nytimes.com— The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.
Mar 25, 2009View in Crawl 4
Company fails, runs out of money, or the government has to step in because they are "to big to fail", contracts get re-negotiated or defaulted on, and any money you don't already have in your hands,(see items like pensions, or bonuses)is not a given. unless you work for the company formally known as AIG, because AIG happens to exist in a parallel universe not subject to the rules given for dealing with failed business because government never got around to classifying them or their relationship with government before they failed.So in this case your probably right, but I have a real hard time caring.
"What is happening now has much more to do with the money supply than it does with what the financial sector has done."No, it doesn't. The financial sector created a very large, unsatisfiable debt through abuse of leveraged securities, that is in turn creating a liquidity crisis. It has everything to do with what financials did, mortgage securities and CDOs. This in turn created a crises of confidence that increased savings rates which restricts the supply of capital. The fact that you are wrong from your very first statement means I didn't read the rest of your post until the last paragraphs where you condescended about teaching everyone on Digg your bulls**t theory of economics where the tails wag the dogs.
Let's see, had AIG NOT been bailed out, they would have gone bankrupt. Had they gone bankrupt, there would BE NO BONUSES. You realize these people had contracts for their bonuses. Once the GOVERNMENT (Obama and co.) decided they'd give tax payer dollars to AIG, they had the money, and could fulfill their contracts. So I guess you think the government can go breaking up private contracts now. And don't forget our Constitution does not allow for ex post facto laws or any bill of attainder, so if they had the money and just didn't get the bonuses, you'd be breaking contracts and it'd be unconstitutional. Not to mention you're mad at people like you and me, didn't do anything wrong, but the ignorant public is after them because the life saving government says they did something wrong. I know someone that worked for a pretty large company that went bankrupt (before the days of government takeovers and bailouts existed). This person had absolutely nothing to do with it, and didn't know what was happening or who was involved, so anyone that says "oh they should just release the names of the people who did it.." couldn't be more ignorant on the matter.I mean geez this isn't difficult to figure out. The government knew this would happen, and gave them the money to do it at our expense. And we're mad at the people who took the money? False. And besides, $150 million is a drop in the bucket compared to the rest of the money they received, so people really need to get off this. The Fed printed a trillion dollars last week, this AIG bulls**t sure was a nice distraction though.
Sounds to me like you've been duped by convenient humanitarian piece that could largely be fabricated. If this guy is really that pissed, I would expect him to initiate legal proceedings.Assuming this real person has the benign intentions you claim (based on no evidence other than that form the horse's mouth), I would expect more of a fight considering the absurdity and extravagance of the claims in this letter.If you ask me, they are blowing smoke up our asses as a distraction from the real issues. This is akin to Congress wasting time talking about steroids in baseball... we've got better things to do.
That's a valid argument, but I don't think it weighs here for reasons I am sick of explaining. This has nothing to do with the validity of a contract. The only reasonable argument in that area is that breaking the contract was not the responsibility of congress or Chris Dodd - but that of the CT court system. Bottom line is this is a retention bonus that was not approved by management, and it is the duty of the company to renegotiate to terms feasible for all interested parties, not just to comply with the contract - or refute it outright.I completely agree, but you would be hard pressed to argue against the point that the "other party [who] decide(s)... value" is the American taxpayer. By that testament, the contracts were void from the beginning as the new managing entity is now the American people.I don't believe in high pay for anyone. I believe in rational pay for everyone. Size and sum are a matter of perspective. Fund managers (and those who "make others money" at the expense of a tertiary party) deserve to be paid a pittance which is not in a direct conflict of interest of one's own business incentive. I'm glad you have the expertise to determine why we will be in this for the next decade, but pardon me if I don't take your word for it.
The fact is the company still does not have the money to pay him. We as tax payers should not pay him the company through their profits should pay him. The bailout was for them to resume loans and help the company survive, not to pay bonuses.Apparently you do not understand one of the reasons they are given a bonus instead of a salary. If the company does not do well they can then withhold the bonus to to keep the company afloat. This company was going under and if it weren't for the bailout he would not even have a job. His contribution to his company did nothing to help keep it solvent.I guess you must work for a bonus.
I'm just curious how many of you are MSNBC watchers. Have you looked at how parent company, GE, has been faring lately. Should Keith & Rachel take 50-75% paycuts because their company is faltering?
