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Relentless.
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quote:
Obama said Monday he has asked the Treasury Department to try to block $165 million in bonuses that insurer AIG plans to award to its staff, despite getting a bailout from the government to pay creditors.

Obama said he has directed Treasury Secretary Timothy Geithner to use the government's leverage as a lender and partial owner of AIG — and all legal measures — to try to block the payout of the money. Earlier this month, AIG reported that it lost $61.7 billion in the fourth quarter of 2008, the largest corporate loss in history.

The government has no business telling any company how to run...
But this is exactly what I warned about.

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Lockman
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If the government (Bush and Obama administrations) had let the losers like AIG fail as Santelli suggests, this would not be an issue. AIG would be no more and the people there who made the bad decisions would be unemployed, instead of receiving bonuses.

When you reward failure of any kind for businesses and individuals it creates a moral hazard. And as we have seen, you don't solve the initial problem, you only create a larger one.

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Let's Go METS!!!

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glassman
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people there who made the bad decisions would be unemployed, instead of receiving bonuses

so would 25% to 50% of the rest of the US...

what part of that is so hard to grasp?

AIG's money is going out the door to banks and financial institutions.

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Don't envy the happiness of those who live in a fool's paradise.

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Lockman
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Why should American Taxpayers be on the hook for all these bad decisions.
Let the system in place work and we would be in no worse shape then we are now.
The government could have come in after if it was found that the systems already in place didn't work. ie B/K.

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Let's Go METS!!!

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bdgee
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quote:
Originally posted by Lockman:
Why should American Taxpayers be on the hook for all these bad decisions.
Let the system in place work and we would be in no worse shape then we are now.
The government could have come in after if it was found that the systems already in place didn't work. ie B/K.

The system you seem to think would take care of everything didn't. The economy failed! Completely!

And what the govbernment is trying to do now is find a way to stop hard headed fools like you from starving to death, whether or not you like it. Do you really have no idea how close you are?

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Lockman
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Ya know that the government is involved to the tune of trillions of dollars I know how close I am.

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Let's Go METS!!!

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glassman
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the economy DID collapse....

the banks were broke. the taxpayers were ALREADY on the hook for Trillions thru the FDIC program which is a contract.

this ain't complicated.

you either pay alot now, or pay ahellofalot more in a little while.

and yes, alot of peopl need to go to jail cuz they broke the law

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Don't envy the happiness of those who live in a fool's paradise.

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bdgee
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"and yes, alot of peopl need to go to jail cuz they broke the law"

And so, the boat is sinking because the crew ignored appropriate maintainence and steered into dangerous waters without proper concern. Yes, some of them need to go to jail for their lazy attention and misdeeds.

But dammit, lets pull all the passengers out of the drink before we devote all of our attention to getting that pound of flesh. If we don't save the passengers first......

And then, it will be us that is responsible for allowing you and them to drown.

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Lockman
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Our economy is a system, there are steps to take when companies within the system fail. We have now bypassed the system and installed a willy nilly attempt to solve the problem. Eventually congress will get us so far underwater that the natural system of business won't have a chance to work.
When businesses fail it hurts, when people make bad decisions with money it hurts. But go back to previous recessions and the system takes care of itself.
Right now our congress is making bad decisions with our money and it's going to hurt, it's just a matter of how long where going to let this nonsense go on, as to how bad this is going to hurt.

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Let's Go METS!!!

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bdgee
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quote:
Originally posted by Lockman:
Our economy is a system, there are steps to take when companies within the system fail. We have now bypassed the system and installed a willy nilly attempt to solve the problem. Eventually congress will get us so far underwater that the natural system of business won't have a chance to work.
When businesses fail it hurts, when people make bad decisions with money it hurts. But go back to previous recessions and the system takes care of itself.
Right now our congress is making bad decisions with our money and it's going to hurt, it's just a matter of how long where going to let this nonsense go on, as to how bad this is going to hurt.

You are wrong. That "system" you want to leave us to is defunct....gone.....Kaputz. And guess who hold the bag by law and by contract?

