Where is my Bonus?

[Viva_La_Migra]

That would have been a viable position prior to handing money over to them. But after that has happened its too late.

Its not like poker where pot odds can dictate how much to throw in for a given hand. The poker analogy to bailouts would be something closer to this: the government, with unlimited chips, blind raises the ante into a position that forces them also to be pot committed.

(Even thats not exactly right because with unlimited chips, you should never be pot committed. But it gets the idea across.)

Reminds me of a Kenny Rogers song...and the government didn't know when to fold 'em!

 

[CountryBoy]

How about a new approach. No more bailout money at all for AIG. Cut our losses as taxpayers and let them sink.:toung:

I've got no problem with cutting off all funds to failing companies and let the strong survive, but that's capitalism and this government aims to turn this country into a socialist country, so I'm not going to hold my breath. At least our money will be worth something, because when inflation hits, our money is going to be worthless, but then Uncle Sugar will be there to run our lifes and wipe our butts for us. :laugh:

The Feds have been stealthly attacking our 2nd amendment rights by destroying fired brass casings by turning them into scrap metal under the guise of saying that the Department of Defense had placed small arms cartridge cases on its list of sensitive munitions items as part of an overall effort to ensure national security is not jeopardized in the sale of any Defense property. How does turning them into scrap ensure national security is not jeopardized? This was .223 and .308 ammunition. Hunters know what this caliber is used for. Thank goodness for the Senators from the state of Montana stepping in and putting a halt to this obvious end around attempt to gut the 2nd amendment.

BHO, well his puppet master, and his thugs must really think we are stupid, trying to sneak this thru. This is just a downright blatant attack on the 2nd amendment thru the back door. I realize that alot of folks could care less about the 2nd amendment, but disarming the citizenry is the first step towards dictatorship, why the heck do you think our founding fathersput it in the Constitution right after Freedom of speech, they had witnessed what could happen. And after the 2nd, they'll just get more brazen abouttheir plans, cause they'll see that the people will just go belly up, if it doesn't affect them. That's sad.

What else is going on that we are unaware of? We're going to wake up one morning and wonder how we got here, but I sure that there are alot of pople that wouldn't care if the Constitution is gutted as long as they get their welfare checks and entitlements from their keepers.

CB

 

[Aule Mar]

I think budnipper hit the nail on the head it's hush money to keep everybody involved quiet. If these guys were fired they might talk
and we might see some jail time for the masterminds behind the derivative scam. I really don't think you need the creators of the derivatives there to "unwind them" just a good accountant. I'm just a nuclear engineer so for half of there bonus check (500K) I'll offer to do it.

 

[wwwtractor]

It is always good when you can pay yourself a bonus using other peoples money. Look at the ownership of AIG compared to the leaders of the government.

 

[Spaf]

..What exactly did these "executives" do to deserve bonuses?
..What kind of contract with these "excellent" executives would be "binding" after that company filed bankruptcy?
..If AIG's reason for paying these ridiculous bonuses is to "retain" these people due to their "value" to the company,...​

Agree wit bn

Some truth (clairity) is needed in these bonus payouts....

1a. Who recieved the bonuses??
1a. What did the contracts actually say??
1b. Was there a performance criteria??

2. Who approved the bonuses, under who's authority?

3. How many "bonus" people were retained, how many were lost?​

 

[Thunderhorse]

What Did the Feds Think When They Gave AIG Money?
By Bill Bonner •
March 19th, 2009

"Stone him to death!"

No kidding. Dilapidation may be coming back into style. That's what one of Madoff's victims proposed in front of the courthouse.

We're in the "anger" stage, writes John Authers in the Financial Times. No more denial...now, people want blood.

After the South Sea Bubble blew up, in the 18th century, the Walpole government was faced with similar anger. It seized the property of the company's directors and used it to pay off the victims. Then, a resolution was proposed in Parliament by which the bankers involved in the scandal would be tied up in sacks filled with snakes and tipped into the Thames River.

So far, Congress has not proposed stoning Fannie Mae or sending AIG directors to the bottom of the Potomac. But it must be warming to the idea.

"Congress is looking for heads to cut off," says the French press.

One member of Congress - Senator Grassley - retreated from his call for AIG executives to commit suicide. It would be all right with him if they just showed a little contrition, he says now.

But all over the world - and especially in Washington DC - the mobs are out in the streets with liquor on their breath and ropes in their hands.

The proximate cause of this anger is the bonuses paid out by AIG - after the company got a taxpayer bailout of $170 billion. According to the New York Attorney General, 73 AIG execs got $1 million + bonus checks.
"Livid Democrats demand AIG return bailout bonuses," says a headline in today's financial press.

