Matt Taibbi, with his characteristic snark, drives a pretty good nail into this argument. The execs at AIGFP seem to be saying, “Look, we had nothing to do with the derivative markets. We knew nothing about them whatsoever. We never even heard of such things. But we’re the only ones who know enough about them to fix the problem.”
The people selling insurance don’t have a clue what is backing up their policies. They are in sales and have nothing to do with actuaries or predicted debt/asset ratios. They deal with the contract side and could not be further from that aspect of the business. You made me laugh about car salesmen. I always throw in an easy question (based on the literature in the show room) about the car and without fail am met with a blank stare.
If you mean the swaps, they had 400 page contracts. They were deliberately made difficult to keep people from knowing what they were doing. They knew they were snake oil salesmen selling a product they could not back. For some reason we are supposed to bow to their expertise. I can not forgive their greed and their dishonesty.
I say again we should have broomed every damn one of them. We should have taken it over and replaced the lot. We gave billions to these institutions to free up lending. They gleefully took it and sat on it. They knew they were being charged with jump starting the economy. They did not do it. For a second time they risked the world economy to enrich themselves. Fuck them all.
The execs in question were not trying to fix the derivative market. They were tasked with selling assets to cover the losses. Some of them were working for a dollar and the bonus was their wage.
They sold 1.2 trillion in assets and there is still over 1.5 trillion in assets to be liquidated. I’m not sure who will be doing this in the future because these people have no reason to continue to work for AIG. Read Jake DeSantis’sresignation letter.
The members of Congress who stood in front of a camera and declared they wanted to take away all of the bonuses were: A- too lazy to spend 5 minutes researching this or B- deliberately lying in what is the worst example of voter pandering.
The likely result of this will be a wholesale abandonment of AIG by it’s employees and a slowing of liquidation of it’s assets. At best, those who stay will require an up-front wage which provides no incentive at all to meet the goals Liddy set forth.
That’s a complete fabrication of reality. People in sales do not design the product.
They were charged with selling assets to cover AIG losses which they did.
I personally hope the people in AIG walk away leaving Congress doing what they do best and that’s playing with themselves.
Perhaps a bit of definition for that word “assets” may be useful. Do you mean to suggest things of value?
In 2004 Financial Products div. paid 126 million into a deferred prosecutions fund to settle Federal, and State claims . They did not admit or deny the charges. It was run by Cossano then too.
He did not allow company risk assessment people near his unit.
Cossano was an executive at Drexel and worked for Milken, the junk bond king,who was charged at that time with 6 felonies.
Please tell me why I should see this mess as just a business snag. It was set up by shaky money men to push the wall as far as it could go. They looted their little hearts out.
Cassano is gone. He has nothing to do with this discussion. If you want to start a list of people who want to a pound of his flesh I will be the first person to sign it.
Just out of curiosity, is there a reason they were paid this way instead of getting a straight salary?
He did not act on his own. The cesspool needs to be cleaned.
Yes, assets means things of value. If you read my link in post 284 you’ll understand that the work being done at AIG to recoup the money lost involves the sale of parts of AIG.
The cesspool is effectively gone. If you read the letter I linked you would know that.
That’s just my point, though. I’m not expecting the sales people to have the same level of expertise as the people who did all the behind the scenes calculations - if they did, then why would they be in sales in the first place? I’m suggesting that these people were remiss in their duties by being totally ignorant of what they were backing.
Also, I’d say that car salesman you mention is a bad salesman.
Then who is getting the 218 million dollars of bonuses which were supposedly already contracted. Then who has to be kept on because they are the only ones who can fix the mess they caused .There is a contradiction there. AIG FP was less than 400 people. They are using the Nazi guard defense. I was just a worker doing my job and I never looked up from my desk . I know nothing. I just accepted the huge salaries and bonuses because I was in the room. Sorry, I do not buy it.
I don’t know why this is so hard to understand. AIG is a huge insurance and financial services company. Sales of CDS’s are/were part of this mix. The people responsible for designing the mathematical models behind the failed CDS’s are gone. It’s not that CDS’s are bad, but in this case the models weren’t realistic in the face of an obvious housing bubble.
The people who got the bonuses were not part of the CDS market. They were not trying to “fix” the CDS market nor did their bonuses have anything to do with CDS’s. They were tasked with selling off the financial services part of AIG to generate money to cover the CDS losses. They recovered 1.2 TRILLION dollars by selling off those assets. In the case of the resignation letter I posted, that involved 60+ hour weeks against a $1/year wage. They should be paid.
If it can be proved in court that Cassano and others committed fraud in their risk modeling then they should be held to account to the fullest extent of the law and then some.