If we, OUR government, that is, doesn't find a way to restart the economy then the government goes bankrupt....COMPLETELY. Then, without a court or a judge to rule on things because the government will be gone, what do you want to call it? You really wanna try surviving the aftermath? I don't. And I don't want you and all the many billions about Mother Earth to have to try that either.

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Lockman
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quote:
Originally posted by bdgee:
quote:
Originally posted by Lockman:
Our economy is a system, there are steps to take when companies within the system fail. We have now bypassed the system and installed a willy nilly attempt to solve the problem. Eventually congress will get us so far underwater that the natural system of business won't have a chance to work.
When businesses fail it hurts, when people make bad decisions with money it hurts. But go back to previous recessions and the system takes care of itself.
Right now our congress is making bad decisions with our money and it's going to hurt, it's just a matter of how long where going to let this nonsense go on, as to how bad this is going to hurt.

You are wrong. That "system" you want to leave us to is defunct....gone.....Kaputz. And guess who hold the bag by law and by contract?

If we, OUR government, that is, doesn't find a way to restart the economy then the government goes bankrupt....COMPLETELY. Then, without a court or a judge to rule on things because the government will be gone, what do you want to call it? You really wanna try surviving the aftermath? I don't. And I don't want you and all the many billions about Mother Earth to have to try that either.

There was no attempt to let the system work.
Now that we are in uncharted territory as to how things work it's going to take us that much longer to come out of this recession.
Think about who benefits from the government pumping money into these companies. The same people that caused the problem.

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Let's Go METS!!!

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glassman
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there was no attempt to save the system in '29.

and the people at Enron when it failed went right back to work too... think about it.

this wasn't about a bad company failing, this was the whole US economic system

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Don't envy the happiness of those who live in a fool's paradise.

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T e x
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You're running around in circles, Lock...

back up to the part where Glass estimates the number of jobs that would have been lost had we let AIG go under. And realize that most of those people had no idea--and still may not--what CDS is...

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Nashoba Holba Chepulechi
Adventures in microcapitalism...

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glassman
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CDSes are derivatives..

the derivatives market was intentioanlly set up to be deregulated...

this non-regulation policy was done by a GOP congress with Clinton's blessing. it's no surprise Hillary ended up in NY, and Chelsea ended up working in a hedge fund... favors.

there was quite a bit if concern expressed at the time, but it was done anyway...

the derivatives market is conservatively estimated at 40 TRILLION dollars...

i have no idea how they allowed it to get that big and without regulation...


think of it like this, you can take insurance out on your neghbors house, burn it down and collect the insurance. without going to jail..

the hedge funds have been forcing the prices of co's CDSes HIGHER, while shorting the co's stocks...


it's perfeclty legal like LSD was in 1960... nobody made it illegal....

so they could do it an dmake money? so they did... but i am not joking when i tell you that 50% unemployment worldwide is safe estimate for the damage these people could have done....

all that money would have gone to a few people too..

i just can't figure out who they are yet... lowly peons like me don't have access to that kind of intel.

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Don't envy the happiness of those who live in a fool's paradise.

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Propertymanager
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quote:
Now that we are in uncharted territory as to how things work it's going to take us that much longer to come out of this recession.
Think about who benefits from the government pumping money into these companies. The same people that caused the problem.

Yes! And furthermore, what we've told all these bad actors is that they're too big to fail. Take all the wild risks you want to in the future. If the risk pays off, you'll be wildly rich. If the risk fails, the taxpayer will bail you out. It's a no-lose proposition for these institutions!
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glassman
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ake all the wild risks you want to in the future

not if we re-create regulations like Glass Stegall to stop it...

Glass stegall was repealed by a GOP group, Gramm & Leach, and signed by Bill Clinton...

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Don't envy the happiness of those who live in a fool's paradise.

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Lockman
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quote:
Originally posted by glassman:
ake all the wild risks you want to in the future

not if we re-create regulations like Glass Stegall to stop it...

Glass stegall was repealed by a GOP group, Gramm & Leach, and signed by Bill Clinton...

Thoughtful regulation is good. Unfortunately we have a system of electing our congress where we allow large special interests to contribute/buy congressional seats.

