AIG Outrage
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- TheBlueOne0
"the government encouraged AIG to give bonuses and loans to low income families and illegals. "
AIG? Dude, what drugs are you on? Wow. I mean, wow.
- fannie, freddy, aig, china. who can tell anymore.monNom
- Pay attention, it's your government.TheBIueOne
- DrBombay0
Even if the government did want low income people to own homes. How do you square the credit default swaps and other ponzi style shit that was going on? Your whole argument neglects that MAJOR portion of the problem you fucking ignorant buffoon.
- TheBIueOne0
Why would AIG give bonuses or loans to low income families or illegals? AIG is a fucking insurance company. Your argument makes no sense...It's like saying "The government encouraged McDonald's to give reams of construction paper to small forrest creatures..."
- DrBombay0
it is always the uninformed people that are toeing this republican line man, wow.
- I don't think he is a legitimate guy..more troll like...TheBIueOne
- I mean no one can be THAT stupid...TheBIueOne
- well...I mean...nevermind..TheBIueOne
- TheBIueOne0
What Spitzer says:
http://www.slate.com/id/2213942/…
"Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?"
As my grandpa used to say, "Don't be distracted by shadows..."
- ********0
... my, oh my, oh my. What a day it was, today.
- utopian0
Dodd should be removed from the senate immediately, scumbag!
- But what about (at least 12-24 of) the other governmental idiots? Rs and Ds?********
- But what about (at least 12-24 of) the other governmental idiots? Rs and Ds?
- ********0
It's so cute when the serfs get upset.
- Because he was caught in yet another lie, or just because?********
- Because he was caught in yet another lie, or just because?
- ********0
Btw, does anyone see something wrong with Turbo Tax Tim Geithner's head, or is it just me?
- his nose bugs me more...TheBlueOne
- haha! "Pumpkin Head"********
- Frodo?ukit
- http://www.dvdbeaver…Mimio
- psenso0
What a beautifully executed political smokescreen. Distract a dumb and angry public from the government’s incompetence by distorting populist non-issues. Nicely played, Obama.
Maybe AIG is being used as a front to launder money. The US Government is giving AIG “Bailouts” so they can pay bailouts to people that are politically unpopular
So instead of having the news look at that fact OMG I am outraged by these bonuses we knew about in December and that we put special language to protect into the Stimulus bill... we are Outraged that they are happening.
Obama: Trolling and ruining the US economy For the Lulz
well played
- TheBlueOne0
"Distract a dumb and angry public from the government’s incompetence by distorting populist non-issues. "
And where you from 2002-8?
- There you go, pointing the finger backwards again.********
- There you go again, being an asshat,TheBlueOne
- But I do admire you usage of the Reagen syntax there in your phrasing. Your gray is showing.TheBlueOne
- There you go, pointing the finger backwards again.
- ukit0
Worth a read for an actual explanation of what happened...
http://www.fivethirtyeight.com/2…
The employees in AIG's Financial Products division (AIGFP) were compensated heavily -- perhaps almost exclusively -- via incentive-based compensation. That is, the employees got a profit share -- a rather generous 30 percent share -- of the earnings their division made by trading credit default options (CDOs) and related assets.
In the fourth quarter of 2007, the market for CDOs went completely to hell, an early casualty of the mortgage crisis. AIG, to that point, had already accumulated about $643 million in bad assets on its books. (Note AIG's use of the euphemism "other-than-temporary" to describe the writing off of these assets; that's a bit like calling Louie Anderson "other-than-skinny"). AIG must have anticipated that it was going to spend most of 2008, and perhaps most of 2009, merely climbing out of its hole rather than turning any sort of profit.
This must have posed something of a problem for the employees in the Financial Products division, since their compensation relied on these trades being profitable. So AIG struck a deal with these employees. It guaranteed them, for 2008 and 2009, the same level of incentive-based compensation that they received in 2007 (except for senior executives, who took a 25 percent haircut), regardless of how the division actually performed. The only requirements were that the employees couldn't quit and couldn't be fired for cause (a much stricter standard than the usual conditions of at-will employment.)
This turned out to be an other-than-good deal for AIG. But at the time, AIG must have believed that its hand was forced. At that point in early 2008, the market for the sorts of assets that AIGFP dealt in had crashed, but the broader asset markets hadn't yet. Many of these employees were highly skilled, and could plausibly find employment at another company that traded in other, relatively healthier types of commodities. But AIG evidently felt it needed them in order to minimize its losses and unwind its positions.
The thing about these "bonuses", however is that they're not really bonuses, which we usually think of as incentive-based compensation. On the contrary, they are something the opposite of bonuses: they took compensation that had been incentive-based and guaranteed it. It's precisely because that compensation was guaranteed -- not incentive-based -- that it is difficult to undo.
The fundamental issue here what I call asymmetrical agency bias. We as human beings tend to attribute our results to skill when we are performing well, but (bad) luck when we are performing poorly. Thus, AIG was willing to pay its Financial Products employees plenty when their trades were going well (assigning them agency for their profits), but was willing to make plenty of excuses for them ("the severe liquidity crisis", "the effects of rating agency downgrades") once things began to unravel. The employees, likewise, may have felt entitled to some large fraction of the incomes that they had "earned" before, and probably didn't regard themselves as culpable for the losses their trades had begun to take.
As someone who is alert to asymmetrical agency bias -- it is an extremely common phenomenon in both poker and baseball, two fields with which I am intimately acquainted -- I tend to be unusually sympathetic to the position that the individual traders at AIG were not especially responsible for the fact that their deals had begun to lose money. Even the most skilled and honest trader probably could not have done better than to limit his losses once the CDO market began to collapse in 2007. By the same token, however, I tend to be unusually unsympathetic in my assessment of how much alpha these traders were responsible for on the upside; any idiot could have made money trading credit default swaps in 2005 or 2006.
- TheBlueOne0
"I tend to be unusually sympathetic to the position that the individual traders at AIG were not especially responsible for the fact that their deals had begun to lose money."
I will side with Mr. Black Swan, Nassim Taleb, and insist that the corrollary is equally true:
"I WOULD ALSO tend to be unusually sympathetic to the position that the individual traders at AIG were not especially responsible for the fact that their deals had MADE money."
- formed0
It is hopefully almost over, 90% of those bonuses will now be taxed.
- Un-American and pathetic!!! Voted for by DEMS also. CROOKS ALL.********
- So letting this incomptent boobs walk away with government money is OK?TheBlueOne
- A contact IS a contact. Tim G, Dodd— ALL knew about this.********
- Un-American and pathetic!!! Voted for by DEMS also. CROOKS ALL.
- TheBlueOne0
Yes, the bonuses will be taxed.
It is far from over. Very, very far. We can't see over from here.
- ********0
holy fuck there are some stupid people in this thread.
- <********
- yeah, that was kind of my point getRefresh... probably too subtle though eh?********
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- GeorgesII0
"When the finger points to the moon, the fool looks at the finger"
I can't believe some of you still don't see the entire conspirationhow many billions were disappeared in Irak,
how many trillions were sent to anonymous asset holder??
and you're debating $ 165 fuckn millions,this is why nothing will ever change, because you lose your time thinking you can actually do something,
but inside you know you won't be able to move squat, not even hope for a butterfly effect.* I type this after failing to code another css for ie6, I'M PISSED OFF
- TheBIueOne0
"A contact IS a contact."
Bullshit. Bullshit. Bullshit.
Wake up and stop sniffing the glue.
- lvl_130
100
meh