We hope you realize, dear reader, that all of this, of course, is just a cynical sideshow. It's a distraction...a self-indulgent tantrum; the real story lies elsewhere...which we'll come to in a minute.

First, the rally is still going on. Stocks have recovered about 10% of their losses so far. And yesterday, the Dow rose another 178 points.

Don't forget, this is not a new bull market. It is a bear trap...a rebound in an on-going bear market. After this phase of anger passes...people will probably feel that the worst is behind us. They'll squint and see a "light at the end of the tunnel." Later on, they'll realize that the light is an on-coming freight train!

Yesterday's up-move was traced to a surprising report from the housing industry.

"Housing starts unexpectedly increase on condos," explains a Bloomberg headline.

And today, the Fed meets. Analysts are betting that the Fed will begin more "massive buying" of assets - especially U.S. Treasury bonds - in order to get more money into the system.

All the news is not favorable, of course. Auto loan delinquency rates are running 9% ahead of last year. Thornburg Mortgage is apparently headed towards Chapter 11. Caterpillar says it will lay off more than 2,000 workers; less construction means less need for heavy equipment. And AMEX says even its best customers are falling behind on their bills.

But let's go back to into the theatre and take our seats: The politicians give money to their pet projects...and then pretend to be outraged when the companies use it to pay their bills. Among their bills were billions in payments to other companies -notably Goldman Sachs, former employer and major source of wealth for the man who designed the bailout, Hank Paulson - and thousands of employment contracts with AIG's salarymen.

What did the feds think when they gave AIG the money? That they were donating to charity?

No, dear reader...the fix was in. And it's still in. And while the press and politicians huff about a few million in bonuses to AIG's hacks, billions more is being paid out to AIG's counterparties.

It's not only a waste of money, says our old friend Jim Rogers, the bailouts actually retard a recovery. How so? In the obvious way. Like any kind of subsidy or welfare payment, they invite people to keep doing what they've been doing - no matter how unproductive it is. Instead of letting AIG and its bosses and counterparties go broke, the feds give the whole brain-dead system a transfusion of taxpayers' money. So the executives don't have to go out and find other work. And AIG can continue peddling its mortgage insurance. And its counterparties, too, are protected from their mistakes.

Of course, the government doesn't want to raise taxes in order to keep these incompetents in business, so it bleeds the money from the next generation of taxpayers - who aren't around to protest. Instead of letting the debt be reduced by the natural process of deflationary default, in other words, the government adds more debt.

Already, as we pointed out yesterday, there's about $20 trillion worth of debt debris that must be brushed aside before the economy can begin rebuilding on a solid foundation. At the present rate of savings, it will take about 45 years to do the job. Which suggests to us that it ain't gonna happen. We don't think the feds can sit still that long. And they're not sitting still now. In fact, they're adding to the public debt faster than the private debt is getting paid down.

By our calculations, the private economy is paying off about $420 billion - net - per year. (Just based on higher rates of saving...not counting write-downs, and defaults.) But the federal deficit is expected to run to $2 trillion! In other words, the feds are adding debt 4 times faster than the private sector is paying it down.

This is not a formula for putting this problem behind us. Instead, it just pushes it ahead.

 

[CountryBoy]

What Did the Feds Think When They Gave AIG Money?
By Bill Bonner •
March 19th, 2009

"Stone him to death!"

No kidding. Dilapidation may be coming back into style. That's what one of Madoff's victims proposed in front of the courthouse.

We're in the "anger" stage, writes John Authers in the Financial Times. No more denial...now, people want blood.

After the South Sea Bubble blew up, in the 18th century, the Walpole government was faced with similar anger. It seized the property of the company's directors and used it to pay off the victims. Then, a resolution was proposed in Parliament by which the bankers involved in the scandal would be tied up in sacks filled with snakes and tipped into the Thames River.

So far, Congress has not proposed stoning Fannie Mae or sending AIG directors to the bottom of the Potomac. But it must be warming to the idea.

"Congress is looking for heads to cut off," says the French press.

One member of Congress - Senator Grassley - retreated from his call for AIG executives to commit suicide. It would be all right with him if they just showed a little contrition, he says now.

But all over the world - and especially in Washington DC - the mobs are out in the streets with liquor on their breath and ropes in their hands.

The proximate cause of this anger is the bonuses paid out by AIG - after the company got a taxpayer bailout of $170 billion. According to the New York Attorney General, 73 AIG execs got $1 million + bonus checks.
"Livid Democrats demand AIG return bailout bonuses," says a headline in today's financial press.

