From what I was able to dig up in about 2 minutes of searching, JP Morgan is not going to be using TARP funds for these planes and won’t be taking delivery of them until 2013 at the earliest. In addition, again, there is a seemingly inability to grasp the numbers here.
The planes are $120 million (for both)…along with the hanger upgrades ($18 million) that brings the grand total up to $138 million. That SOUNDS like a lot of money…but in reality it’s a touch over half of a percent of the bail out money we loaned (LOANED) to JP Morgan ($25 BILLION).
Again, this is a hurricane in a tea kettle. The only ACTUAL problem here is that from a PR perspective in the current climate it was a really bad move (even though they are going to be using their own assets to make these purchases).
I’m sure none of this is going to penetrate the meter of bone you have between your ears gonzo, but you did ask why you (and I wonder how the folks on ‘your’ side feel about having such a stalwart and true ally such as yourself on their collective side) were wrong again.
Ah! So the money in the right hand pocket, that’s their money. The money in the left hand pocket, that’s our money. Well, good, that’s all sorted out, wouldn’t want them being fast and loose with our money.
And as far as I’m concerned, its only a loan (LOAN) when we get it back (GET IT BACK). If we don’t, its money that has been pissed away (PISSED AWAY).
Couldn’t agree more, old boy! Of course, getting back to the subject of THIS thread, it’s interesting that both our government and many of our citizens seem hell bent on making sure that our loans to AIG NEVER get paid back, and the entire company goes tits up. Of course, in ‘our’ righteous rage over less than a hundredth of a percent of the money we loaned THEM going to these bonuses…well, I’m sure that this will sustain us when a hundred billion goes down the tubes, ehe.
No doubt you and others will be quick to point out that this is all because of the flaws in a capitalist system, while the politician’s are quick to point fingers at each other, at the other party, at the President and of course at AIG. The rest of the citizenry will, of course, simply look around in stunned incomprehension until told by someone who to blame. Gonzo will, of course, be quick with a drive by link and some incomprehensible drivel about some tangentially related subject that we are expected to puzzle out from his link alone (if we are lucky it will be tangentially related).
Ah well…maybe hunting and gathering will be a fulfilling and rewarding lifestyle choice after all…
Not using TARP funds? I suppose that is a start. How about funds that the government essentially channeled to Morgan through AIG? Or the mysterious credit facilities created by the Fed? Try to grasp those numbers. Sadly, you won’t be able to, since no one has the slightest idea how much JP Morgan has actually received. For someone committed to the numbers, you strike me as somewhat naive.
Well, we know they have received at least $25 billion, no? Unless you are saying it’s less I don’t really see your point though…and it would have to be a LOT less to make the funds they are spending on these planes and the renovations to their air craft hanger significant.
For someone calling me naive you seem to still not get the point. shrug
Not quite sure what you’re on about, here. On the one hand, you hold this money to be a relatively small matter (“less than a hundredth of a percent”). In almost the same breath, you imply that failure to provide this trivial amount will cause the entire structure to go “tits up”. Well, its either a Big Hairy Ass Deal, or it isn’t. Which?
Ah, are you suggesting we all open our windows and yell about how we’re mad as hell, not going to take it any more?
For you do say that you do not get my point and then turn it around and claim that I do not get the point is, putting it charitably, inconsistent.
JP Morgan has apparently made a claim that the cost of these airplanes was not paid from any funds received from the TARP program. This strikes me as a mealy-mouthed claim, because JP Morgan has received unquantifiably massive additional funds from the government through AIG and through mysterious credit facilities transacted with the Federal Reserve. Did they spend any of this cash on jets? We’ll never know.
Given the deluge of falsehood that has flowed forth from these companies, I am finding it difficult to take anything they say about such matters at face value. I also do not understand how other people who seem to care about numbers and evidence are still willing to believe everything they read.
Whether the money spent on planes is “significant” is entirely beside the point.
Well, that seems to be where the disconnect is, no doubt. I’m not saying that failure to provide the funds will cause the whole structure to go tits up…that would be like saying that the 14th guy to stab Caesar was the one really responsible for his murder.
