AIG VP's resignation letter

[Devaclis]

http://www.nytimes.com/2009/03/25/opinion/25desantis.html

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.
I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.

That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”

That may also be why you authorized the balance of the payments on March 13.
At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.
You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.
This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”

Sincerely,

Jake DeSantis

[McVaaahhh]

There's always 2 sides to every story isn't there?

[MetaLord 9]

There's always 2 sides to every story isn't there?
at least two.

[Rhino]

I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget.


This is the real American dream that's been destroyed.

[InlineSIX24]

Typical government. Bail out with one hand, stab in the back with the other.

[Devaclis]

Yay for you that voted for government control. You can't make your own decisions so you vote in a government that will make your decisions for you, and everyone else. You are awesome.

Who here would give back their paycheck? Bonuses? Who? Not one of you. Why is this guy different? Because he is rich. He makes a lot of money. He works for a company that has a DEPARTMENT that was involved in some shady stuff. So now HE gets to forfeit his earnings. So do his co-workers. Do any of YOU or congress even know what his/their involvement was in the ecconimic decline? Bah, bunch of damned torch carrying ignorant sheep.

Go Obama, Go congress, Go Liddy, Go to Hell.

[~Barn~]

Yay for you that voted for government control. You can't make your own decisions so you vote in a government that will make your decisions for you, and everyone else. You are awesome.

Who here would give back their paycheck? Bonuses? Who? Not one of you. Why is this guy different? Because he is rich. He makes a lot of money. He works for a company that has a DEPARTMENT that was involved in some shady stuff. So now HE gets to forfeit his earnings. So do his co-workers. Do any of YOU or congress even know what his/their involvement was in the ecconimic decline? Bah, bunch of damned torch carrying ignorant sheep.

Go Obama, Go congress, Go Liddy, Go to Hell.

:lol:

I give back all the time. Maybe not to the scale that this person has, but I (along with others) have donated "a days wage" to help defray what the economic downturn has caused for us here at Ceridian. I give privately (and publicly), to the efforts of people and organizations, that help people who are going through a hard time, or are underrepresented, or maybe just simply need help. If you want to ask me to spell-it-out, feel free. It's my horn and I don't mind playing it. But don't speak so broadly about things, that you don't have a good grasp of. That's just simply not fair.

The pains we are going through are a long time coming, and the healing that will eventually come, are a long way off. The true core of the matter, is a shift in how Americans think, and I think we're headed in that direction. To even mention "Obama" when he is a whole 2 months into his administration, is a sign that your view is skewed. Just like your view of who gives back and who does not. And I realize that it feels good to bitch, but you have to be reasonable. :dunno:

And oh yeah.... At least I got out and voted.

[salsashark]

and all of this from a government who votes for their own pay increases...:banghead:

[Devaclis]

Funny thing I notice every day browsing a crapload of message forums:

People question:

What tires to buy

What kind of wax to use on their car

What kind of flea repellent is safest for their cats

Anyone have safety gear I can borrow?

How can I protect my home from fire.

TONS of great legitimate questions. Useful in everyday life.

When is the last time you questioned why you pay as much as you do for taxes?

When is the last time you questioned congress and YOUR governments ability to make an impromptu law that will increase the tax rate on bonuses for people, select people ONLY, who make money that they think is outlandish?

When is the last time you questioned our governments ability to take the money that YOU have given them, and give it to the companies who may have led to your unemployment, homelessness, poverty, financial ruin? All this without proper investigation, due dilligence, and the correct check and balances in place?

You ask questions all of the time. I don't think you are asking the right questions to the right people. You would hold a motorcycle dealer accountable for ANY scratch that they put on your bike while they serviced it. How come you don't hold your government accountable?

For months I have been emailing and calling and even wrote a few letters by hand to fight a couple of bills that I believe are threatening my ability to choose what is right for me and my familie. Outside picking apart my or any other persons posts here or anywhere else, what have you done?

[Devaclis]

:lol:



And oh yeah.... At least I got out and voted.

If you are trying to make this a burn on me, again, back off. You think that because I did not choose one old fat guy or the other that my rights as an American are taken away, that I don't count? Prove it. Don't just make snide jabs at me that you cannot substantiate.

[~Barn~]

<snip...>what have you done?

I personally have to *thank* this board, for bringing various "public policy" items to my attention that I might not otherwise hear about. On several ocassions over the years of this boards existance, I have been prompted to write an email to a congress-person, or to sign a petition for (or against) an particular effort.

I have been show where to get information during an election year.

I have been given contact information to Lobby groups who are involved in motorcyclist rights, or public land use, or a number of assorted other items.

Efforts to support troops with something as simple as a "care package" mailing.

I know that this is a motorcycle club, but in my personal view, we have some very politically and socially astute members. Posting (not unlike talking) is cheap, but I think beyond all of that, we have a lot of "doers" on here too. And at the very least, a lot of people who encourage others to "do". How you can venture to think you're in a position to call out anybody for a level of "what have you done", is astounding to me.

EDIT:

If you are trying to make this a burn on me, again, back off. You think that because I did not choose one old fat guy or the other that my rights as an American are taken away, that I don't count? Prove it. Don't just make snide jabs at me that you cannot substantiate.

I mearly stated a fact Dana, since you were (seemingly) poking fun at those who voted [a certain way]. I can't substantiate a jab, it's not within my power. Depending on what the readers here think, the jabs can only serve to substantiate themself, or fall flat.

And remember this, before you get to engrossed in your "One guy vs. the other guy" philosophy..... Voting for The President is an open forum. There are numerous selections that are made available to you, for your ballot. And if you don't like those selections either, there's a place for you to write somebody's name down. ;)

[Shea]

Barn, really? You cannot differentiate between giving of your own free will and being forced by people to give up the fruits of your labor?

So when is it Obama's mess? Or will you just continue blaming Bush for everything because you lack the intellectual integrity to do otherwise? Obama wrote the stimulus bill and forced it through on fear. In it was a SPECIFIC admendment that allowed for these bonuses, then claimed he had no idea. Geithner claimed he had no idea as well and got caught in a lie as did Chris Dodd.

And you want to sit there and say Obama had nothing to do with this? Really?

[puckstr]

Yay for you that voted for government control. You can't make your own decisions so you vote in a government that will make your decisions for you, and everyone else. You are awesome.

Who here would give back their paycheck? Bonuses? Who? Not one of you. Why is this guy different? Because he is rich. He makes a lot of money. He works for a company that has a DEPARTMENT that was involved in some shady stuff. So now HE gets to forfeit his earnings. So do his co-workers. Do any of YOU or congress even know what his/their involvement was in the ecconimic decline? Bah, bunch of damned torch carrying ignorant sheep.

Go Obama, Go congress, Go Liddy, Go to Hell.

http://rlv.zcache.com/obey_obama_resistance_is_futile_bumper_sticker-p128128357844666174trl0_400.jpg

[~Barn~]

Barn, really? You cannot differentiate between giving of your own free will and being forced by people to give up the fruits of your labor?

So when is it Obama's mess? Or will you just continue blaming Bush for everything because you lack the intellectual integrity to do otherwise? Obama wrote the stimulus bill and forced it through on fear. In it was a SPECIFIC admendment that allowed for these bonuses, then claimed he had no idea. Geithner claimed he had no idea as well and got caught in a lie as did Chris Dodd.

And you want to sit there and say Obama had nothing to do with this? Really?


Tell you what Shea.... If I can get even *1* person to read this posting of yours, and re-articulate whatever it is you're trying to ask me, in terms of what we're talking about here, I will try and answer it.

You've just introduced "blame" into the equation, and it's a tangent that (although I know you are very adamant about bringing to the forefront), the conversation was doing just fine without.