We hope you realize, dear reader, that all of this, of course, is just a cynical sideshow. It's a distraction...a self-indulgent tantrum; the real story lies elsewhere...which we'll come to in a minute.

First, the rally is still going on. Stocks have recovered about 10% of their losses so far. And yesterday, the Dow rose another 178 points.

Don't forget, this is not a new bull market. It is a bear trap...a rebound in an on-going bear market. After this phase of anger passes...people will probably feel that the worst is behind us. They'll squint and see a "light at the end of the tunnel." Later on, they'll realize that the light is an on-coming freight train!

Yesterday's up-move was traced to a surprising report from the housing industry.

"Housing starts unexpectedly increase on condos," explains a Bloomberg headline.

And today, the Fed meets. Analysts are betting that the Fed will begin more "massive buying" of assets - especially U.S. Treasury bonds - in order to get more money into the system.

All the news is not favorable, of course. Auto loan delinquency rates are running 9% ahead of last year. Thornburg Mortgage is apparently headed towards Chapter 11. Caterpillar says it will lay off more than 2,000 workers; less construction means less need for heavy equipment. And AMEX says even its best customers are falling behind on their bills.

But let's go back to into the theatre and take our seats: The politicians give money to their pet projects...and then pretend to be outraged when the companies use it to pay their bills. Among their bills were billions in payments to other companies -notably Goldman Sachs, former employer and major source of wealth for the man who designed the bailout, Hank Paulson - and thousands of employment contracts with AIG's salarymen.

What did the feds think when they gave AIG the money? That they were donating to charity?

No, dear reader...the fix was in. And it's still in. And while the press and politicians huff about a few million in bonuses to AIG's hacks, billions more is being paid out to AIG's counterparties.

It's not only a waste of money, says our old friend Jim Rogers, the bailouts actually retard a recovery. How so? In the obvious way. Like any kind of subsidy or welfare payment, they invite people to keep doing what they've been doing - no matter how unproductive it is. Instead of letting AIG and its bosses and counterparties go broke, the feds give the whole brain-dead system a transfusion of taxpayers' money. So the executives don't have to go out and find other work. And AIG can continue peddling its mortgage insurance. And its counterparties, too, are protected from their mistakes.

Of course, the government doesn't want to raise taxes in order to keep these incompetents in business, so it bleeds the money from the next generation of taxpayers - who aren't around to protest. Instead of letting the debt be reduced by the natural process of deflationary default, in other words, the government adds more debt.

Already, as we pointed out yesterday, there's about $20 trillion worth of debt debris that must be brushed aside before the economy can begin rebuilding on a solid foundation. At the present rate of savings, it will take about 45 years to do the job. Which suggests to us that it ain't gonna happen. We don't think the feds can sit still that long. And they're not sitting still now. In fact, they're adding to the public debt faster than the private debt is getting paid down.

By our calculations, the private economy is paying off about $420 billion - net - per year. (Just based on higher rates of saving...not counting write-downs, and defaults.) But the federal deficit is expected to run to $2 trillion! In other words, the feds are adding debt 4 times faster than the private sector is paying it down.

This is not a formula for putting this problem behind us. Instead, it just pushes it ahead.

The Feds didn't think, that's our problem and now they are playing CYA time, because a bucnch of them are neck deep in this mess namely, Frank and Dodd.

I've sharpened the tines on my pitchfork. :nuts:

CB

 

[Show-me]

The Feds didn't think, that's our problem and now they are playing CYA time, because a bucnch of them are neck deep in this mess namely, Frank and Dodd.

I've sharpened the tines on my pitchfork. :nuts:

CB

The Feds did think and that makes it worse. Back in November when everyone wrote into the politicians the peoples will was known in a very loud and distinct way. NO BAIL OUT! The politicians ignored that and did what THEY wanted to do instead of the will of the people. They are owned by the same people that got us in this mess and all they are doing now is spinning and posturing to save some face.

Next election vote them all out! It doesn't matter who the other person is running, vote the incumbent out. Send a clear message that if you blow off the will of the people you will be replaced.

 

[CountryBoy]

The Feds did think and that makes it worse. Back in November when everyone wrote into the politicians the peoples will was known in a very loud and distinct way. NO BAIL OUT! The politicians ignored that and did what THEY wanted to do instead of the will of the people. They are owned by the same people that got us in this mess and all they are doing now is spinning and posturing to save some face.

Next election vote them all out! It doesn't matter who the other person is running, vote the incumbent out. Send a clear message that if you blow off the will of the people you will be replaced.

