K&R if you think AIG should be liquidated

And if you're not that angry, just read this article:

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/1

I suggest contacting your Senator, Representative, and especially the White House.

Regulators have unlimited authority to abolish a company like AIG, which means that Obama does. Enough of this "too big to fail" bullshit. AIG is a criminal organization, never mind what it's supposed to be. It's not big to fail, it's too big to support.

I say liquidate it, take its assets, prosecute and sue its executives and the guilty counter-parties to get as much of our tax money back as possible. Track down every one of them who knowingly profited from AIG's schemes. At the very least, break it up, and break up all of those "too big to fail" companies too. If they're too big to fail, they are too big.

There are far better reasons to shut down AIG then there were to shut down Arthur Anderson-- Enron's accountants.

Retention bonuses? How about unretaining them.

Shut 'em down. Indict, convict, imprison.

IT'S NOT THE BONUSES.

Ok, the bonuses are bad; but they're the LEAST of the problems with what's going on at AIG.

AIG is insolvent; it lacks assets or income sufficient to pay off its obligations to existing creditors.

When you or I get into this situation, if we fail to file bankruptcy, our creditors can force us into it, to provide for an orderly liquidation of our assets and debts. We have to fully disclose all of both, our assets are sold on terms reasonable under current conditions, and the proceeds are divided fairly among our creditors.

This is what should happen to AIG.

Instead, AIG is NOT in bankruptcy, because its creditors are hoping us taxpayers will throw enough bailout money into AIG so its creditors won't have to suffer any losses -- we'll be the losers, instead of them.

So, that's where our tax money's going: to save AIG's existing creditors from the consequences of their mistake in acquiring debt obligations of AIG.

Now, if you or I were insolvent, and we got some chump to give us money so we could use it to pay off our existing creditors, that would probably constitute some kind of fraudulent transfer, and the chump could probably get her/his money back -- IF she or he could find it. What are the odds, you think, we'll ever get our money back from AIG's creditors?

AIG is just a conduit. The real robbers are its creditors, Goldman Sachs -- surprise! -- being one of the biggest.

As usual, Elliott Spitzer's nailing it:

The Real AIG Scandal
It's not the bonuses. It's that AIG's counterparties are getting paid back in full.
By Eliot Spitzer Posted Tuesday, March 17, 2009, at 10:41 AM ET

Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?

For the answer to this question, we need to go back to the very first decision to bail out AIG, made, we are told, by then-Treasury Secretary Henry Paulson, then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman Ben Bernanke last fall. Post-Lehman's collapse, they feared a systemic failure could be triggered by AIG's inability to pay the counterparties to all the sophisticated instruments AIG had sold. And who were AIG's trading partners? No shock here: Goldman, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays, and on it goes. So now we know for sure what we already surmised: The AIG bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already.

It all appears, once again, to be the same insiders protecting themselves against sharing the pain and risk of their own bad adventure. The payments to AIG's counterparties are justified with an appeal to the sanctity of contract. If AIG's contracts turned out to be shaky, the theory goes, then the whole edifice of the financial system would collapse.

But wait a moment, aren't we in the midst of reopening contracts all over the place to share the burden of this crisis? From raising taxes—income taxes to sales taxes—to properly reopening labor contracts, we are all being asked to pitch in and carry our share of the burden. Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won't be laid off. Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash? Haven't we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn't they have accepted a discount, and couldn't they have agreed to certain conditions before the AIG dollars—that is, our dollars—flowed?

More at http://www.slate.com/id/2213942/ ; see also http://www.newsday.com/news/local/state/ny-stspit0320,0,7580345.story .

The bonuses are just a diversion.

The BONUSES clearly ILLUSTRATE for all to see that these CRIMINALS JUST DON'T GET IT!!!

WE can "walk and chew gum" at the same time - get rid of the company, and we STOP these BONUSES, and OUTRAGEOUS SALARIES USING OUR MONEY!!!

We'd also impact the ability for it to recoup any of our investment, or our obligations globally for a situation that's our fault.