You question my intellectual integrity, but you can't even follow the discussion that we're having!

[~Barn~]

And just to be clear, I meant one other person, besides you again.

[puckstr]

It is sad we don't have presidents (past and current) that accept responsibility for the job at hand.

Truman said it BEST
http://www.cynical-c.com/archives/bloggraphics/bp6.jpg

[dirkterrell]

:lol:
To even mention "Obama" when he is a whole 2 months into his administration, is a sign that your view is skewed.



So when is it Obama's mess? Or will you just continue blaming Bush for everything because you lack the intellectual integrity to do otherwise? Obama wrote the stimulus bill and forced it through on fear. In it was a SPECIFIC admendment that allowed for these bonuses, then claimed he had no idea. Geithner claimed he had no idea as well and got caught in a lie as did Chris Dodd.

And you want to sit there and say Obama had nothing to do with this? Really?



Tell you what Shea.... If I can get even *1* person to read this posting of yours, and re-articulate whatever it is you're trying to ask me, in terms of what we're talking about here, I will try and answer it.


I gathered he was addressing your statement that Obama wasn't relevant to the discussion. I'd say he is. What do you think?

Dirk

[Shea]

Tell you what Shea.... If I can get even *1* other person to read this posting of yours, and re-articulate whatever it is you're trying to ask me, in terms of what we're talking about here, I will try and answer it.

You've just introduced "blame" into the equation, and it's a tangent that (although I know you are very adamant about bringing to the forefront), I have to say the conversation was doing just fine without.

Well if you need me to use smaller words Barn, I'll try.

In your initial response to Dana you stated this:


I give back all the time. Maybe not to the scale that this person has, but I (along with others) have donated "a days wage" to help defray what the economic downturn has caused for us here at Ceridian. I give privately (and publicly), to the efforts of people and organizations, that help people who are going through a hard time, or are underrepresented, or maybe just simply need help. If you want to ask me to spell-it-out, feel free. It's my horn and I don't mind playing it. But don't speak so broadly about things, that you don't have a good grasp of. That's just simply not fair.

I read into that that you felt you equate your giving to Mr. DeSantis (though not in scale) and that giving is natural, normal and ok. I, of course have no problem with giving but that is not the issue at stake. Mr. DeSantis is being FORCED through intimidation, fear and the threat of the government to "give". My question to you is do you not recognize the difference in your VOLUNTARY giving and the AIG events?

Next you stated this:


To even mention "Obama" when he is a whole 2 months into his administration, is a sign that your view is skewed.

You attempt to absolve Obama of any responisblity by saying he is new. I took contention with that and pointed out that he is DEEPLY involved with the demonization of an American company and SPECIFIC citizens.

So tell you what Brandon, deflect and dodge as much as you want. Defame Dana, ridicule me. But unless you want to have a grown up conversation, don't come on here and pretend you're better then everyone else.

[MetaLord 9]

Shea is being condescending
Barn is being defensive
Dana is being...well, Dana. (that is to say staunchly married to his point)

Now that we've gotten that out of the way, anyone wanna respond to Dirk's post?


I gathered he was addressing your statement that Obama wasn't relevant to the discussion. I'd say he is. What do you think?

[~Barn~]

He's definitely relevant, Dirk. He's the man who gets to re-grip the reins of this country and delegate the people and powers at his disposal, to try and (essentially) turn this entire country around. Turn it around economically, turn it around in terms of our view from the global-community, turn it around to basically the point where we are prosperous once again, and not sliding backwards.

He's absolutely relevant, but the context of his relevance is critical. I think that often gets missed.

[dirkterrell]

It is sad we don't have presidents (past and current) that accept responsibility for the job at hand.


Or politicians in general. But ultimately it comes down to the voters and we citizens have been relatively fat and happy until recently so we kept voting them back in. Now the shit is really hitting the fan. We'll just have to see how it plays out.

I hope people will begin to see that as government is more distant (local->state->federal) it becomes more and more of a blunt and inefficient instrument. And there are people who crave the power that bigger government affords. Be careful what you cede to government. It probably won't work out the way it is sold to you and getting back what you have given up will probably be very difficult.

Dirk

[~Barn~]

Well if you need me to use smaller words Barn, I'll try.


And just to be clear, I meant one other person, besides you again.

Yeah... I need you to slow down, for me. :lol:

[~Barn~]

Your powers of avoidance and deflection, amaze me.

Lots of things about me, should amaze you.

[Shea]

Lots of things about me, should amaze you.

Doubt it. Care to answer the questions now?

[MetaLord 9]

I think it prudent to remind everyone that capitalism is not an "everybody wins" system. In fact, it's very much a "get tough, get smart, or get out" system that promotes a healthy hunger to best the competition, to be more intelligent than the other guy, and to learn and adapt where others have fallen short. It's a survival of the fittest mentality that works well on the whole but canabalizes on the micro level. Companies failing frees up market space for other companies succeeding. Limited government intervention is necessary as guide to help things grow in a healthy and helpful direction and to monitor restraint of trade. Government intervention as we've most recently witnessed it equates to a parent rewarding a petulant child or at least coddling the brat so as to prevent them from learning that "the stove is hot. hot hurts. I shouldn't put my hand on the stove."

[~Barn~]

Doubt it. Care to answer the questions now?

:lol:
No Shea, I'm too busy bringing your own words back from the dead. I'll pass on Q&A for now, EDIT: because I'm actually starting to amaze myself!

[~Barn~]

I offer you a truce though. I'm not angry about any of this, and I don't want you to be, either.

Let's go get high and play Connect-4 for money, or something. :siesta:

[dirkterrell]

You and I have never met or spoken to each other,

I find this rather alarming. This guy is an executive VP and he's never had a conversation with the CEO? Wow. I realize Liddy has only been there for a few months but I would think that meeting with the VPs would be a top priority if you're trying to turn a company around.

Dirk

[Shea]

:lol:
No Shea, I'm too busy bringing your own words back from the dead. I'll pass on Q&A for now, because this whole "amazing you" thing, is kinda cool!

:roll:

[MetaLord 9]

I find this rather alarming. This guy is an executive VP and he's never had a conversation with the CEO? Wow. I realize Liddy has only been there for a few months but I would think that meeting with the VPs would be a top priority if you're trying to turn a company around.

Dirk
I noticed that too and it gave me pause. Perhaps it's easier to make broad and sweeping personell and monetary decisions when there are fewer faces with which to associate the consequences.

[MetaLord 9]

:roll:
BTW, this is why Shea's all ripped. He comes on here and gets so amped up talking to everyone that he goes out and lifts schoolbuses to blow off steam. :lol:

[Shea]

I find this rather alarming. This guy is an executive VP and he's never had a conversation with the CEO? Wow. I realize Liddy has only been there for a few months but I would think that meeting with the VPs would be a top priority if you're trying to turn a company around.

Dirk

You'd think so, but Liddy is a government appointed CEO so who knows...

[~Barn~]

Liddy's probably had Congress (amongst others) breathing down his neck, since he got into his position. It's odd, but not ultra surprising that he hadn't met DeSantis.

[Shea]

BTW, this is why Shea's all ripped. He comes on here and gets so amped up talking to everyone that he goes out and lifts schoolbuses to blow off steam. :lol:

I just get pissed when people say something, get called on it, claim they didn't say it, then run away. You believe in something, man up and defend it. Don't run away like a little girl when you get push back. It's intellectual sloth and very unbecoming.

And really Chris it's only minivans. I only do reps with school buses when I listen to politicians tell me how to run my (or anyone else's) life. :)

[Devaclis]

EDIT:


I mearly stated a fact Dana, since you were (seemingly) poking fun at those who voted [a certain way]. I can't substantiate a jab, it's not within my power. Depending on what the readers here think, the jabs can only serve to substantiate themself, or fall flat.