Yep Show me,

Every poll showed the people didn't want the bailouts, but the pols had already been signed sealed and delivered to the AIG's and Big Finance. I would hope that folks would vote out the incumbent, but I have no faith in the American people even remembering this, come next election.

Mark my words, BHO/teleprompter will have the market manipulated, such that all his boy's butts will be covered and folks will be getting those welfare checks and the market will be up, so nothing will change.

The only change we can hope for is term limits. Heck we only allow a Pres 2 limits, the same should be sufficient for Congress.

CB

 

[Guest2]

Yep Show me,

Every poll showed the people didn't want the bailouts, but the pols had already been signed sealed and delivered to the AIG's and Big Finance. I would hope that folks would vote out the incumbent, but I have no faith in the American people even remembering this, come next election.

Mark my words, BHO/teleprompter will have the market manipulated, such that all his boy's butts will be covered and folks will be getting those welfare checks and the market will be up, so nothing will change.

The only change we can hope for is term limits. Heck we only allow a Pres 2 limits, the same should be sufficient for Congress.

CB

And the TAX they beat their chest's over and passed yesterday will not
stand up in court ! Just another Dog & Pony Show ! The politicians gave
out our money without preperation, enough knowledge, clarity etc.....
CYA,,,, I think so ! The Fox is watch'n the Hen House ! (Daddy Reference)

Sorry if off topic abit, I had to write it somewhere

 

[CountryBoy]

And the TAX they beat their chest's over and passed yesterday will not
stand up in court ! Just another Dog & Pony Show ! The politicians gave
out our money without preperation, enough knowledge, clarity etc.....
CYA,,,, I think so ! The Fox is watch'n the Hen House ! (Daddy Reference)

Sorry if off topic abit, I had to write it somewhere

My feelings exactly about what they did yesterday on the Taxes, what a bunch of hooey (for the more genteel ). Congress got us into this mess and aren't man enough to fess up.

And I'm tired of BHO and congress acting like a fly on a horse turd, by trying to do everything at once, that's why no one read that Stimulus/welfare package that is going to come back and haunt us for decades. Congress snuck some much unknown stuff into it. Do one thing at a time and do it right. They haven't done anything right yet, except CYA and we all know they are doing that and not very well either. :laugh:

We need to investigate Congress like they are investigating everyone, they are just as guilty.

CB

 

[Thunderhorse]

Hell CB, lets just fire 'em:laugh:

http://www.firecongress.org/

 

[wv-girl]

My feelings exactly about what they did yesterday on the Taxes, what a bunch of hooey (for the more genteel ). Congress got us into this mess and aren't man enough to fess up.

And I'm tired of BHO and congress acting like a fly on a horse turd, by trying to do everything at once, that's why no one read that Stimulus/welfare package that is going to come back and haunt us for decades. Congress snuck some much unknown stuff into it. Do one thing at a time and do it right. They haven't done anything right yet, except CYA and we all know they are doing that and not very well either. :laugh:

We need to investigate Congress like they are investigating everyone, they are just as guilty.

CB

Hi CB,
This is the worst yet. I am hoping that Congress puts a stop to this unconstitutional act. Apparently no one in the house knows(or cares) what is in the constitution, they have lost their minds--what little they do have. I am NOT for the bailouts of any kind, but this action is very threatening to all of us. Where will it stop..the bailouts and the idiotesy(sp) of it all. If all of this crap has been done in just three months..I hate to think what four years from now will be like. God help us all.

 

[CountryBoy]

Hi CB,
This is the worst yet. I am hoping that Congress puts a stop to this unconstitutional act. Apparently no one in the house knows(or cares) what is in the constitution, they have lost their minds--what little they do have. I am NOT for the bailouts of any kind, but this action is very threatening to all of us. Where will it stop..the bailouts and the idiotesy(sp) of it all. If all of this crap has been done in just three months..I hate to think what four years from now will be like. God help us all.

Yeah wv-girl,

They've done this much financial damage and made these many attacks against the constitution in just 3 months, what's this country going to look like in 4 years. :worried: Hopefully in 2010, saner heads will be elected and will regain control of the house. Yes they have lost their minds, because they know how guilty they are in starting this whole mess.

We haven't since the worse. Just wait until bHo's taxes kick in, (for those that believe his $250K crap, we'll just call it massive inflation and the cost of everything will go up) along with the massive inflation almost all the economists are calling for, then we'll definately know what pain is.