The one thing I don't like about our lib community soemtimes is our passion bordering on carelessness. Six weeks in and we've been handed an unpopular situation that the Gramms pushed, let's concentrate on raising awareness of what we need to change before we just blow things up.

We will change laws so another AIG cannot happen again.

This economic crisis isn't about how long Obama and the Democrats have been in office.

It will only become about Obama if he and Geithner continue to treat the 'AIG debacle as "one where middle-class taxpayers cover the bets of billionaires."

Unfortunately, this is an immediate crisis that cannot wait for raising awareness so that "AIG cannot happen again." AIG is happening now and if we don't blow-up this sinkhole, then we are all going to sink down so deep that it will be generations before we're ever able to get back on our feet again.

So, you propose

"All in the valley of Death
Rode the six hundred." (or Six Weeks) ??

The Charge of the LightBrigade was magnificent , memorable, heroic. And bloody stupid, by unanimous opinion.

I am old, I prefer to get it right , not "get it hot". And you, when your anger cools, wish what for the long term?

Goldman Sachs is the number one beneficiary of all the AIG money. And yet Geithner's chief of staff is an AIG lobbyist, the whole TARP concept was created by Paulson from Goldman, and the overseers of the TARP funds: from Goldman.
geithner needs to be OUT of government. The conflict of interest is phenomenal. And billions are going to Goldman, so the conflict of interest has already [paid off big time.

Remember Cheney and Halliburton. Rich men get themselves into positions of power and then enrich their friends and themselves. I had hoped Obama would not hire these kinds of people.

We merely need to enforce them. These guys got caught red handed and they get bonuses. They broke plenty of laws and now those laws need to be enforced so the next guy who might think about it knows that he won't get away with it.

We must return regulation to where these shenanigans are next to impossible to pull off. We need regulation and enforcement and we need it NOW.

The laws put on the books since 1993, and especially after 2001, and the ones taken off the books, also caused this to happen. Hell, a mere 7 years after they changed the laws to the pre-Depression state, the change caused another Depression (possibly).

and move to economic democracy --- democratic socialism.

Under control of the people --- not corporations.

Corporations have to be remodelled to serve our needs ---

not our fantasies and not destroy the planet or animal-live ---

Yhe PRECEDENT is set with FDR and the New Deal -- we aren't reinventing the wheel!

Even with Single Payer Health Care . . . all we have to do is life age restrictions

from Medicare!

As pointed out elsewhere in this thread, what they were doing was almost (if not entirely) legal. So, bust them for obeying laws, even if they used them for shameful purposes?

Why not determine what those laws really are and how they are different from what we assumed? Then scream bloody murder while we hold to account those forces and people who made things that way? Then we change them and make sure this never happens again.

We have held the Third Reich, and its goals, in eternal disrepute, as a world community, for what they brought about. Is it so strange that we should have the same sort of disdain and disrepute for an unfettered Capitalism that has brought us to where we are? Should we not either fetter or abolish it?

There may have been insider trading, fraud, breach of fiduciary duty. Breach of fiduciary duty is not a criminal act, but shareholders may have some kinds of causes of action to bring to cover their losses.

Not only did the Bush administration refuse to regulate these companies and refuse to alert the nation to the growing problems in the securities, banking and insurance sectors, but they systematically investigated and went after the lawyers who really understand prosecuting and suing people in the financial sector. Spitzer is just one example.

Several of the nation's most effective plaintiff's attorneys have been prosecuted for alleged crimes far less egregious than the wrongdoing we have seen in these companies. I'm sorry, but names do not come to my mind at this moment.

We were just supposed to stabilize it so we could sell off pieces and take the Company apart.

Can't they just break it up first, and declare the bad parts bankrupt?

Then we have a variety of rememdies, trying to keep them afloat if they're able.

Here's what the Fed is doing out of our sight:



http://www.rollingstone.com/politics/story/26793903/the_big_takeover/7

This is what's hidden from the taxpayers. It's trillions of dollars, not exactly from the taxpayer, but we'll pay for it eventually probably through hyperinflation, or something just as awful. We can't afford this.

homeowners by regotiating mortagages and tax the upper percentage by limiting itemized deductions. Eyes off the prize.