These elected officals, worried more about re-election than doing what's in the best interest of the people who elected them (or at least think they elected them) pander to the special interests.

Your example of Glass Stengal is what happens when our congressmen and representatives are fronting for the special interests.
They unleashed a program that was twisted to serve a few and ultimatly caused serious problems in our financial community.

The present way of dealing with what they created has let them walk away with the fruits of their labor and left us holding the bag.

If AIG was so insolvent that the company could not continue to do business then they should have been allowed to go B/K and go through a restructuring and /or liquidation.

I'm not saying that people would not have lost their jobs and money would not have been lost, but a least an untangling of the problems would have been done under a system someone understood.

What was done, I still don't really understand what they where trying to accomplish. The government bought an 80% share in a company AIG, they left the same group that let the company fail to remain in control.

Now we have fiscal responsiblity of a company that we have no idea what it's worth or really what they do.
We obviously have no control over what they are doing with our money and our response to something they do as a matter of business is to jump around and complain we didn't know they were gonna do it.
Had they been allowed to solve their fiscal woes in the usual way, they either would have made deals with other companies or filed for B/K.
Had they filed for B/K then the government could have stepped in and got a clear picture of what caused the failure and worked out a program under the laws in place.
We the people would not now be under water for 180 billion and probably more.

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Let's Go METS!!!

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glassman
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Your example of Glass Stengal is what happens when our congressmen and representatives are fronting for the special interests.
They unleashed a program that was twisted to serve a few and ultimatly caused serious problems in our financial community.

The present way of dealing with what they created has let them walk away with the fruits of their labor and left us holding the bag.


yes! but they already left us holding the bag...

the bailouts are the only thing keeping the unemployment rate from going totally outa control..

"private capital" is all in peoples safe deposit boxes and safes...

nobody is willing to put their money in the market, nobody wants to buy IPO's, people have pulled their uninsured funds from the banks as fast as they can...

According to the FDIC 2008 Annual Report, the FDIC has only $19 billion to cover losses...
they are trying to BORROW another 500 billion too.. it's bad out there.

http://online.wsj.com/article/SB123630125365247061.html

it was under the mantra of deregualtion that all of these rules were repealed to allow this to happen...

it only took a coupe of years.. the uptick rule was repealed very recently..

the lobbyists that got all of this done had to b in on it..

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Don't envy the happiness of those who live in a fool's paradise.

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glassman
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this is in spite of the bailouts:


What Are the Odds of a Depression?

International evidence suggests there is a 20% chance our stock-market crash will lead to much worse.

The bottom line is that there is ample reason to worry about slipping into a depression. There is a roughly one-in-five chance that U.S. GDP and consumption will fall by 10% or more, something not seen since the early 1930s.

Our research classifies just two such U.S. events since 1870: the Great Depression from 1929 to 1933, with a macroeconomic decline by 25%, and the post-World War I years from 1917 to 1921, with a fall by 16%. We also assembled long-term data on GDP, consumption and stock-market returns for 33 other countries, sometimes going back as far as 1870. Our conjecture was that depressions would be closely connected to stock-market crashes (at least in the sense that a crash would signal a substantially increased chance of a depression).

Looking at all of the events from our 34-country history, we find that there is a 28% probability that a "minor depression" (macroeconomic decline of 10% or more) will occur when there is a stock-market crash. There is a 9% chance that a "major depression" (a fall of 25% or more) will occur when there is a stock-market crash. In reverse, the chance that a minor depression will also feature a stock-market crash is 73%. And major depressions are almost sure to have stock-market crashes (our data show the probability is 92%).



http://online.wsj.com/article/SB123612575524423967.html?mod=loomia&loomia_si=t0: a16:g2:r4:c0.0717114:b22718936

I wish I could be confident that the array of U.S. policies already in place and those likely forthcoming will be helpful. But I think it more likely that the economy will eventually recover despite these policies, rather than because of them.
Mr. Barro is a professor of economics at Harvard and a fellow at Stanford University's Hoover Institution.


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Don't envy the happiness of those who live in a fool's paradise.

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CashCowMoo
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This was all going on under Barney Frank's watch as well.

