated: he was “bewildered” by the situation and was at a loss over how the entire situation got out of control as it did.[27] On September 17, 2008, Federal Reserve Bank chair Ben Bernanke asked Treasury Secretary Henry Paulson join him, to call on members of Congress, to describe the need for case for a congressionally authorized bailout of the nation's banking system. Weeks later, Congress approved the Emergency Economic Stabilization Act of 2008.

AND it followed that the TARP was an outgrowth of the Fed;s authorizations to AIG. Bush's fingerprints were all over this. Even the original form was submitted by Paulson as draft legislation. The wording about bonuses was that "contractual obligations regarding executive remuneration to ensure retainage of key personnel,shall not be interefered with by these proceedings" S0mething like that. The wording for the bonuses has, as we see it now, Given the Obama admin some leeway to seek to stop them.(However, its gonna be a two sided story because all WAll Street compensation has "bonuses" built in to their compensation packages because of tax loopholes)

Youre looking for BLAME re: the bonuses. I never said that any Dem was NOT complicit. I was reacting to you and H2O man who are completely revisionist in your writing.
I must admit that the AIG bailout has
atbilized AIG and its assigns. --Thats good.

MAybe what we are seeing now, is a BOTTOM, and the other side of the hill could be forthcoming.
0 Replies
 
MagicBlackCat
 
  2  
Reply Tue 17 Mar, 2009 02:37 pm
It's really too bad the PROFITABLE & reliable business sectors that also have the AIG name are being lumped in with the one branch that did all the damage.

For example, PAG (Personal Auto Group) and other similar subsidiaries provide direct insurance products to consumers. There has been little mention of the profitable businesses which are up for sale to buyers in the news media. These will be the basis for the payback of the government loan. PAG is regulated by the Department of Insurance so it's insurance products are PROTECTED and stable. Of course no one wants to buy an AIG policy now, so the subsidiaries are left floundering on how to KEEP the business they have now while making it an attractive offer for buyers. New sales is virtually non exisistent. What if one of the bonuses mentioned in the articles were sales incentive bonuses for the profitable companies? Should the employees of those portions of the business refuse to pay sales bonuses because of this? It's hard to keep a company profitable if it can't make new sales and if there is no incentive for the sales agent to sell.

From an insiders point of view I can tell you, my workplace has cut off all merit increases this year, all travel expenses, parties, bonuses, and special payments yet I still have to go into work everyday and try and work expense savings projects with the same level of performance. (not a great motivator when I am already struggling to make my own house payment monthly) Heck, we can't even get approval money to take down a sign that says 'we are hiring' because it would cost too much. >.<

I guess what I'm trying to say is that there is more to AIG than just those who are slated to receive the bonuses mentioned...putting all AIG employees into the same bucket is like saying your grandmother stole the cow and so you should go to jail for it. Doesn't seem fair. Then again...life's not fair is it?
DontTreadOnMe
 
  1  
Reply Tue 17 Mar, 2009 02:39 pm
@McGentrix,
McGentrix wrote:

DontTreadOnMe wrote:

McGentrix wrote:

Bush didn't word it, Bush signed it. Congress worded it and it was Dodd who put in the bit about bonuses being protected.

link


yeah, he signed it. it's his baby. he was the president, remember?

he, and he alone had the power to kill it. veto ring a bell ?

but you don't address that, only what you want to. and what you want to is invariably what a democrat did or said.

but that's cool. keep on thinking "party first". that approach worked really well between 2001 and 2009.


Are you on drugs?


tah-dah!! mcg responds with a non-response once again.

but here's what i think about dodd;

1) he did the wrong thing in protecting bonus payments contracted previously to feb. '09.

2) he did the right thing with the amendment to the stim bill. also i agree that the tax on those bonus payments should be taxed high if the recipients choose to not return them.

3) dodd should donate the campaign funds he received from aig to secular charities

so should mccain. they probably all should.
0 Replies
 
roger
 
  2  
Reply Tue 17 Mar, 2009 03:06 pm
@MagicBlackCat,
MagicBlackCat wrote:

Heck, we can't even get approval money to take down a sign that says 'we are hiring' because it would cost too much. >.<


I'm glad some parts of this are actually funny.
0 Replies
 
spendius
 
  1  
Reply Tue 17 Mar, 2009 04:10 pm
The till got left open one way or another and human nature operating without a moral compass did what comes naturally.

Weaving the winds and sophistry won't alter that.
DontTreadOnMe
 
  1  
Reply Tue 17 Mar, 2009 05:26 pm
@spendius,
spendius wrote:

The till got left open one way or another and human nature operating without a moral compass did what comes naturally.

Weaving the winds and sophistry won't alter that.


which is why we cannot have an unregulated market. everybody else has to follow some kind of rules, what so special about big business ?
BillRM
 
  1  
Reply Tue 17 Mar, 2009 05:59 pm
@Linkat,
You do know they are an insurance company not a mortgage company and they got into trouble by writing polices to insure very complex mortgage back bonds not by being force by the government to write home mortgages!
spendius
 
  1  
Reply Tue 17 Mar, 2009 06:21 pm
@DontTreadOnMe,
Quote:
what so special about big business ?


Its bigness.
DontTreadOnMe
 
  1  
Reply Tue 17 Mar, 2009 06:39 pm
@spendius,
spendius wrote:

Quote:
what so special about big business ?


Its bigness.


i fear you may be right. at the same time, they need to be held accountable like everyone else.

i read an article earlier where the writer defended the "bonus" system of pay and criticized the straight salary system of pay. he felt that a person that knew how much they would receive whether or not they performed well would not try very hard. could possibly even hurt the company by a lazy attitude.

what i found interesting was that while he had a real problem with the salaried employee who went through the motions, he didn't have a problem with the guy who sank the company, contributed to a domino style collapse of the world banking system and cost the taxpayers a bunch of money.

it defies logic to bag on a guy who may or may not have performed well for a flat rate and champion a guy who royally screwed the pooch in exchange for a humongous amount of the foldin' stuff.

so see, simply being big doesn't make 'em right. it may make 'em richer, but it doesn't make 'em right.

might make 'em big rich assholes, though. Laughing

people tend to remember stuff like that...
spendius
 
  1  
Reply Tue 17 Mar, 2009 06:44 pm
@DontTreadOnMe,
Quote:
might make 'em big rich assholes, though.


They do say that the winners can laugh and the losers can suit themselves.
DontTreadOnMe
 
  0  
Reply Tue 17 Mar, 2009 07:14 pm
@spendius,
spendius wrote:

Quote:
might make 'em big rich assholes, though.


They do say that the winners can laugh..


they also say that the guillotine is an excellent cigar clipper. works best if the smoker is solidly chomping on the cigar when clipped.

0 Replies
 
Cycloptichorn
 
  0  
Reply Tue 17 Mar, 2009 07:20 pm
Josh Marshall points out over at TPM that there's every indication that the group getting these bailouts - AIGFP in London - will likely be charged with major fraud in the near future. And we're still paying the bonuses?

Cycloptichorn
H2O MAN
 
  0  
Reply Wed 18 Mar, 2009 10:38 am
@Cycloptichorn,


PrezBO and the liberals now OWN AIG, it's their baby.
 

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