Let’s see if I can explain this (again). In the current witch hunting environment AIG is being assaulted on two distinct fronts. From a PR perspective AIG is most likely sinking fast at this point. Anyone who was even thinking of picking up some of the Bu’s in the future is going to be rethinking that in light of this spectacular blow up. Perception is everything after all, and right now AIG is perceived to be radioactive. Then of course there is the personnel issue. The folks who have stuck with AIG to try and get it repositioned to be broken up and sold off (so, you know, we can get our fucking money back? Ehe?) are now being demonized and portrayed in the worst possible public light. Why folks think that the majority of them are going to be prepared to stay with the company in the current environment is beyond me…especially in the harsh light of reality wrt the fact that none of them have any kind of long term future with AIG. The company is being positioned to be broken up for scrap…it won’t exist in the future. It’s parts will be (in theory, if we haven’t completely poisoned the well at this point) sold off and incorporated into other companies.
And we put our billions of dollars of investment in jeopardy for what is a laughingly trivial amount because seemingly our politicians and our citizens are too stupid to get this key fact. If AIG were blowing the money on cheap blow and good whores or using the money to make bonfires it wouldn’t matter in the least…as long as they are working to get us the REST of our money back. By blowing the supports out of AIG and perhaps sending the company into a death spiral we have perhaps sabotaged this effort.
Get it now?
Why no. I never suggested anything of the sort. I was suggesting that, having fucked ourselves about these bonuses through sheer stupidity, that everyone is going to be looking for someone to blame…instead of looking in the mirror.
Those are not mutually exclusive - just because omitting something doesn’t save you much money does not mean that removing it cannot have negative consequences that greatly outweigh those savings.
Of course there are many pockets in JP Morgan. But again without a tax bailout they are out of business. So we are what saved them.
It is at this time a very ,very stupid thing to do.
Get off your knee pads in front of the bankers ,stand up and look into the eyes of a looter. You actually think they are some kind saviors. They are too damn stupid to understand the impact that bonuses, lavish spending on offices and jets make on the public. But you are simply too much in love with these looters to recognize the harm they are doing. They think they are so far removed from the taxpayer that publicity means nothing. This move was stupid.
They got 25 billion in TARP money.
Not following this line of reasoning at all, XT. PR damage to AIG’s reputation will make it more difficult to sell off its “assets” (and I use the term advisedly)? This, then, is the dread peril?
Well, first off, I’m not sure AIG’s reputation can be sullied, its pretty much shit as it is, won’t get browner, won’t stink more. And if potential buyers are skeptical, well, all to the good, they should be. But if the AIG Goldmine is a viable, profitable and attractive endeavor, and is offered at a bargain price, I daresay the buyers will find a way to overcome their revulsion. They usually do, when there’s money to be made.
“Wow, this gold mine returns a million bucks a year, they’re selling it for 20 bucks!”
“Can’t do it, the wretched treatment of AIG’s employees will taint such money forever! We would be forever shamed!”
That is ONE of the ‘dread peril’(s), yes. The other has to do with credit and their standing…a downward spiral in this would me the company goes belly up (this was, in fact, the reason the bailout for AIG was rushed in the first place).
Well, frankly, that’s because you haven’t been actually following along…lost no doubt in your righteous rage, to be sure. This (manufactured) crisis has brought AIG to the brink.
And that’s, frankly, because you don’t have any idea what you are talking about on this subject. Many of AIG’s BU’s are still quite solid, and would make very valuable acquisitions…if there were credit available for someone to buy them. If the company doesn’t go tits up in the mean time.
Perhaps they will…if 2 or 3 (or more) months down the pike there still IS an AIG to be broken up and sold. Right now there is a liquidity shortage in the system, so it’s doubtful that, even if AIG were ready to start selling off BU’s that are solid anyone could buy them.
In order to make money you have to have money. And right now, anyone who DOES have the money is probably keeping it under a tight lid. Especially in light of this bonus bullshit they are going to be even less inclined to fork that money over even for solid BU’s…and none of this take into account that AIG isn’t ready, at this time, to start breaking things up and selling bits of it off to start paying us back.