Though AIGFP did a lot of damage.

They're in business to make money. Instead, they passed it off to the taxpayers to eat.

First rule of holes: When you're trying to get out of a hole, stop digging.

Have the government insure them in the interim. Or you could actually have the government back the policies and give AIG policy holders a fixed amount of time to find another insurer. Or break it up into smaller companies, and kill off the guilty division. Less practically, IMHO, the government could permanently take over the policies. In other words, there's plenty of ways to solve the problem in the point that you've raised. Many options. But there's no way AIG should exist after this. The executives of of AIG were at least criminally negligent.

Your suggestion that it's just "our fault" and we should take our medicine is simply offensive. There were definite criminals here, definitely collaborators in the government, and definitely people who were just negligent or plain stupid due to ideology.

Given the fact that the liberals were totally out of power and maligned, there wasn't a damn thing we could do about it. As for the whole country's guilt, no-- first the people of the country as a whole were victims of the crime. They had no criminal motivation. They a right to expect that people be honest and not defraud (though they should check on it-- but that's a matter of practicality). Even if not, the way a group entity like a country repents its guilt is to remove the guilty leadership and put them on trial. That's what was done in Nuremberg. It shows that we have renounced that leadership and its principles. That is what the world expects-- and ventures like AIG have damaged or wrecked the world economy. People are probably going to starve because of this. The guilty corporate entities should be broken up. The responsible executives must be tried. Not only is it just, but it's the only way the US can gain a little credibility in the world.

We don't really have to "change the rules." Regulators have the absolute right to close down AIG. That's a fact. They could have closed AIG, or it's guilty division, as soon as they got wind of this. The fact is, due to the Bush Administration and general Republican policy of de-regulation, they weren't even looking. If not, the anti-trust laws are still on the books as far as I know. They have hardly been used since Reagan, but they are there.

We have securities laws. Congress should have been watching this. Yet Congress was caught by surprise when Paulson demanded the passage of his original TARP proposal.

Let's don't forget that Obama needs first and foremost to prosecute the crimes of the members of the Bush administration.

Don't take that off the table.

Have you ever had mold in your refrigerator? You have to get rid of the sources of the mold. You can't just toss out yesterday's leftover sandwich and leave the moldy spaghetti from last year.

This laissez-faire attitude toward corruption, greed and crime in high places got started under Reagan, the first Bush administration and, most recently, under GWB. Let's get rid of the old mold in our refrigerator. Let's take out the lasagna that we put in there 8 years ago. I know it looks like soft cheese, but if we leave it in place, everything we put in the refrigerator will spoil. There will be no trust.

and I know I can't get as good a refrigerator in today's stores, but if the mold starts invading the whole kitchen and then the house, that fridge is going to be tossed. It won't be my decision. It won't be what I would have wanted, but it very well could happen.

We hired Obama to clean house. He needs to clean up the mold. You can't have a party until you clean up. The economy will not improve as long as Americans feel that the injustice of the Bush administration has gone undisclosed an unpunished. It's subtle, even subconscious, but we need to feel safe from the corruption and crime. We won't really trust each other until the mess is cleaned up.

Much healing would ensue - here and abroad. If the goal is international socialism (and I realize for many it is not), but even if it is for some, we don't get there by letting criminals like Bush run rampant.

needs to be done YESTERDAY. Nationalize and eliminate the group that gambles on derivatives. Fire each and every one of the bastards that gambled away the company's money THAT THEY WERE SUPPOSED TO KEEP TO BACK UP THEIR INSURERS. AIG is toxic and action is needed immediately. Nationalize today.

So separate the Legitimate business aspect from the illegitimate aspect (Which is a lot more than what would be allowed to any small business person, were part of his/her business responsible for a major lawsuit while another part was non-complicit.)


Put the whole company into receivorship and then bail out ONLY the legit section. But the Bailout can only occur after we have firm figures. Right now I feel like we are transfusing a hemorrhaging patient before applying the tourniquet. (Any first year nursing student will tell you no matter how much blood is pumped in, that patient will die untill the blood flow is stopped. And since it is the Average Person on Main Street whose blood is being used for the transfusion, we have a right to demand taht the situation be checked before we supply more blood.)

and all the major banks and credit unions should be nationalized. Fuck 'em all.