And remember this, before you get to engrossed in your "One guy vs. the other guy" philosophy..... Voting for The President is an open forum. There are numerous selections that are made available to you, for your ballot. And if you don't like those selections either, there's a place for you to write somebody's name down. ;)

And if I did not think that anyone was fit. I should still have to choose someone to have the rights that all Americans have? What of those underage to vote. Those who are mentally incapable of voting, Those who are unable, whatever the circumstances, the cast a ballot?? They should have no say, no rights, and no freedoms?

I am unsure where in the laws of this country, the constitution, the charters, the bills, the legislature, what have you, that is states that people who choose not to vote are to be revoked of their privileges as a United states Citizen.


And please, we are friends here, for the most part. Lets not turn this shit personal. I prefer specific questions and references to a general audience. Kinda like I am a politician or something. The only difference is I have passion, not money or power, motivating my comments and reactions.

Go to it.

[Nick_Ninja]

Don't nobody melt down here now.

[Horsman]

Wow - That was a long letter... All right Jones, let's do this..... Lerrrrrrroyyyyyy Jenkins!!!!

[Wintermute]

[snip]
When is the last time you questioned why you pay as much as you do for taxes?
[snip]


I ask it. Then realize that putting fuel in the Army's tanks takes money. Paving the roads on which we all love to ride takes money. And yes, Bobby Jindal, dumb fuck, monitoring volcanos (http://www.google.com/hostednews/ap/article/ALeqM5hcWJaxwgurm_TV9AVcObQBWbS25QD9755IH01) takes money.

So I look at taxes as my dues to belong to the best "Country" Club in the world.(And no, I don't belong to any country club.) The problem is, people like the white collar criminal cocksuckers (George Carlin's term) whose bad bets we're now being forced to cover, you know, greedy people, well they'd be perfectly fine with letting other people pay for the government services they enjoy. So their dues for the United States Country Club have to be pried from their stubby, sweaty hands.

[Wintermute]

It is sad we don't have presidents (past and current) that accept responsibility for the job at hand.

Truman said it BEST
http://www.cynical-c.com/archives/bloggraphics/bp6.jpg

Google: +obama +"the buck stops with me" (http://www.google.com/search?hl=en&safe=off&rlz=1C1CHMI_enUS311US313&q=%2Bobama+%2B"the+buck+stops+with+me"&btnG=Search)

Only 249,000 hits.

[Wintermute]

[snip]
Who here would give back their paycheck? Bonuses? Who? Not one of you. Why is this guy different? Because he is rich. He makes a lot of money. He works for a company that has a DEPARTMENT that was involved in some shady stuff. So now HE gets to forfeit his earnings. So do his co-workers. Do any of YOU or congress even know what his/their involvement was in the ecconimic decline? Bah, bunch of damned torch carrying ignorant sheep.

Go Obama, Go congress, Go Liddy, Go to Hell.


http://www.nytimes.com/2009/03/25/opinion/25desantis.html

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products.

[snip a bunch of poor, poor, rich guy whining]



AIGFP, his division, is the source of the Credit Default Swaps (CDS) that sank the company. There wasn't anything shady going on, because it was all legal! There weren't/still aren't rules. All thanks to morons like Mitch McConnell and scores of other bought-and-paid-for congress critters in both parties.

The Finance Industry spent around 5 billion buying Congress, finally getting Glass-Steagal repealed in Dec 2000, clearing the way for all these finance idiots to basically stop holding collateral for the huge bets they've made. What were we all obsessing about at the time? Fucking hanging chads. The beginning of the long chain of events that has evaporated trillions of our wealth was barely a footnote in the paper.

Anyway, I'm not gonna cry about some pampered white collar guy walking away from a job that's paid him millions over the years. Fuck him, there are people without millions in the bank really suffering from the disastrous effects of his and his co-worker's bad gambling bets. Were you just as outraged when the auto workers took cuts for their bailout? Breaking their contracts?

[Shea]

It's astonishing that so many, seemingly intelligent people, can readily fall into the class warfare/envy trap. Yet another tool of control those who wish to rule you use to keep you distracted from their machinations.

Mr. DeSantis being forced through fear and intimidation to give up bonuses =/= UAW voluntarily revising their contracts to keep their jobs.

People are more pissed off that this guy got paid a contractually obligated retention bonus then the US Congress voting to tax an INDIVIDUAL CITIZEN at 90%! The level at which that single act breaches everything this country has every stood for should make people rise up. Instead we get a sycophantic media following ACORN/United Services Workers Union manufactured "protests" and so-called outrage over well-known bonuses.

At what point did we cease to think in this country?

[Rhino]

At what point did we cease to think in this country?


November 4th, 2008 :banghead:

I'm sure there are other notable dates, but that one stands out.

[Shea]

November 4th, 2008 :banghead:

I'm sure there are other notable dates, but that one stands out.

Well 8 years of George "cut taxes and spend a shit-load of money" Bush wasn't exactly a high point in our nations history either. The guy ruined any standing the Republican party had as the party of "fiscal responsibility".

How people got duped by the whole "change" BS that Obama claimed is incredible. All he is doing is continue the same failed policies and slapping a fresh coat of paint on them. The only difference is he's got a -D on his name and is therefore infallible in the eyes of certain members of the media.

[dirkterrell]

AIGFP, his division, is the source of the Credit Default Swaps (CDS) that sank the company.

Did you read the guy's letter?


I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.


I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

Sounds to me like the guy was doing his job, decided to stay on at no pay to help salvage what he clearly believed was a good company for the sake of the vast majority of workers who were also doing their jobs. Instead, he and the others are being hung out to dry by two-faced politicians with their smoke and mirrors act. If anyone has evidence to the contrary, I'd like to see it.

Dirk

[Captain Obvious]

Did you read the guy's letter?


No proof needed. Lets just get pissed because the current AIG buzzword was used.

AIG seems to be the current red flag that is being waived to anger the public and then used as a tool to push legislation by the administration. Similar tactics that the Bush admin used. Same method, different messenger seems to be okay though.

[Captain Obvious]

people like the white collar criminal cocksuckers (George Carlin's term) whose bad bets we're now being forced to cover, you know, greedy people, well they'd be perfectly fine with letting other people pay for the government services they enjoy.


Oh, I would love to hear him rant about this. Didn't always agree with him, but he was so effing funny.

[Rhino]

Well 8 years of George "cut taxes and spend a shit-load of money" Bush wasn't exactly a high point in our nations history either. The guy ruined any standing the Republican party had as the party of "fiscal responsibility".

How people got duped by the whole "change" BS that Obama claimed is incredible. All he is doing is continue the same failed policies and slapping a fresh coat of paint on them. The only difference is he's got a -D on his name and is therefore infallible in the eyes of certain members of the media.

The Republican name is shit anymore. It's funny to see the responses people have sent when the RNC is sending out it's pledge requests. "You won't see another dime from me until you go back to the core principals of being fiscally conservative" etc.

This should be terrifying to anyone who understands inflation: http://finance.yahoo.com/news/Fed-to-buy-up-to-300B-apf-14679757.html Thats right, the .gov is printing trillions of dollars to buy their own debt. Can you say hyper-inflation boys and girls?

I picked Nov 4th, not only for the Kenyan, but other factors as well. Nancy Pelosi wasn't voted out. She treats the floor like her own personal popularity contest and she's the bitchy head cheerleader.
The worse event from that day is that the Democrats got an almost filibuster proof congress. It only took 3 traitors from the R's to pass the biggest theft of taxpayer money in the history of the world. The D's can basically railroad anything they want through the house, senate, and the prez's desk.