The only entitlement whining that I see is that of people who are pissed that they're making $40K working a 40 hour week and getting to spend all of their other time doing what they will, as opposed to spending 100 hours/week in a bank after having spent years in college taking on debt and not making any money.
peepMar 26, 2009
Company fails, runs out of money, or the government has to step in because they are "to big to fail", contracts get re-negotiated or defaulted on, and any money you don't already have in your hands,(see items like pensions, or bonuses)is not a given. unless you work for the company formally known as AIG, because AIG happens to exist in a parallel universe not subject to the rules given for dealing with failed business because government never got around to classifying them or their relationship with government before they failed.So in this case your probably right, but I have a real hard time caring.
staticthunderMar 26, 2009
"What is happening now has much more to do with the money supply than it does with what the financial sector has done."No, it doesn't. The financial sector created a very large, unsatisfiable debt through abuse of leveraged securities, that is in turn creating a liquidity crisis. It has everything to do with what financials did, mortgage securities and CDOs. This in turn created a crises of confidence that increased savings rates which restricts the supply of capital. The fact that you are wrong from your very first statement means I didn't read the rest of your post until the last paragraphs where you condescended about teaching everyone on Digg your bulls**t theory of economics where the tails wag the dogs.
queenb4libertyMar 26, 2009
Let's see, had AIG NOT been bailed out, they would have gone bankrupt. Had they gone bankrupt, there would BE NO BONUSES. You realize these people had contracts for their bonuses. Once the GOVERNMENT (Obama and co.) decided they'd give tax payer dollars to AIG, they had the money, and could fulfill their contracts. So I guess you think the government can go breaking up private contracts now. And don't forget our Constitution does not allow for ex post facto laws or any bill of attainder, so if they had the money and just didn't get the bonuses, you'd be breaking contracts and it'd be unconstitutional. Not to mention you're mad at people like you and me, didn't do anything wrong, but the ignorant public is after them because the life saving government says they did something wrong. I know someone that worked for a pretty large company that went bankrupt (before the days of government takeovers and bailouts existed). This person had absolutely nothing to do with it, and didn't know what was happening or who was involved, so anyone that says "oh they should just release the names of the people who did it.." couldn't be more ignorant on the matter.I mean geez this isn't difficult to figure out. The government knew this would happen, and gave them the money to do it at our expense. And we're mad at the people who took the money? False. And besides, $150 million is a drop in the bucket compared to the rest of the money they received, so people really need to get off this. The Fed printed a trillion dollars last week, this AIG bulls**t sure was a nice distraction though.
mwilhelmMar 27, 2009
Sounds to me like you've been duped by convenient humanitarian piece that could largely be fabricated. If this guy is really that pissed, I would expect him to initiate legal proceedings.Assuming this real person has the benign intentions you claim (based on no evidence other than that form the horse's mouth), I would expect more of a fight considering the absurdity and extravagance of the claims in this letter.If you ask me, they are blowing smoke up our asses as a distraction from the real issues. This is akin to Congress wasting time talking about steroids in baseball... we've got better things to do.
mwilhelmMar 27, 2009
That's a valid argument, but I don't think it weighs here for reasons I am sick of explaining. This has nothing to do with the validity of a contract. The only reasonable argument in that area is that breaking the contract was not the responsibility of congress or Chris Dodd - but that of the CT court system. Bottom line is this is a retention bonus that was not approved by management, and it is the duty of the company to renegotiate to terms feasible for all interested parties, not just to comply with the contract - or refute it outright.I completely agree, but you would be hard pressed to argue against the point that the "other party [who] decide(s)... value" is the American taxpayer. By that testament, the contracts were void from the beginning as the new managing entity is now the American people.I don't believe in high pay for anyone. I believe in rational pay for everyone. Size and sum are a matter of perspective. Fund managers (and those who "make others money" at the expense of a tertiary party) deserve to be paid a pittance which is not in a direct conflict of interest of one's own business incentive. I'm glad you have the expertise to determine why we will be in this for the next decade, but pardon me if I don't take your word for it.
vision777Mar 27, 2009
The fact is the company still does not have the money to pay him. We as tax payers should not pay him the company through their profits should pay him. The bailout was for them to resume loans and help the company survive, not to pay bonuses.Apparently you do not understand one of the reasons they are given a bonus instead of a salary. If the company does not do well they can then withhold the bonus to to keep the company afloat. This company was going under and if it weren't for the bailout he would not even have a job. His contribution to his company did nothing to help keep it solvent.I guess you must work for a bonus.
groundhogboyMar 31, 2009
I'm just curious how many of you are MSNBC watchers. Have you looked at how parent company, GE, has been faring lately. Should Keith & Rachel take 50-75% paycuts because their company is faltering?
groundhogboyMar 31, 2009
The only entitlement whining that I see is that of people who are pissed that they're making $40K working a 40 hour week and getting to spend all of their other time doing what they will, as opposed to spending 100 hours/week in a bank after having spent years in college taking on debt and not making any money.
ShovelbabyMar 31, 2009
I said the "country", not the world. NY is number 1 in the country, which even your link shows.
jack8irelandJul 5, 2009
So what has happened to all this now the storm has died down, business as usual I suppose?<a class="user" href="http://digg.com/users/jack8ireland">http://digg.com/users/jack8ireland</a>