If they have complete books, without shadow shit, and can back up their claims, leave them alone. But if they are playing games on reporting problems, or are refusing to release information -- take them OUT.

Maybe we need to overhaul that first of all. People should be able to see every piece of financial info on a company, exactly what its assets are down to the specific holding. Examine every contract so you can understand vulnerabilities.

No more withholding info of any kind for any public company.

The government might become the de facto owner of the finance industry anyway.

It would be a real hard sell. Lots of faux populist outrage rhetoric will still fly around for the cameras, though.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=61119&mesg_id=61119

Remember those contributions are supposed to help them get re-elected. If they're doing the opposite, for many Dems, the deal will be off. And remember, the quid pro quo is usually just implied. There's no contract involved.

you state: "Regulators have unlimited authority to abolish a company like AIG, which means that Obama does. Enough of this "too big to fail" bullshit."

This is not strictly true. Consider another historical precedent that unexpectedly swept upon the US and which Harry S Truman tried to contend. Truman attempted to nationalize the steel companies, by edict, and failed. It was, simply, not within his Constitutional powers.

Obama faces the same problem. This AIG crisis swept upon him, brought by corporate malice and skullduggery, and he was forced to react with his best judgment as to what to do, and with very little advice other than his own counsel. Such is the case when one faces off against the Military-Industrial-(Financial) Complex. And AIG is as near to the heart of the Beast as were the steel companies.

As in the attempt to nationalize steel by Truman, an admirable solution was, unfortunately, not within the powers of the President. And back then, we as a nation decided it was better to pass up a good idea than to give our good President the powers of as Dictator.

It is no different when Obama or advisors (you and I, perhaps), have a good idea (liquidate AIG), but refrain from the attempt, simply because it would cause the US to start ceding what amount to dictatorial powers to our President.

The problem is that once Obama is no longer President, the powers which we cede to him remain vested in the next President. So, unless we are anxious for someone like Jeb Bush (or Neil:scared: ) to inherit those same powers, we should proceed with what gives us a good long term solution instead of immediate emotionally-gratifying fix which might sink everyone at a later time.

Presidentially-directed dissolution of a private company would be an unprecedented action. When a solution is embarked upon, let us all pray we get it right and, afterward, install proper laws to deal with this new paradigm if and when it recurs.

The Military-Industrial-Financial Complex will be the greatest, largest and most dangerous foe the American Public has ever encountered. We have to do this thing well. We have no choice.

And that's the precedent to this. The government (and the judiciary) doesn't treat banking, finance and insurance like railroads or steel, nor should it. Such businesses are inherently unstable, and if they screw up, the whole country falls into poverty.

Obama, I believe, already has the power to pull AIG's license and put it out of business on the spot. He could definitely do that with the banks, which gives him, yes, dictatorial powers over them. Congress has already given him that power, by law. The executive branch is supposed to regulate such things, but we know what the previous administration did.

He could also bring an anti-trust suit. AIG doesn't want to go there. It would allow anybody hurt by its monopoly practices to sue for treble damages.

The government already has controlling interests in the bigger banks and (possibly?) AIG. So it has already nationalized finance. The nationalization is already here. Now it's a matter of the government getting out of the it.

The FSLIC was the lead agency and Congress had to act in order for the crisis to be resolved. It was certainly not Reagan or JHWBush who led the way.

How do I know? I was right in the middle of it, dealing with "toxic assets" of the S&Ls. The present crisis is the result of the abolition of Glass-Steagall and the revision of bankruptcy laws in 2005.

To your points above.

"Obama, I believe, already has the power to pull AIG's license"

No. He does not. the regulation of activities involving insurance, as defined by current Federal Code, is left entirely to the jurisdiction of the several states. Obama has no direct power to even make them cease and desist.