As far as the people who fell for Obummer's BS, I'd really like to talk to the chick who thought O was gonna pay for her mortgage and gas. http://www.youtube.com/watch?v=P36x8rTb3jI While a few more trillion dollars went to banks and millions in bonuses, not only to AIG, but also Fannie and Freddie execs, I wonder if he picked up her mortgage last month? Bastard coulda at least bought her a tank of gas.

As far as the class warfare: The .gov and the people are demonizing "the rich". Let me know how that works out for ya. As Dean posted in his "oh crap, my recession proof career isn't because the rich took the ball and went home" thread, the rich will simply hole up and wait for this nonsense to pass. If it doesn't, they will likely leave in droves to more tax friendly countries.

The battle cry for the revolutionary war was "No taxation without representation". What we have seen is the opposite, but just as detrimental: Representation without taxation. People who don't pay taxes are still able to vote. And Nov 4th proved that they will vote for the person who promises to GIVE them the most, regardless of where it comes from.

"A democracy is always temporary in nature; it simply cannot exist as a
permanent form of government. A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship." Hmm.. I wonder why they're talking about repealing the 22nd amendment? http://thomas.loc.gov/cgi-bin/query/z?c111:H.J.Res.5:

And as far as .gov spending goes, I guess it's all better now:wtf:: (Note, this doesn't include the $3.5 trillion plus budget they're talking about today)

[Shea]

Well there's your problem...most people DON'T understand inflation, let alone economics. All they hear is "hope and change". Let's not look at what is actually happening just what our leaders are saying.

Obama says that he will cut the "inherited" budget deficit by half. Well I can read a chart and quadrupling it is not cutting it by half. But as long as he sounds good behind a teleprompter he's golden.

Obama/Bernanke is taking the Bush/Greenspan doctrine and turbo+supercharging it and injecting it will every steroid known to man. MASSIVE deficits. Doubling our debt AGAIN. Monetizing that debt because the world is saying "enough".

You KNOW it is bad when the socialists in Europe are telling us that we are stupid and our course of action is doomed to fail.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5048291/EU-presidency-US-and-UK-economic-recovery-plans-are-a-way-to-hell.html

[Wintermute]

It's astonishing that so many, seemingly intelligent people, can readily fall into the class warfare/envy trap. Yet another tool of control those who wish to rule you use to keep you distracted from their machinations.

Mr. DeSantis being forced through fear and intimidation to give up bonuses =/= UAW voluntarily revising their contracts to keep their jobs.

People are more pissed off that this guy got paid a contractually obligated retention bonus then the US Congress voting to tax an INDIVIDUAL CITIZEN at 90%! The level at which that single act breaches everything this country has every stood for should make people rise up. Instead we get a sycophantic media following ACORN/United Services Workers Union manufactured "protests" and so-called outrage over well-known bonuses.

At what point did we cease to think in this country?

Well, unlike DeSantis, the UAW workers don't have millions of dollars in their bank accounts from the giant ponzi scheme AIG and the other idiots perpetrated. When losing your job puts you on the street, you're more inclined to bargain. When you've got millions, you write self-pitying op-eds and write $750,000 checks to charity.

And frankly, he was in the unit that tanked his company, and there's millions of people with no relation at all to any part of AIG suffering far harder than DeSantis, so boo-hoo to his "It wasn't me" argument.

And no, I don't envy him. I don't envy greedy assholes, no matter how much money they have.

[Wintermute]

Did you read the guy's letter?

Sounds to me like the guy was doing his job, decided to stay on at no pay to help salvage what he clearly believed was a good company for the sake of the vast majority of workers who were also doing their jobs. Instead, he and the others are being hung out to dry by two-faced politicians with their smoke and mirrors act. If anyone has evidence to the contrary, I'd like to see it.

Dirk

It's the "Lemon Socialism (http://en.wikipedia.org/wiki/Lemon_socialism)" we're having to swallow that's fueling this. They, DeSantis included, pocketed millions in the last decade making stupid gambling bets that we're now covering. Their profit was private, their loss is public.

Also, it's the self-pitying whining and wounded sense of entitlement. These guys need to shut the fuck up and go count their millions.

[Desmodromico]

Execs in my company voluntarily gave up all bonuses this year and also took pay cuts as well as reductions in benefits to avoid laying any people off.

People can tout capitalism all they want but it still requires social responsibility and anyone who doesn't understand that a company's success is based on the whole and not the top tier is incredibly ignorant. This is the blueprint many of the currently failing companies followed and I have no compassion for them.

My personal belief is that this recession will make many companies re-think fat exec pay plans and wage inequality...anyone who has a problem with the "socialist Obama government" can thank the overpaid elites for mobilizing a grassroots political machine against their excesses, now we all will see where it takes us.

[Wintermute]

Well there's your problem...most people DON'T understand inflation, let alone economics. All they hear is "hope and change". Let's not look at what is actually happening just what our leaders are saying.

Obama says that he will cut the "inherited" budget deficit by half. Well I can read a chart and quadrupling it is not cutting it by half. But as long as he sounds good behind a teleprompter he's golden.

Obama/Bernanke is taking the Bush/Greenspan doctrine and turbo+supercharging it and injecting it will every steroid known to man. MASSIVE deficits. Doubling our debt AGAIN. Monetizing that debt because the world is saying "enough".

You KNOW it is bad when the socialists in Europe are telling us that we are stupid and our course of action is doomed to fail.

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5048291/EU-presidency-US-and-UK-economic-recovery-plans-are-a-way-to-hell.html

I guess you're referring to the comments made by Mirek Topolánek, the caretaker PM of the Czech Republic in the link. He's center-right, not socialist. Prolly a little to the left of Olympia Snow. Not every country in the EU is a socialist paradise, there's a broad range of parties in every country.

What I see in that article is Europe dragging their feet and trying to parasite their way through this mess by letting us pay for the bailout. Germany in particular.

[Shea]

I guess you're referring to the comments made by Mirek Topolánek, the caretaker PM of the Czech Republic in the link. He's center-right, not socialist. Prolly a little to the left of Olympia Snow. Not every country in the EU is a socialist paradise, there's a broad range of parties in every country.

Well we could go rounds about what exactly you mean by "socialist paradise". I would contend that there is no such thing. Either way, all European countries are farther down the road to "socialistic implosion" then we are.



What I see in that article is Europe dragging their feet and trying to parasite their way through this mess by letting us pay for the bailout. Germany in particular.

I believe that most of the leaders in the world are too shocked to do anything other then throw money at the perceived problem. That's all they really know how to do and it's all that the electorate expects. Effective, efficient and economically (long term) viable solutions are not on the table due to the entrenched belief systems of these leaders and their supporting bureaucracies.

Real solutions and tough choices will only be weighed when they have spent all they can spend and it has done nothing. Unfortunately given the world view of those in power, our individual liberties will suffer because all they know is control.

[Wintermute]

Well we could go rounds about what exactly you mean by "socialist paradise". I would contend that there is no such thing. Either way, all European countries are farther down the road to "socialistic implosion" then we are.

I believe that most of the leaders in the world are too shocked to do anything other then throw money at the perceived problem. That's all they really know how to do and it's all that the electorate expects. Effective, efficient and economically (long term) viable solutions are not on the table due to the entrenched belief systems of these leaders and their supporting bureaucracies.

Real solutions and tough choices will only be weighed when they have spent all they can spend and it has done nothing. Unfortunately given the world view of those in power, our individual liberties will suffer because all they know is control.

Heh, I knew you'd charge like a bull right at the "Socialist Paradise" wisecrack...it's a joke. I don't want to live in a socialist state any more than you, I was just poking fun of the fact that's the way most conservatives think anybody to left of mAnn Coulter thinks.