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It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so.

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T e x
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good gawd...

Clinton signed the commodities bill, too...

CCM, answer me this truthfully: did you sustain a head injury?

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Nashoba Holba Chepulechi
Adventures in microcapitalism...

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bdgee
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quote:
Originally posted by CashCowMoo:
This was all going on under Barney Frank's watch as well.

No, it was all going on under the republican administration's watch, Congress has no authority to direct the activities of the various oversight arms of the administration.

You need to stop the false accusations.

Lying is a sin.

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CashCowMoo
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quote:
Originally posted by bdgee:
quote:
Originally posted by CashCowMoo:
This was all going on under Barney Frank's watch as well.

No, it was all going on under the republican administration's watch, Congress has no authority to direct the activities of the various oversight arms of the administration.

You need to stop the false accusations.

Lying is a sin.

And you think Republican economic policies are bad....just wait.
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CashCowMoo
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quote:
Originally posted by T e x:
good gawd...

Clinton signed the commodities bill, too...

CCM, answer me this truthfully: did you sustain a head injury?

We are trying to figure that out the extent of that. There is a lot of wear and tear on a body for a U.S. Infantryman on multiple deployments. Of course that can be a joke to some to say oh he was hit by multiple IEDs so he cant make a sound discussion or point of view.

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It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so.

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T e x
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I'm not joking--I'm concerned.

Where are you in the process?

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Nashoba Holba Chepulechi
Adventures in microcapitalism...

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glassman
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we are all interested in your best interests cash.

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Don't envy the happiness of those who live in a fool's paradise.

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glassman
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And you think Republican economic policies are bad....just wait


cash, when Bush the first lost to Clinton i was working at a secure military base as a contractor.

i was working with marine security/anti-terror units and coasties that board drug ships etc. it was just after the gulf war...
seals lived all around me.. it was just up the road from where balckwater is now... and balckwater went there cuz of all the people that already lived right there.

when Clinton got elected i heard all of the same verbiage, and allot that was much worse from my co-workers civvies and milspecs...

we didn't collapse...

there is one America. it has GOPs and Democrats. non of 'em are perfect.

Obama is no more popular today than Bush 1 and 2 or Clinton was when they got elected...

i'm just trying to offer perspective to you with this... i've heard it all before... doom n gloom is just a bummer. choose a different path for YOURSELF and your family and friends....

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Don't envy the happiness of those who live in a fool's paradise.

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Machiavelli
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quote:
Originally posted by Relentless.:
quote:
Obama said Monday he has asked the Treasury Department to try to block $165 million in bonuses that insurer AIG plans to award to its staff, despite getting a bailout from the government to pay creditors.

Obama said he has directed Treasury Secretary Timothy Geithner to use the government's leverage as a lender and partial owner of AIG — and all legal measures — to try to block the payout of the money. Earlier this month, AIG reported that it lost $61.7 billion in the fourth quarter of 2008, the largest corporate loss in history.

The government has no business telling any company how to run...
But this is exactly what I warned about.

If the Gov't/Obama do not do anything then you and the public are pizzed... if they do something then you are pizzed anyways.... so damn if he does and damn if he doesn't...

It reminds me in the aftermath of 9/11 when the plans for WTC where being made... everyone was fighting for either a Freedom Tower or a Memorial... and no matter what was decided or done there will always be one side not happy or satisfied... damn if you do and damn if you don't...

As for the Gov't and AIG, I think the Gov't has the right to tell AIG what they can or can't do so long as they took the bailout money... they knew strings would most likely be attached... and rightfully so because obviously they are abusing it...

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Let the world change you... And you can change the world.

Ernesto "Che" Guevara de la Serna

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Lockman
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quote:
Originally posted by Machiavelli:

As for the Gov't and AIG, I think the Gov't has the right to tell AIG what they can or can't do so long as they took the bailout money... they knew strings would most likely be attached... and rightfully so because obviously they are abusing it... [/QB]

Apparently the government was so eager to get the bailout money into AIG's hands that they forgot to include any strings.
Something like this should have been handled in B/K court where the government officals know what their doing. Again our congress has shown their incompetance.