Congress has already given him that power, by law

cite that law in detail, please. Show how the implementation can be done by Obama without the concurrence of both Congress and the Federal Reserve. Though I may not be happy about it being that way, IMHO, it beats ceding dictatorial powers to a president who could be succeeded by a member of the Bush clan.

The executive branch is supposed to regulate such things

The executive, either well or poorly, does what it a) wishes to and b) what it can. However, laws overseeing what regulators are allowed, under law, to do shifted hugely since the Bush-Clinton-Bush administrations. the Congress changed the laws. To fix things they must be changed back. And we are nation of laws, do you not agree?

He could also bring an anti-trust suit.

On what grounds? AIG is clearly not a monopoly and the capitalist cabal causing the trouble is doing so outside of trusts. AIG does not want to go there, and neither do the dozens of enablers and cohorts who status as such prevent AIG from qualifying under trust provisions. There may a path there but, if so, it must be proven that the current arrangements between the "partners" is, de facto, an illegal trust operation. If proven, I hope all would get treble damages.

The government already has controlling interests in the bigger banks and (possibly?) AIG.

No. The Government owns preferred stock in these companies. Preferred stock is not voting stock and is not involved in ownership or management decisions. Preferred stock is a protected class of stock that receives preferential treatment in the event of liquidation.In my opinion, that is what should happen. Liquidation.

So it has already nationalized finance

No, it has not. Perhaps, as I might, you are arguing that it should be nationalized??

Actually there were several very harmful laws and de-regulations that caused this, starting under the Clinton administration, but there was also a dead set refusal of oversight agencies, stacked with Bush appointees and their friends, to do any oversight.




I'm thinking maybe you're right about insurance companies, and I was thinking of banking. The division of AIG in question, AIGFP was not operating as an insurance company, that wasn't its purpose, and it was given a choice of what agency regulates it, and chose to be regulated by the Office of Thrift Supervision. It was given that choice, as it turned out, because AIG itself own an S&L-- in Delaware.

AIG IS BANKRUPT - NOW - TODAY! Let it GO UNDER!!!

THAT IS CURRENT LAW!!! Us giving them OUR MONEY to literally SURVIVE is the PROBLEM, and it's AGAINST the LAW!!!

WE damand that they EAT their RISKS and GO BANKRUPT!!!

STOP REWARDING FAILURE WITH OUR MONEY!!!

regardless of its impact on society.

not a plan i hope anyone in charge is even thinking of. This company going under right now would send the whole globe into a total financial meltdown even worse than what we are seeing now. You couldn't give two shits about that though as long as these 70 bad guys get whats coming to them.


Foolish and short sighted in the extreme.

I agree with "too big to fail is too big, period," but demolishing it (including its many healthy divisions) would more or less demolish the financial industry, which would more or less demolish the entire economy.

In the Great Depression, it took till 1933 for it to bottom out. Let's see, recession first hit in December 2007. So, we might have to wait as long as 2011 to know just how bad it is.

that the patient was going to die anyway.

How much money are we going to pour into the monster? Those bonds we're selling to save it are going to kill us, and the money we're printing for it will eventually have to be paid through inflation or dollar devaluation.

I really think we're screwing ourselves much more trying to save it, especially when the liabilities of its toxic assets have not been determined.

Separately, though??

Is it so different from the Federal Flood Insurance Plan? Or the FDIC?

To cases, allow Federal entities to take over the business contracts of AIG, after mitigation by AIG's bankruptcy, and then to proceed to run those companies for the Public Weal. Forever, if the public wants it that way and if the Fed can handle it.

To the question of whether we wish our government to "socialize and go into the business of business", I would say the immediate problem is whether we wish the government to run those current businesses (AIG, etc.) or whether we would rather see the current management blunder on with the Federal Safety Net always in mind and underneath them.

If we have only those two choices (anyone got an alternative?????) then I know what way I do not wish to see followed. the losers have lost. Be done with them.

genpop for the whole scummy crew

Your statement "AIG is a criminal organization, never mind what it's supposed to be." is totally true. It is as obvious to any thinking person as a sun rising in the East. Yet our national system of jurisprudence is such that they are innocent of that charge until it is proven!