Thanks to folks as generally well informed as you are on this subject we may NEVER get to that point.
What I think is truly ironic in all this is…reading an AP article on this, Obama actually seems to GET this. While a lot of his faithful followers (and those idiots in Congress on both sides of the great political divide) don’t. Obama, if allowed to do what he is seemingly proposing to do could actually save this lash up…but he’s getting hammered from both political sides and will probably have to compromise his plans because of an aroused (and frankly ignorant) public.
I guess we’ll see. It will be more than ironic if AIG goes tits up and takes our $100 billion dollars+ down the drain with them over a measly $165 million…a figure that our own government regularly pisses away on an almost daily basis for all manner of wasteful and stupid programs. But you know what they say…a hundred million here, a hundred million there, after another 99.9% you are talking real money…
Elucidator beat me to it, but there’s no meaningful distinction between “TARP funds” and not TARP funds. JP Morgan’s getting a big bag of money to stay afloat. It goes in, and then it goes out. You can’t say which dollar paid the janitorial service, or the electric bill, or for photocopier toner, or towards the fancy jet.
Thank you for your links, and for the candor in your summation, Sam Stone. You do, I presume, recognize that this tends to undercut the position that there is a clear disconnect between the reckless actors at AIG, and the recipients of the bonuses. Under the circumstances, I would hope that if you wish to deny the validity of the bewildered rage that your counterparts are experiencing (and expressing), you will either come up with a new argument, or find a way to remove the uncertainty.
As it is, unless and until further details come to light, my take on it is this: There is an old saying, not merely in Texas and Tennessee, that goes, “Fool me once, shame on you; fool me twice, shame on me.” (I never found a lot of enjoyment in spoofing the mangling that Bush the Lesses subjected it to.) Well, we appear to have been fooled for at least a third time, here (bank bailout funds being sat on, rather than loaned out; and a prior round of bonuses that had come to light late last year). Shame on us (as personified by the government officials who have been careless enough to put the American taxpayer into this situation without needing to scramble around putting out PR fires).
Folks, if any new bailout plans need to be generated and enacted, they will depend on the willing acceptance of the institutions being assisted. The willingness of those institutions to participate will rely on them being able to put their personnel to work carrying out the actions required to make the programs work. If the US government has taken on the reputation of being an untrustworthy participant in the programs (and it cannot be denied that passing after-the-fact confiscatory taxes on the personnel on the front lines will tend to generate that reputation), then no new programs will be possible. This is the type of thing xtisme is referring to when he makes remarks about “hunting and gathering” and trading pigs for plows.
Yes, we’re apparently holding the shit end of the stick on the programs that have already been passed and swung into action. I’m not going to say that there is no righteousness to the rage about that fact. At the same time, I’m skeptical that any action can productively be taken to hand the shit end back to those who are perceived to be the miscreants. If there are any other programs waiting in the wings, the government needs to deliberately analyze them for booby-traps, and if they find any, find a way to neutralize them, even if it means repealing the underlying legislation and starting the process over again. And we have to insist that the process of crafting any future programs is done a lot more carefully.
Well, I think that funds are a bit better organized from an accounting perspective than that. But ok…let’s just say they are lying and are in fact using the TARP funds to buy two shinny new planes and renovate their hanger. So what? It’s not even a half of a percent of what we have given them.
The key here is what are they doing with the REST of the money. Are they making sound investments? What are the plans to pay us our money back? Will purchasing these planes have a positive, negative or neutral effect on that goal?
And of course, the question not answered in gonzo’s drive by link is…WHY are they buying new planes at this time? Executives need a new toy? Because they use a lot of private flights and it will save money? Their older planes getting a bit long in the tooth? Tax reasons? Other?
Frankly I have no idea…google searching on the details of the story simply turn up links back to the original story. Which, unsurprisingly gives few of the important details while simply stressing or re-hashing the smoke screen. Perhaps in JP Morgan’s case they ARE being willfully stupid and greedy, etc etc, blah blah blah. This doesn’t of course have any impact one way or the other on what AIG is doing though…it was merely a diversion by gonzo to ‘prove’ how all of these companies are evil greedy grasping bastards and how the capitalist system we have is fundamentally flawed and needs to be tossed out, etc etc…
Naturally, I am in awe of your comprehensive knowledge of all this, as are most of us, I have no doubt. Perhaps if you might share your bona fides with us? Mr. Krugman has that silly little medal, and you have…? Well, thus far, you have your self-appointed position as The World’s Foremost Authority, passed on by the late, great Prof. Irwin Corey.