And frankly, there is a definition of "socialism", whether Republicans like it or not, and the little "boogie-man name game" doesn't change it. For instance, Venezuela is socialist, Britain isn't. (For the record, I think Hugo Chavez is a pimple on the ass of the world.) Just because a country's got nationalized healthcare, doesn't mean they get to re-write the definition of the word.

As to your other point about scary, scary gov't control, ya know what, if we wouldn't be in this fucked-up, shitty situation if the government would have done its job and "controlled"(regulated) the greedy assholes gambling with our money. That's why they spent 5 billion lobbying to keep themselves regulation-free. They made untold billions for their investment, how'd that work out for us?

In the end, pure libertarianism, like anarchy, seems like such a great idea in the abstract, but doesn't work for fuck-all in the real world. Despite all the happy-horseshit "each to their own" talk, some people and organizations do need to have limits put on their behavior. Nuclear plants. Chemical plants. Money-crazed assholes managing trillions of our dollars.

I hope you're not one of the loons that actually thinks the gov't is going to go door-to-door taking our guns away...

[Shea]

Heh, I knew you'd charge like a bull right at the "Socialist Paradise" wisecrack...it's a joke. I don't want to live in a socialist state any more than you, I was just poking fun of the fact that's the way most conservatives think anybody to left of mAnn Coulter thinks.

And frankly, there is a definition of "socialism", whether Republicans like it or not, and the little "boogie-man name game" doesn't change it. For instance, Venezuela is socialist, Britain isn't. (For the record, I think Hugo Chavez is a pimple on the ass of the world.) Just because a country's got nationalized healthcare, doesn't mean they get to re-write the definition of the word.

Well like anything it's on a continuum. Is Britain closer to a socialistic state then we are? I would say yes. Government control of the means of production doesn't just mean factories. Controlling a service in a service economy is the same thing.



As to your other point about scary, scary gov't control, ya know what, if we wouldn't be in this fucked-up, shitty situation if the government would have done its job and "controlled"(regulated) the greedy assholes gambling with our money. That's why they spent 5 billion lobbying to keep themselves regulation-free. They made untold billions for their investment, how'd that work out for us?

See, this is where we part ways. When and where did we all get together and agree that it was government's job to control anything? I would argue that is was government's reckless and misguided intervention in the marketplace that CAUSED the shitstorm that we are currently weathering.

Yes they made billions and spent billions buying this senator or that congressman. But they took the risk and they lost. So why are we bailing them out? The market would have a swift and sure way of making them pay for playing fast and loose. But government steps in again and effectively says "Hey you screwed the pooch, mismanaged your company and so here is some cash to keep doing what you're doing". Are you defending that?



In the end, pure libertarianism, like anarchy, seems like such a great idea in the abstract, but doesn't work for fuck-all in the real world. Despite all the happy-horseshit "each to their own" talk, some people and organizations do need to have limits put on their behavior. Nuclear plants. Chemical plants. Money-crazed assholes managing trillions of our dollars.

I don't equate libertarianism with anarchy. But each to their own.



I hope you're not one of the loons that actually thinks the gov't is going to go door-to-door taking our guns away...

No, but I don't believe that they want citizens to own firearms (based on their own statements). If they could get away with making it near impossible to own one or buy ammo they will do so. An armed citizenry is the greatest obstacle to the accumulation of power and control.

Don't tell me you are one of those loons (to use your words) that actually believes that government cares about you and your freedom.

From your posts it is apparent to me that you have an emotional reaction to anyone that makes more money than you. If they make this amount they deserve to get screwed, don't have any rights or guilty of some crime. I simply don't understand the view that anyone that makes X amount must have stolen it, exploited someone or whatever. What makes you the arbiter of what someone is worth? Their skills are worth? Where does that power come from?

[Wintermute]

See, this is where we part ways. When and where did we all get together and agree that it was government's job to control anything? I would argue that is was government's reckless and misguided intervention in the marketplace that CAUSED the shitstorm that we are currently weathering.

Yes they made billions and spent billions buying this senator or that congressman. But they took the risk and they lost. So why are we bailing them out? The market would have a swift and sure way of making them pay for playing fast and loose. But government steps in again and effectively says "Hey you screwed the pooch, mismanaged your company and so here is some cash to keep doing what you're doing". Are you defending that?

No, but I don't believe that they want citizens to own firearms (based on their own statements). If they could get away with making it near impossible to own one or buy ammo they will do so. An armed citizenry is the greatest obstacle to the accumulation of power and control.

Don't tell me you are one of those loons (to use your words) that actually believes that government cares about you and your freedom.

From your posts it is apparent to me that you have an emotional reaction to anyone that makes more money than you. If they make this amount they deserve to get screwed, don't have any rights or guilty of some crime. I simply don't understand the view that anyone that makes X amount must have stolen it, exploited someone or whatever. What makes you the arbiter of what someone is worth? Their skills are worth? Where does that power come from?

Ha! Assume much? Just because I have animus toward the assholes that have caused me personally to lose a lot of money, I've now got a problem with rich people as a whole? Nice fucking blanket assumption.

Now, what exact misguided intervention did the gov't perform that caused the CDO/CDS ponzi scheme to collapse? Share, I want to learn.

Finally, why are we bailing them out? The answer usually given is so that the global economy doesn't completely collapse.

[~Barn~]

:spit:


The answer usually given is so that the global economy doesn't completely collapse.

Welcome to the CSC, Mute, you've just made this thread awesome again. And take it easy on Shea. He's a nice enough guy, but the vacuum he's residing in, has a slow leak.

[Shea]

Ha! Assume much? Just because I have animus toward the assholes that have caused me personally to lose a lot of money, I've now got a problem with rich people as a whole? Nice fucking blanket assumption.

Felt it was a pretty accurate given some of the "fucking white collar guy" statements you have made. If not, I apologize.



Now, what exact misguided intervention did the gov't perform that caused the CDO/CDS ponzi scheme to collapse? Share, I want to learn.

It a somewhat larger picture then just the CDO/CDS scheme. The foundation for our undoing was laid by government intervention. Fannie/Freddie, Community Reinvestment Act, loose Fed policies, etc. Yes, Congress did not make use of it's oversight capabilities due to being bought and paid for. However, that makes me trust them less but you trust them more now?



Finally, why are we bailing them out? The answer usually given is so that the global economy doesn't completely collapse.

Sure, that's the cry. You beleive it?

[Shea]

Welcome to the CSC, Mute, you've just made this thread awesome again. And take it easy on Shea. He's a nice enough guy, but the vacuum he's residing in, has a slow leak.

What vacuum am I residing in Brandon? I love how you can come in here after running away with your tail between your legs and claim some sort of high ground.

[Wintermute]

Thanks for the welcome Barn. Cool and interesting folks here-a-bouts.

I don't mind Gixx takin some shots, a nice political dust-up can be fun. I hope he doesn't take it personally, because at the end of the day I sure don't.

I've got very close friends who who probably make him look like Jane Fonda. We fight and cuss and scrap about politics, then go have a beer. Then we fight and cuss and scrap about politics over beers.

Plus, I grew up on a farm in Mid-Missouri, so pretty much everyone I knew outside of my family was just to the right of Dick Cheney. So, I don't value people just by their political leanings, everybody's got their points.

[Shea]

I don't mind Gixx takin some shots, a nice political dust-up can be fun. I hope he doesn't take it personally, because at the end of the day I sure don't.


Don't worry man, you're going on my clock tower list. :)

Hey I'll be the first to admit I'm wrong if what I thought you said and what you actually said aren't the same. Just got the distinct impression from your previous posts that you were going after all "white collar" people. No worries.

[~Barn~]

How can you not get this, Shea?

Don't you understand exactly how much toxic debts A.I.G and banks like AIG "own"?

