Wednesday, Mar 18, 2009
The peasants are revolting
The Times: Armed guards at AIG offices after death threats over bonuses
A wave of popular anger over the $165 million (£118 million) in bonuses received by executives of American International Group (AIG) is threatening to engulf the insurance company and cause deep damage to President Obama’s infant Administration.
Armed guards have been stationed outside the Connecticut offices of AIG Financial Products (AIGFP), where death threats have been pouring in and some employees have resigned or have refused to turn up for work.
Andrew Cuomo, New York’s attorney-general, has used subpoenas to discover that the company paid bonuses of $1 million or more to 73 executives, who stayed at AIG to help it to unwind its $1,600 billion portfolio of credit default swaps.
Posted by devo @ 12:12 AM (813 views) Add Comment
11 Comments
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1. devo said...
See also...
Off With Their Heads: Samples of AIG Outrage
The American public has finally found a corporate villain for channeling its frustrations.
Since the financial crisis began, Americans have been looking to vent their anger over a situation they can't control but are going to have to pay for. It wasn't easy to find a target at first. After all, the arcane dealings in collateralized debt securities and credit default swaps made it hard to understand what was going on, much less know whom or what to blame.
http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090317_032819.htm?campaign_id=rss_daily
2. devo said...
In other news...
Tim Geithner, America’s beleaguered Treasury secretary, faces a critical test of his credibility when he unveils a much-awaited plan to take toxic assets off bank balance sheets – in an announcement expected in the coming days.
Mr Geithner, whose initial announcement last month on the troubled asset purchase plan disappointed the market, has become the target of criticism in Washington and on Wall Street, with some questioning whether he can deliver.
Speaking on condition of anonymity, senior Democratic figures questioned whether Mr Geithner has the credibility with the markets and Capitol Hill to push through a new request for funds. “The more time passes, the more convinced I am that Tim Geithner is becoming a liability for the administration,” said one Democratic lawmaker.
Analysts say President Barack Obama would face steeper odds persuading Congress to authorise more money to recapitalise the banking sector if Mr Geithner was the one making the request. Mr Obama included a $250bn (€192bn) financial sector bail-out item in the budget he announced last month implying the administration will need up to $750bn more in troubled asset funds.
“I don’t think Tim Geithner will last beyond June – he has no credibility with the markets,” said Chris Whalen, managing director of Institutional Risk Analytics, a financial research group. “Given what we already know about the toxic asset purchase plan, I very much doubt he is going to turn this situation around.”
http://www.ft.com/cms/s/0/ca89a806-1314-11de-a170-0000779fd2ac.html
3. devo said...
More from the FT...
Hope evaporates as confusion descends
March 17 2009 18:57
The longer toxic assets rot unresolved on banks’ books, the longer investors will keep fretting about the health of banks – and finance will stay frozen.
Moreover, the deeper the sense of policy confusion, the greater the risk that eventually investors start to lose faith in the US’s policymaking machine. In the past year, most investors have blamed Washington’s apparent inability to produce effective policies on the outgoing administration. What is scaring some observers now is a fear that the problem may be structural, not personal – meaning it cannot be fixed by a few name changes.
...after a year in which the world has already lost faith in US banks – and almost every other pillar of the financial world – it can ill afford to lose confidence in the US system of government too.
http://www.ft.com/cms/s/0/898854c8-1324-11de-a170-0000779fd2ac.html
4. devo said...
Ah, I remember the good old days when finding mainstream 'financial armageddon' articles used to take some effort.
Now, it's like shooting fish in a barrel.
5. Eternal Sceptic said...
When is open season declared on bankers and financial advisors? and what cost will the license be?
6. it_is_going_with_a_bang said...
Management? hardly.
They would have known how well this would go down and should have discussed it at length with their government before paying the bonuses.
Therefore, the management went against the interests of their major shareholder on purpose. They should be sacked now and replaced with people who are honest.
Although it may take quite a while to find honest banking/insurance management. Just look at HBOS, they could have just sacked their terrible leader but instead chose to pay him a vast pension - thank you very much here you go. The whole system of management in place in these institutions is totally corrupt.
7. crunchy said...
"Armed guards have been stationed outside the Connecticut offices of AIG Financial Products (AIGFP), where death threats have been pouring in and some employees have resigned or have refused to turn up for work."
Guns are much more effective than green slime. When you work on the lower rungs the pathetic bonus does not inspire you to get shot at on the way to work. Not everyone is on the bonus fat cat gravy train.
8. drewster said...
crunchy,
You'd have to be brave to resign in this economy, surely?
9. crunchy said...
AN 'ANGRY' OBAMA: "President Obama has taken some criticism for his sometimes cool manner when critics say he should be hot under the collar. AIG was Obama's latest chance to unleash his inner tough guy, when he used an announcement of small business initiatives to attack the company's "recklessness and greed." "How do they justify this outrage to the taxpayers who are keeping the company afloat?" Obama said."
"This isn't just a matter of dollars and cents. It's about our fundamental values."
crunch-Obama the gun grabber backed with Wall St money. Move on, nothing to see here!
From the article.......http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090317_032819.htm?campaign_id=rss_daily
10. crunchy said...
7. drewster
I get your point. Maybe all the fat cats did get the cream, but can they cross the road quick enough now?
11. techieman said...
Ive taken a look at this....http://www.uscourts.gov/understand03/content_3_0.html
and there is no mention of "the court of public opinion". The bonuses are contractual or discretionary. If discretionary then dont pay them.. if not then like it or not the employees are entitled and would probably launch a bad faith claim. And as for deducting them from the next bail out payment thats just very very silly.