It is? I rather thought the rush to bail out AIG was to reassure people holding its wildly over-leveraged “credit swaps”. Have you a cite handy on that one? Just for those ignorant souls who are unfamiliar with your vast authority on the subject, you understand.
It wasn’t “on the brink” already? Astonishing news, seeing as I’ve been reading about them being in full scale emergency mode for some weeks now, long before this latest scandal. So, before this story broke, they weren’t in too bad of shape? But now, they are in deep kim chee? While you’re getting that other cite, mind fetching this one as well?
Why? Says who? Is there some psychological mechanism at play here that will prevent solid investments from being sold? A voodoo curse? You tell us it is so, but you don’t tell us why. Tell us why.
There is a perfectly valid debate on that subject, and it centers on the valuation of the underlying securities. For instance, one of many, a spirited discussion between Brad DeLong and Paul Krugman…
So it appears, then, that the issue is not as cut and dried as you make it out, not simply a matter of ignorant baboons refusing the glowing intelligence of mavens such as yourself. Mind, I don’t include those links for your edification, I’m sure such lesser minds are quite beneath you, but others may find them informative.
Of course, feel free to rebut them, but perhaps you might offer us a bit more substance, a bit more than “XT says it, I believe it, that settles it!”. Up to you, really, your reputation is secure, no doubt.
*Who *again exactly do you think it is that has taken on the reputation of being untrustworthy in these programs? :dubious:
It can, however, be denied that requiring that all of this reprieve money be used in the interests of its investor, the people of the US, becomes “confiscation” when measures are taken to enforce that requirement.
I will, of course (in my copious spare time) slog through your drive by links 'luci to see what you are on about. Since you are undoubtedly waiting on the seat of your chair for my response I’ll do what I can.
This is of course what I was talking about here…it’s curious from someone who obviously THINKS they have a good handle on this (based on your droll but cutting counter remarks back at me), since it’s so basic.
This was, of course, what precipitated the crisis…losing their credit rating would have been the final straw. This isn’t what CAUSED the entire crisis…but then, I didn’t claim it was.
I’ll see what I can do finding you a cite for this. My understanding is that AIG was in critical but stable condition prior to this blowup, but that this could be the death blow. At this point it’s up in the air. But all you are seemingly asking me here is to backup my claim that AIG had stabilized their situation (though it remained grave, to say the least). I based my own statement on something Liddy said in the hearings about how they had managed to stabilize the situation (and shouldn’t need to use the additional $30 billion in holding to keep their credit rating up).
I did tell you why. If AIG completely folds then we are SOL for getting our money back. The entire thing will go into bankruptcy and the various BU’s will be sold for fire sale prices (if at all). Seems pretty logical to me. Tell me which part of this you find unreasonable and I’ll do my best to respond. Try and rein in your sarcasm and wit and ask whatever you are having a problem with straight out…unless you really don’t want a straight answer.
Well, since you just tossed in a bunch of links without going to the trouble of highlighting the parts you found interesting or significant I’ll need to slog through them to see what you are getting at (hopefully). Perhaps, if you REALLY want to discuss this, you should throw your laundry list of links into the GD thread on this same subject.
I’ve glossed over huge parts of this thing. Cut and dried?? It’s to laugh. This thing has the complexity of Quantum Mechanics and is probably less understood! And I never claimed to be an authority on this subject. Unlike you, I know perfectly well that I’m no expert on this.
Scylla now…HE seems to at least have a clue on what’s going on.
I’ve glossed over huge parts of this thing. Cut and dried?? It’s to laugh. This thing has the complexity of Quantum Mechanics and is probably less understood! And I never claimed to be an authority on this subject. Unlike you, I know perfectly well that I’m no expert on this.