One of the UK papers, I believe the Telegraph, had an article how we are becoming the laughing stock of the world because of the chaos of our current administration and the way we are handling the financial situation.

But they also liked it ( I believe it was the same article, maybe not) because we are chasing more of our business's to other countries because of our treatment of business' and the arbritary way we are inforcing the laws and the punitive taxing. Heck, in a couple of years the libs will be blaming Bush for the jobs that have been lost to overseas. They don't have the intellect to grasp, that if you have the 2nd highest corporate tax rate in the industrialized world, well jobs are going elswhere.

All us little folks can do is save as much as possible, so you may have something left, after bHo steals your money to give to his unproductive pals. I believe, thoug I'll continue to invest in our ROTH's and TSP (5%), that we need to invest in tangible items, that can't be taxed so to speak. Precisous metals, off line guns, stuff like that. Somewhere I have the addy of a Canadian gold company that will not report your gold purchases, but I haven't investigated that any further.

We're really handcuffed on our flexibility to diversify our saving to any great degree, but maybe the sooner and younger folks do, the better off they'll be.

It's just something that is on it's way and all we can do is study and prepare the best we can for it. Most of us, will probably have to put off retirement (me included) for another year or 2 to offset the blatant redistribution of wealth, bHo's word not mine. Hey that sounds so much like socialism. :laugh:

Well it's getting daylight and I got a big hickory to take out my frustrations on. Nothing like hard physical labor to take your mind off the chaos in DC.

CB

 

[budnipper1]

15 AIG CROOKS RETURNING THEIR BONUSES TO GET OFF CUOMO'S HIT-LIST

http://www.reuters.com/article/newsOne/idUSN2344988120090324
Fifteen of 20 American International Group leading bonus recipients have agreed to give them back in full, said New York's top legal officer who is probing into $165 million in executive pay at the troubled company bailed out by the U.S. government.

New York Attorney General Andrew Cuomo told reporters on a conference call on Monday that he hopes to recoup $80 million of bonus payments made to Americans, or about half of the $165 million paid by the giant insurer on March 15.

An AIG spokeswoman said late Monday a "handful" of senior executives have resigned from its Financial Products unit, which Cuomo blamed last week for bringing the insurer to the brink of collapse. It was unclear if any of the executives with the top bonuses had resigned.

Nine of the 10 executives who received top bonuses have agreed to return them, Cuomo said. He said about $80 million was paid to Americans, the rest outside of U.S. jurisdiction.

Cuomo has said he wanted to make public the names and details of bonus recipients, but he was assessing security and privacy of individuals following death threats against some employees.

"Our legal theory is fraudulent conveyance, and we think it is a powerful legal theory," Cuomo told reporters. "But if a person returns the money I don't/sic-?-think/ it is in the public interest to name them."

He added that those people will see their name disappear from his list permanently.

 

[budnipper1]

Dear A.I.G., I Quit!

-------------------------------
Closing 6 paragraphs of Jake DeSantis' letter of resignation to AIG's CEO Liddy:

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


A version of this article appeared in print on March 25, 2009, on page A29 of the New York edition.
http://www.nytimes.com/2009/03/25/opinion/25desantis.html?_r=1&pagewanted=2
​

 

[CountryBoy]

Dear A.I.G., I Quit!

-------------------------------
Closing 6 paragraphs of Jake DeSantis' letter of resignation to AIG's CEO Liddy:

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


A version of this article appeared in print on March 25, 2009, on page A29 of the New York edition.
http://www.nytimes.com/2009/03/25/opinion/25desantis.html?_r=1&pagewanted=2
​

Hey Bud,

Ya beat me to it. :laugh: Mods please remove my "Take this Job and Shove
it".

CB

 

[ChemEng]

Dear A.I.G., I Quit!

You need to read the whole letter to fully appreciate it. The guy that quit was working for a $1 salary. This may blow up to Joe the Plumber proportions because now there is a human face with human concerns to the issue the Congress has walked all over.

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,
J
ake DeSantis​

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[budnipper1]

You need to read the whole letter to fully appreciate it. The guy that quit was working for a $1 salary. This may blow up to Joe the Plumber proportions because now there is a human face with human concerns to the issue the Congress has walked all over.
[/indent]

For once, I tend to agree with you.


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[ChemEng]

For once, I tend to agree with you.

Bud,

I'm glad that you are finally embracing the spirit of change this administration has promised (even if you did hedge it a bit with the word "tend").

For what little its worth, one of my favorite Patton quotes is "If everyone is thinking alike, then somebody isn't thinking." We may not always agree. But on those rare occassions when the planets align, it can be a pretty cool thing.