If we just let them go "by way of nature" or whatever hands-off approach you seem to espouse, do you really think things will somehow, biblically, just "level" themself, w/out disasterous effect on the United States and potentially the entire world?

If we just let them suck-it-up and implode on themselves, don't you get the fact that hundreds (if not) thousands of smaller banks, who are indebted to them, will collapse and in-turn fail, as well? And the eventual effect, that the customers of those banks (read: the public) will have to feel?

We're not talking about the carwash down the street that's charging waaay too much for a wax and a tire shine, we talking about a financial entity that is so large and so powerful, and was so controlling (unregulated for all intents and purposes) over so much American quote/unquote "assets", that if we just let them bite the bullet and fail, that it ripples through an entire nation.
:banghead:

This isn't Crane Cams or The Rocky Mountain News. Their failures are not going to cripple the entire automotive and journalist communities. You let a bank like AIG fail, and you are talking about a legitimate, Nation-Wide, economic nightmare.

Now is not time to start channeling Darwin's theories of evolution into the realm of economics. It just simply doesn't work that way. These financial fixtures *HAVE* to stay in operational existance.

[Wintermute]

Felt it was a pretty accurate given some of the "fucking white collar guy" statements you have made. If not, I apologize.

It a somewhat larger picture then just the CDO/CDS scheme. The foundation for our undoing was laid by government intervention. Fannie/Freddie, Community Reinvestment Act, loose Fed policies, etc. Yes, Congress did not make use of it's oversight capabilities due to being bought and paid for. However, that makes me trust them less but you trust them more now?

Sure, that's the cry. You beleive it?

Yeah, the "fwcg" stuff would give that impression, I guess. My bad.

The factors you quote were magnified, sometimes up to 35 times, by the CDO/CDS mess. The terrible subprime mortgages those entities sometimes gave were rolled up in CDOs, which were then rolled up in another CDO, which was then rolled up in another CDO, and on, and on, and on. So every one dollar of asset that the original bad mortgage was now $35 of "wealth."

And yeah, I do trust more any Congress without Phil "The American people are whiners" Gramm, the architect of this crisis, leading the Senate Finance Committee. The question is, are the Democrats so compromised by Wall Street money that they don't do anything about re-regulating this shit?

I'm really not sure if letting them fail will kill the global economy, but like Barn said, testing that theory and finding that, "Yes they will" isn't the answer. But I'm also not liking how the bailout is going. It seems like we're allowing the same people who fucked up to stay in place while we pay their gambling debts.

I guess the answer is, yes, I want to see the financial structure saved, but I want to see some accountability for those that sunk it. I've never believed for a second that they didn't know exactly at the time that everything, their models, their structures, their AIG CDS "insurance", was complete and utter bullshit that a hint of breeze was going to blow over. They are supposedly "the best and brightest", after all.

[Shea]

As someone who has stated directly that you don't know a whole lot about economics, you sure seem to know how to spend trillions and trillions of taxpayer money.

You have two options to get rid of these "toxic" " "assets" Barn. The first, which you champion, is for the taxpayer to spend an ungodly amount of borrowed fiat money to clean them out. Institutions that created these risky schemes are now rewarded for taking unnecessary risks with their shareholders value. They will continue to limp along.

The second option, which I favor, is for these various institutions that played with fire to die off. Under Chapter 11 bankruptcy protection, the various assets of these institutions would be auctioned off to healthy entities. Those assets that have no market value would be dumped or, someone who see the possibility for a risky venture would take a chance.

Under your scenario, every man woman and child in America owes $30,000 to China and bad actors in the market still taint it. Additionally, the US government is hyper-inflating our economy and doubling our debt AGAIN to nearly $20 trillion.

Under my scenario, they owe nothing and healthy players in the market are left standing. Which is a more wise course of action?

[Shea]

Yeah, the "fwcg" stuff would give that impression, I guess. My bad.

The factors you quote were magnified, sometimes up to 35 times, by the CDO/CDS mess. The terrible subprime mortgages those entities sometimes gave were rolled up in CDOs, which were then rolled up in another CDO, which was then rolled up in another CDO, and on, and on, and on. So every one dollar of asset that the original bad mortgage was now $35 of "wealth."

Oh yeah, leverage is a wonderful thing eh?



And yeah, I do trust more any Congress without Phil "The American people are whiners" Gramm, the architect of this crisis, leading the Senate Finance Committee. The question is, are the Democrats so compromised by Wall Street money that they don't do anything about re-regulating this shit?You mean do you trust Chris "The senator from AIG" Dodd any more. Guess that's up to you :)



I'm really not sure if letting them fail will kill the global economy. But I'm also not liking how the bailout is going. It seems like we're allowing the same people who fucked up to stay in place while we pay their gambling debts.Exactly my point. We have an administration in place that is picking winners and losers in an economy. That never turns out well...because frankly a bunch of lawyers deciding things is not really good for an economy.



I guess the answer is, yes, I want to see the financial structure saved, but I want to see some accountability for those that sunk it. I've never believed for a second that they didn't know exactly at the time that everything, their models, their structures, their AIG CDS "insurance", was complete and utter bullshit that a hint of breeze was going to blow over. They are supposedly "the best and brightest.""Payback", for me, comes in letting these companies and institutions bite the dust. Out of those ashes will come better managed, stronger companies not hell-bent on running these schemes. As it stands now, companies will continue to play these games because they know if the SHTF they can just go crying to Congress to get a bailout. So in the end this course of action PERPETUATES this behavior rather then stamping it out. Pavlov's dog.

[~Barn~]

As someone who has stated directly that you don't know a whole lot about economics, you sure seem to know how to spend trillions and trillions of taxpayer money.

You have two options to get rid of these "toxic" " "assets" Barn. The first, which you champion, is for the taxpayer to spend an ungodly amount of borrowed fiat money to clean them out. Institutions that created these risky schemes are now rewarded for taking unnecessary risks with their shareholders value. They will continue to limp along.

The second option, which I favor, is for these various institutions that played with fire to die off. Under Chapter 11 bankruptcy protection, the various assets of these institutions would be auctioned off to healthy entities. Those assets that have no market value would be dumped or, someone who see the possibility for a risky venture would take a chance.

Under your scenario, every man woman and child in America owes $30,000 to China and bad actors in the market still taint it. Additionally, the US government is hyper-inflating our economy and doubling our debt AGAIN to nearly $20 trillion.

Under my scenario, they owe nothing and healthy players in the market are left standing. Which is a more wise course of action?

I dunno Shea... I liked reading your various "under this scenario" takes, but let's look under reality for a minute.

My family of six has 1 partner gainfully employeed, 1 partner (while although not working) graduating with her Bachelors degree in less than a month, 4 children getting their education, a residence that houses all of us comfortably, 3 vehicles, thousands of dollars in savings/checking/retirement accounts, healthcare for each of us, and very little debt.

You are the guy that regularly posts on our forum about how bad things are going in the world, what a horrible direction we have taken, what a unrecoverable mess we have elected ourselves into, what continual steps we keep taking in disaterous directions, and other joyous tid-bits of doom and gloom; EDIT: All while pairing it with an unyielding Us vs. Them, Good vs. Evil, Liberal vs. Conservative agenda.

Which reality sounds like it's being managed more wisely?

[Wintermute]

Barn, this whole crisis also highlights that "Too big to fail" would, in a sane world, mean "Too big to exist." Mergers and acquisitions have been/are rubber-stamped in this country way, way, way too much.

Time for companies to grow their markets the old-fashioned way: innovation and growing their markets, not buying their competitors.

[Shea]

I dunno Shea... I liked reading your various "under this scenario" takes, but let's look under reality for a minute.

So instead of showing any sort of insight we're just going to go straight to the dodge and deflection phase of our usual "conversations" then Barn?



