The last time I used a calculator, $135 million (the amount of the AIG retention bonuses) was .073% (not 7%, not .7% but .073%) of the total $183 billion that has been given to AIG beginning in September of 2008. So what the hell is everybody indignantly yelling about the bonuses for? Why are you guys screaming about the shame of the bonuses? Start screaming about the stuff that matters.
If AIG's Liddy in his testimony was telling the truth, the biggest news he revealed was that the AIG Financial Services operation in London was in a run off situation, and that the retention bonus were to retain the folks handling the run-off. The deal makers he said, were gone. That is to say, he intended (15 years too late if you ask me) to close the business. If so, that's a good thing.
People, where in the hell is your indignation about the remaining $182,865,000,000 that AIG has sucked up so far to pay its "promises" on its credit default swaps, or, as the big shots like to say, to pay to its "counter parties"? You ever heard about the free lunch? Well, you're seeing it in action here. Privatized profits and socialized losses that were supposed to be insured.
The first infusion to AIG back in the third quarter of the year was for $85 billion, and in the last quarter of the year, they declared the largest quarterly business loss in history of $61.7 billion. It looks to me like they made a cool net of $23.3 billion. And what do you think caused the quarterly loss? Since the rest of the AIG operations--those that might legitimately be called "insurance"--were making money, where else did the loss go except to pay off the rich banks and their shareholders and the hedge funds? So now the bailout is up to $183 billion and the smart money says they will ask for more. Check out the counter parties they have paid money to, and you'll find the biggest recipient is Goldman Sachs. Ring a bell? Then there's UBS. Ring a bell with any of you Phil Gramm afficianados?
Look, when you buy insurance on something you have to have an insurable interest. Not only that, when an insurer writes insurance, it must have a modicum of reserves to anticipate losses. AIG has always been notorious in its legitimate insurance operations for always over estimating losses so that it could justify higher premiums and make more money on its investments. Did they have reserves for their credit default swaps? Nope. Why aren't we trying to find out how many of the credit default swaps that AIG sold were actually based on an actual ownership of the underlying security?I suspect that among other things, that is what Andrew Cuomo, the Attorney General of New York, is trying to determine.
You know the insurance bastards are exerting influence when the Obama administration, whose big pledge was to the veterans, proposes using insurance for their medical care. General Shinseki should resign, not push it.
I say, if a default swap was written based on ownership of a genuinely primary asset--an actual bundle of mortgages, let it stand. As for the rest, based on derivatives of an asset, or a derivative of a pool of derivatives, let it fail.
Because if you take your eye off the little gnat of the bonuses buzzing around your eyes, you'll have to pay attention to the mountain top demolition going on just a little bit further down the valley. You know who is getting all the money on this rape of the financial landscape, this boondoggle? The people who had pot full of money to start with. The people who have been taking the money all along as productivity increased and your raises didn't, and as they fiddled with inflation to decrease the cost of living allowances to your retired mom and pop, and now you as you look to retire, as they toyed around with "managed care" so they could increase your deductibles and co-pays.
Don't believe a word when they use the word "affordable" in regard to health care. That just means that the insurance companies will still be in the game. Lest you still believe in insurance companies having your best interest at heart, see "AIG" above.
Move your money to a local credit union, and if you really need a credit card, get it from them. Credit unions are able to lend money. The more you deposit the more they will be able to lend--safely. The financial grubbers and greedy guts guys who are handling this financial crisis and to whom it is now all too apparent, President Obama has his allegiance, aren't lending money.
That's because everybody in the United States (except the moneyed elite, the pundit class, the politicians, the mega corporate bosses, the rentiers) have gotten hit upside the head by the practical notions that they should have been following two decades ago. Now they understand they have enough stuff already and they want to save, repair, patch up, make do, grow their own, read a good book, go for a walk around the block rather than in Provence. What the hell do they need a new car for? They certainly don't want to put themselves in more debt when they are close to underwater in their house. Most of all, they are scared shirtless that they won't have a job by the end of the year. So save at a credit union or a local bank. Boycott Citibank and the other big ten. Drive them under. Let them tank.
Saving the banks won't rescue the economy. Producing good useful stuff will save it.
Outlawing credit default swaps on derivatives. That might save it.
Redeeming the IOUs in the social security system with legitimate bonds will save it.
Investing in energy conservation will save it.
Paying teachers better will save it. Cutting class sizes will save it.
Cutting the defense budget by a third (to start) will save it.
Providing a living wage will save it.
Unionizing will save it.
Getting the hell out of Iraq and Afghanistan and Pakistan and Germany and Italy and Okinawa (for a start) will do it.
Getting rid of government insurance for new nuclear power installations will do it.
Sending the IRS after the real money and the corporate scams, not the chicken diddle, will do it. Increasing taxes to where they were when Reagan entered office will do it--though that's just a start.
Keeping the inheritance tax will do it. Or maybe making it a real "death tax": 95% for everything over $1 billion will drive more money into charities and foundations. (And it won't drive Forbes out of business. I still have six months to go on my gift subscription.)
Providing jobs for people to spend on necessities, home improvements, paying down their primary debt (house, car) will do it.
Cutting out the greedy middle men and corporate bureaucracies (worse than any government bureaucracies) in this sorry-ass scam we call health care will do it.
Putting some good usury laws back onto the books, so that when people do want to borrow they can do so without getting fleeced will do it
But above all letting the big banks go the way of everyone and every company whose liabilities exceed their assets, especially when it's due to capitalist stupidity and excess, will do it. Let them sink and crunch and break up and get transformed ("creative destruction," for all you Libertarians out there) like every other business or household that has gone bankrupt. That will really do it.
I say let them go down, let the banks go into receivership, break up the monopolies, break up the "too big to fails." Those bastards who own the banks and the hedge funds will always have enough money to survive.
Yes sir, I'm preaching class war, here, except--if we're damn lucky--it's only round five of a ten round match, and the fat cats won the first five. Let 'em have it. Either pummel the hell out of them or knock them down for the night. Even a drawling and corrupt referee might have to stop counting after 30 seconds if he knows what's good for him. Because we may be unlucky and it might really be round nine. Because we really can't tell can we? Or maybe we can't remember. If it's one thing we do know for sure, the fix has been in for a long time, Lefty, so stride on out there when the bell rings and knock that monster on its ass.