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Let's Go METS!!!

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Relentless.
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Nope.. It's all a scheme to induce the public's opinion. Same as was done with the whole gay marriage thing.
Government has no right to tell anyone how much to pay an employee, just as they have no right to decide who marries.

Because they wage these on air campaigns they get public opinion to allow them the power.

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wallymac
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quote:
Originally posted by Relentless.:
Nope.. It's all a scheme to induce the public's opinion. Same as was done with the whole gay marriage thing.
Government has no right to tell anyone how much to pay an employee, just as they have no right to decide who marries.

Because they wage these on air campaigns they get public opinion to allow them the power.

Since the Government has an 80% stake in AAIG now, I think they do have some rights, such as not paying bonuses to people that not only didn't perform but actually were part of the cause of the problem to begin with.

Basic business sense is that you don't reward someone for doing a bad job. Yes, I know that it's been common practice with financial institutions for quite sometime. Imagine being a stockholder of a public company that you bought because they paid dividends. Now they suspend those dividends because of bad decisions by the management and employees. Yet, they reward those same people with huge bonuses. Tell me you and other stock holders wouldn't be hiring lawyers to stop them and if not stop them from getting those bonuses then recouping some of your investment.

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wallymac
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AP
[q]Bad year or good, AIG employees got big bonuses
Tuesday March 17, 9:44 pm ET
By Stevenson Jacobs, AP Business Writer
AIG furor shines light on Wall Street practice of paying bonuses regardless of performance

NEW YORK (AP) -- A Wall Street firm loses billions of dollars, nearly destroying its business and crippling the nation's economy. But top executives still receive huge bonuses?
As crazy as that sounds to most Americans, paying such bonuses even after a company suffers big losses is common practice on Wall Street, and it's at the heart of the outrage surrounding insurer AIG.

Employees of the insurer's financial-products unit received $165 million in so-called "retention" bonuses -- payments designed to keep valued employees from quitting. They are paid out no matter whether the employee had a great year or a horrible one.

In Wall Street's high-stakes competitive culture, paying top people to stay in their jobs has been the norm for years.

"It's basically a bribe, so your employees don't bolt and take their clients with them," said Chuck Collins, a senior scholar at the Washingon-based Institute for Policy Studies and an executive compensation expert.

Even though most bonuses paid to Wall Street employees are tied to performance, retention bonuses have ignited anger since the government began pouring billions of dollars into the financial system to keep banking and insurance firms from collapsing.

Despite the uproar, the payments have continued at several firms, most recently at investment bank Merrill Lynch.[/q]

http://biz.yahoo.com/ap/090317/na_us_aig_bonus_culture.html?.v=2

[q]"Thus, last week, AIG 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. Something is deeply wrong with this outcome."

Critics say the government could have done more to prevent the AIG bonuses.

Peter Morici, a business professor at the University of Maryland, said the government could have forced AIG to re-negotiate the bonus contracts so employees would be paid less. He noted that the government demanded similar concessions from unionized autoworkers before agreeing to bail out General Motors and Chrysler.

"It seems like no effort was made to negotiate with the AIG people and that the government gave them whatever they want," Morici said. "If we forced autoworkers to take less, we could have done it with AIG employees."

As for AIG's argument that failure to pay the bonuses would send employees running for the exits, some experts say that would be just fine.

"There's a lot of unemployed Wall Street workers that could be brought in as fresh blood," said Stephen Davis, a senior fellow and expert on corporate governance at Yale University.

Otherwise, Davis said, paying bonuses to executives of faltering companies risks creating a "a grab-and-go culture."[/q]

Posts: 3255 | From: Los Angeles California | Registered: Jan 2006  |  IP: Logged | Report this post to a Moderator
glassman
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who was it who was saying that class warfare was about to break out? CNBC? and wasn't it people defending the outrageous paychecks that were saying things like class envy?

this is like the shots on Fort Sumter.... just the beginning of a major public movement.

--------------------
Don't envy the happiness of those who live in a fool's paradise.

Posts: 36378 | From: USA | Registered: Sep 2003  |  IP: Logged | Report this post to a Moderator
   

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