My family of six has 1 partner gainfully employeed, 1 partner (while although not working) graduating with her Bachelors degree in less than a month, 4 children getting their education, a residence that houses all of us comfortably, 3 vehicles, thousands of dollars in savings/checking/retirement accounts, healthcare for each of us, and very little debt.Congrats on wisely managing your life. In this day and age (and in this society) that is an accomplishment worthy of praise. Has ABSOLUTELY NOTHING TO DO WITH THIS CONVERSATION



You are the guy that regularly posts on our forum about how bad things are going in the world, what a horrible direction we have taken, what a unrecoverable mess we have elected ourselves into, what continual steps we keep taking in disaterous directionsl, and other joyous tid-bits of doom and gloom. Yes I post my and others opinions of what a monstrous cluster fuck the "best and the brightest" are making of our financial systems. But once again, you bring this up why? Somehow this makes me less informed then you because I don't what?



Which reality sounds like it's being managed wisely? You "manage" reality now? I'm still trying to grasp what this tangent you are on has to do with your vision of economic systems and mine...

Edit for your edit: I'll say this Barn. Something you don't realize, fail to see, unwilling to comprehend about me. I am more then willing to listen to a valid argument when it comes to any of my stances. I don't go to the lib/conservative, dem/repub, good/evil place much, or try to stay away as much as possible. You may take it as such and that may rub you the wrong way, but honestly that's your problem not mine. Yes I push back hard when I take issue with a position and yes, I will stand up for mine. Some, yourself included, apparently find this offensive. Welcome to the real world, where not everyone agrees with you.

What I do care about, and where all my positions come from, is an intense, visceral belief in individual freedom and liberty. See you on the field of ideas.

[Wintermute]

Oh yeah, leverage is a wonderful thing eh?

You mean do you trust Chris "The senator from AIG" Dodd any more. Guess that's up to you :)

Exactly my point. We have an administration in place that is picking winners and losers in an economy. That never turns out well...because frankly a bunch of lawyers deciding things is not really good for an economy.

"Payback", for me, comes in letting these companies and institutions bite the dust. Out of those ashes will come better managed, stronger companies not hell-bent on running these schemes. As it stands now, companies will continue to play these games because they know if the SHTF they can just go crying to Congress to get a bailout. So in the end this course of action PERPETUATES this behavior rather then stamping it out. Pavlov's dog.

C'mon guys, I'm learning a lot from this thread, let's not get too heated up.

Anyway, as I told you Gixx, I don't know if the Democrats will be any better. We'll see. Dodd sure as hell isn't the monomaniacal deregulation freak Gramm was.

If we re-regulate them and force them to use mark-to-market and carry sufficient capitalization, there won't be another "crying to Congress" because they'll be actual businesses and not giant ponzi schemes posing as businesses.

But if we take another gigantic gamble and let them fail, and they take our economy down, we're going to have giant problems like the dollar losing it's role as the world's index currency, effecting things like the sales of the bonds we need to move to pay for all this.

In the end, we've all gotta take a couple bites of the giant shit sandwich. Let's make sure the makers of said sandwich are taken out of the sandwich-making biz and pass laws making sure that shit isn't on the menu anymore.

No reason to burn down the sandwich shop. (To further torture the analogy.)

[Shea]

C'mon guys, I'm learning a lot from this thread, let's not get too heated up.

Anyway, as I told you Gixx, I don't know if the Democrats will be any better. We'll see. Dodd sure as hell isn't the monomaniacal deregulation freak Gramm was.

Perhaps not, but he is bought and paid for by AIG, hence the nickname (that I didn't give him). Or how about Barney Frank? Tim Geithner, et al? Face it man, with any of these politicians in charge we aren't exactly in the best of hands...



If we re-regulate them and force them to use mark-to-market and carry sufficient capitalization, there won't be another "crying to Congress" because they'll be actual businesses and not giant ponzi schemes posing as businesses.I can see where you're coming from, however...

The problem with government intereference in the market (and regulation is a form of it) is that it is never ending. Once in they are in. Then we get lobbiests working for companies trying to manage a player (and a very uninformed, ineffcient and bad one) in the market that wields immense power. Now I don't go way down that path and say there should be absolutely no government involvement in the market at all. But I think their roll should be one of "information" only. Make these companies transparent, so anyone doing business with them knows exactly what they are getting into. Don't like what the VP of marketing is making, go elsewhere. Think that their company policy on X, Y or Z is dangerous, vote with your dollars. Information is a powerful thing.



But if we take another gigantic gamble and let them fail, and they take our economy down, we're going to have giant problems like the dollar losing it's role as the world's index currency, effecting things like the sales of the bonds we need to move to pay for all this.

What you are afraid of happening, is happening now just with a buttload of debt with it. Geithner just went before Congress and said he's "open to the idea" of a new world currency replacing the dollar. Last Tuesday the Fed monetized $300 billion in T-Bills that went unsold.



In the end, we've all gotta take a couple bites of the giant shit sandwich. Let's make sure the makers of said sandwich are taken out of the sandwich-making biz and pass laws making sure that shit isn't on the menu anymore.

No reason to burn down the sandwich shop. (To further torture the analogy.)See I think this is where we differ. We agree on a lot of the bs, but I think the economy would be much, much, much stronger with these guys out of the pool. And there are mechanisms in place to do that. But we're being sold a bill of goods (imo) that we can ill afford.

[~Barn~]

Fair enough Shea.... And maybe it was inconsequential and misguided of me to try and introduce something personal with my last post that has nothing to do with anything on the level we're talking about. But I sure do somehow feel as though I get discredited by you an awful lot. And if I made things personal, it was because I have felt that they were made personal, to me.

But whatever... I'm over it now. I'm home. I'm packing for a ski weekend. I just burned one. Whatever... life is good, and I'd rather make friends on this forum than enemies, and I really don't think I'd ever take any of this political stuff so personally, to where it would prevent me from being cordial with somebody. I agree to diametrically disagree with you, on many a subject; economic and public policy, clearly at the forefront. But I am not going to read into any of this ever, as to the point of disliking you.

So in what I hope will be one of my final posts to this thread, I reference back to something I said a few months ago, and with as much humility I as I can muster. It was just a few months out on the election, and I said something to the affect of "I hope my guy wins. Thoroughly."

Well now all I can say is this... I hope President Barack "I don't always wear a flag pin on my suit" Obama, (still my guy, for the record) is going to make good on everything he is trying to do. I believe he is surrounding himself with the right people to do it. I find his intelligence and his candor refreshing. And more than anything, I have faith in his efforts as being morally sound, fiscally educated, and I believe in not only in my heart, but also in my personal judgement, that he is performing his job with no higher regard being that of the American people. Not the elite, or the powerful, or the controlling, or the wealthy. Not his peers; but the American people who are generally suffering right now. And I hope the steps being passed down by this administration, end up proving you absolutely wrong. On what I would think is virtually every belief you have of them. I hope that's how things go.

[Wintermute]

[snip]
The problem with government intereference in the market (and regulation is a form of it) is that it is never ending. Once in they are in. Then we get lobbiests working for companies trying to manage a player (and a very uninformed, ineffcient and bad one) in the market that wields immense power. Now I don't go way down that path and say there should be absolutely no government involvement in the market at all. But I think their roll should be one of "information" only. Make these companies transparent, so anyone doing business with them knows exactly what they are getting into. Don't like what the VP of marketing is making, go elsewhere. Think that their company policy on X, Y or Z is dangerous, vote with your dollars. Information is a powerful thing.
[snip]


I'm not a fan of onerous, suffocating over-regulation, but what we got/have in the financial markets is complete anarchy. There has to be some kind of a regulatory framework not only to protect we consumers, but to protect the fairness of the markets.

For instance, my old hometown bank, United Missouri Bank (for whom I've done consulting) didn't expose themselves to CDOs. Now they look like heroes for being conservative, at the time they looked like idiots for not jumping in. Here's their 10-year chart (http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chdet=1238196409958&chddm=1000960&q=NASDAQ:UMBF&ntsp=0), nice and boring until people realized they'd be safe harbor for the storm.

It wasn't fair to honest banks like UMB that dishonest banks were using unregulated gambling to inflate their numbers to match. It's like a football game where one team is allowed to use their cars on the field.

As far as transparency saving us, no way, no how. I've got a minor in economics and 15 years in financial reporting, and I can't make heads or tails of some of this shit. There just has to be regulations. Like I said, they had the chance to not screw it, but they couldn't resist, so like a child lighting fires, we gotta take their matches away.

Talk to ya later, gotta git.

[Wintermute]

Good post Barn. I'm liking most of what Obama's doing (not all), but am very worried about bailout. A couple of stories that feed that anxiety: Taibbi's piece in Rolling Stone (http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print) and this one in Harpers (http://www.theatlantic.com/doc/200905/imf-advice).

Have a good weekend.

[Rhino]

Anyway, as I told you Gixx, I don't know if the Democrats will be any better. We'll see. Dodd sure as hell isn't the monomaniacal deregulation freak Gramm was.



http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=related (http://www.cosportbikeclub.org/forums/%3Cobject%20width=%22425%22%20height=%22344%22%3E% 3Cparam%20name=%22movie%22%20value=%22http://www.youtube.com/v/_MGT_cSi7Rs&hl=en&fs=1%22%3E%3C/param%3E%3Cparam%20name=%22allowFullScreen%22%20va lue=%22true%22%3E%3C/param%3E%3Cparam%20name=%22allowscriptaccess%22%20 value=%22always%22%3E%3C/param%3E%3Cembed%20src=%22http://www.youtube.com/v/_MGT_cSi7Rs&hl=en&fs=1%22%20type=%22application/x-shockwave-flash%22%20allowscriptaccess=%22always%22%20allowf ullscreen=%22true%22%20width=%22425%22%20height=%2 2344%22%3E%3C/embed%3E%3C/object%3E)
C-span video from 2004. Democrats: Move along, nothing to see here. At the very least, jump to the 8:25 mark. Clinton admits...something.

Now surely, we've all learned from this mistake that is the Community Reinvestment Act and won't ever be put in a similar "crisis" ever again, right? :
http://www.politico.com/news/stories/0309/20129.html
"But Reps. Luis V. Gutierrez (D-Ill.) and Eddie Bernice Johnson (D-Texas) are championing legislation that would expand CRA to nonbank financial institutions, including mortgage companies, insurers, securities firms and credit unions."
Now they want to force the Credit Unions to make sub-prime loans!?!? We truly are fucked :(

And what about banks that managed to dodge this mess. All 1 of them:
http://www.bizjournals.com/boston/stories/2009/03/16/story3.html
End result: "Still, the FDIC slapped East Bridgewater Savings with a rare “needs to improve” rating after evaluating the bank under the Community Reinvestment Act."
Basically, you DIDN'T fuck up enough that we can validate taking a controlling share of your business, you need to fix that.


Why is it so hot and why are we in this handbasket?

[Shea]

Well now all I can say is this... I hope President Barack "I don't always wear a flag pin on my suit" Obama, (still my guy, for the record) is going to make good on everything he is trying to do. I believe he is surrounding himself with the right people to do it. I find his intelligence and his candor refreshing. And more than anything, I have faith in his efforts as being morally sound, fiscally educated, and I believe in not only in my heart, but also in my personal judgement, that he is performing his job with no higher regard being that of the American people. Not the elite, or the powerful, or the controlling, or the wealthy. Not his peers; but the American people who are generally suffering right now. And I hope the steps being passed down by this administration, end up proving you absolutely wrong. On what I would think is virtually every belief you have of them. I hope that's how things go.

Fair enough Barn. You do like to lump me in with the "he doesn't wear a pin!", "his middle name is Hussein!", "hes a Democrat and therefore Satan" crowd whenever and wherever you can. You seem to think my vehement disagreement with our current economic policy is some superficial belief that we should just be an anarchy. And further you seem to think my beliefs are somehow unfair or mean or whatever...sometime I can't comprehend what your disagreement with me is.

Yes you are a liberal and believe that government should control far more of our lives then I do. Somewhere along the line you made the decision that someone else is a better judge of what is right for you, your family, your neighbors and your community then they are. And you want those beliefs to be justified. Fine.

I, obviously, don't agree with that world view. You want me to be proven wrong. You want me to shown that someone else can make better decisions for me then me. I can't comprehend that. In fact, slavery (which that is) is so horrific to me I'm willing to lay down my life to prevent that.

The basic value that all my beliefs come from is freedom. It is a very hard, adult way of viewing things but also incredibly liberating and growthful. I believe in my heart of hearts that you, as a human, individual and a citizen are free to do (and suffer whatever consequences and reap whatever rewards) as you please if it doesn't effect me. You don't and I find that incredible. In that view you are no different then the anti-gay marriage proponents or the ultra Christian right. You all want to impose your belief systems on others. That is not freedom, it is the worst type of coercion.

I want everyone, regardless of race, sex, sexual preference, height, weight, hair color, color of car, whatever, to live as free a life as possible without people like you, Obama, Pelosi, Reid, Bonner, Graham, Bush, Pat Robertson telling ANYONE in this country how to live, where to send their kids to school, who to pray to. Further I want government out of my life economically. I want them to stop forcing me through threats and intimidation to give up (an ever increasing) part of my labor to pay for their mistakes. I want them to stop mortgaging my and my children's future because they are incapable of restraint and care only for their own power.

You, through your own words, are diametrically opposed to that vision. Fair enough, but know that any time you come on here and post it I will be there to call you on it. Given your track record, you will dodge, deflect and be unwilling or unable to stand up to any sort of critisim of your intellectually and historically bankrupt ideology. And all you will be able to do is come up with some lame excuss as to why Obama is "your man" and you hope his (in my words) monumentally bad and misguided policies formed by his advisors (who oversaw the screwups in the first place) suceed in proving that freedom, liberty and free markets don't work.

Game on.

[Rhino]

I want them to stop forcing me through threats and intimidation to give up (an ever increasing) part of my labor to pay for their mistakes. I want them to stop mortgaging my and my children's future because they are incapable of restraint and care only for their own power.


Your views intrigue me and I would like to subscribe to your newsletter.:up:

[Shea]

Your views intrigue me and I would like to subscribe to your newsletter.:up:

hehe thanks Rhino. Sometimes I feel like I'm the only one that cares about this stuff anymore...

Then you get validation from the likes of Ron Paul:

http://www.321gold.com/editorials/paul/paul032709.html

[Wintermute]

[snip]
Why is it so hot and why are we in this handbasket?

The huge majority of the troubled mortgages that are the foundation of this mess were massively leveraged, bundled, and sold by discount brokers like Countrywide, not the banks that handled CRA. CRA defaults are a small fraction of the total crisis.

The true cause of this all is very powerful, well-connected people in the financial world making a huge bet with borrowed money, our money, and missing. The bet was that real estate would appreciate in price forever. They lost, we pay.

In the end, we have no one to blame but ourselves for electing idiots like Phil Gramm. They took tons of money from the financial titans and looked the other way while they had their big hookers-and-blow orgy with our money. Or any of the other nitwits, both parties included, who let/continue to let companies merge until they get "too big to fail". Look at IBM buying Sun, 50k jobs gone. Where's Teddy Roosevelt when you need him?