So, what to do?

I suggest that we as citizens and a Nation, first of all, decide what rules we will apply and abide by as a nation. I suggest that this egregious corporate behavior stretches one's thoughts about what is an appropriate response. On the other hand, we have found ourselves enmeshed in Iraq and Afghanistan in response to atrocities committed (by whomever) on 9-11. I propose that if we had first decided what and who we are as a Nation, we would not have the carryover of Guantanamo, torture and all of the other over-reacting we engaged in.

So, what for AIG? Perhaps, assume them innocent of all charges (as we did the Third Reich warriors) until our totally committed and dedicated hunt for all these financial malefactors yields them prosecuted to the fullest in our docks of justice.

Meantime, we should look at all that we all see and dislike and make it stop now !! And Obama and others could be helpful in defining this necessary degree of clear moral vision and judgment. What we should stop doing is hoping that Obama (like Truman) could snap his fingers and solve our problems. It is tougher than that, and we will need to help Obama and our allies rather than simply demanding some "satisfaction guaranteed" responses from his supporters.

A good first start would be the immediate of a law which would, in effect, re-institute some form of Glass-Steagall Act, prohibiting banking and insurance commingling entities. When one wishes to stop all the illegitimate gambling going on, shutting down the casinos is a good start. Let's start by taking AIG and all the others, split insuring from banking, and close down the derivative arms of the betting business.

gets me and I know it's hard to digest, but, for those that still 'don't get it.' THE DERIVATIVES MARKET AND ALL OF THE FINANCIAL INSTRUMENTS THEREIN, ARE AND WERE LEGAL. LEGAL. LEGAL.

There it was simply a criminal conspiracy, where people bought in as insurers fully knowing that they weren't going to ever pay any claims. It was done only so AIGFP could say the CDO's were insured. Fraud. And that's just a small part of the illegal shenanigans you could allege against AIGFP.

regardless of claims or no claims. CDS and Hedge Funds, all legal and everybody got paid until people stopped paying their bills and the CDOs dried up = no money, ratings dropped from AAA to AA to A and that's when they went to Washington. ALL LEGAL.

I bet people go to prison for this. Just because trade in the CDS's is legal doesn't mean that there wasn't a lot of illegal activity in their tranching and assembly. There was such a drive to put them together, and that's part of what drove the sub-prime market. Even if CDS's are legal, some of the "tranches" hidden in them will be found to break other laws-- and they're a good place to hide things like downright fraud, or money laundering.

Now that's just conjecture on my part. But I bet that's the way it will play out.

And that is the problem. Some of us even left this business when we saw what was happening. The laws stunk, promoted vice, treachery and mal and misfeasance. Yet the owners tried only to game the laws an, in particular, had their "free market" buddies legislate more of the same from K Street.

The answer is simple. All of those of us who said, some twenty years back, that "This is no way to run a railroad. You will wreck the whole economy with oversight like this". The Reaganites (like Alan Greenspan) said "You'll see. The free market is always right. It will be better, just wait."

Well, we have waited. The free marketeers were wrong. Greenspan, and others, were wrong to imply that the fat cats would not soil their own nests in the pursuit of profits. They did just that as their financial gluttony knew no bounds. Now they are wanting to leave those soiled nests or have them rehabbed by the general public. IMHO, they deserve eternal derision if they cannot be jailed for what they did.

A good first start would be the immediate of a law which would, in effect, re-institute some form of Glass-Steagall Act, prohibiting banking and insurance commingling entities.~ gallowglas

And, how about adding 'co-mingling banking with accounting and investing practices'. Wasn't it illegal for banks to use depositors' money for investment purposes in the past?

Phil Gramm should go down in history as one of the primary causes of this financial terrorism that has brought this country to this disastrous point.

I have a question, trying to understand this mess. You seem knowledegable about it, so I will direct my question to you, Galloglas.

If the money AIG is receiving is mostly going to pay ITS debtors (Goldman Sachs, BOA et al), why can Congress not simply remove them as the middle-man, then deal directly with those Corps rather than allowing AIG to, in effect it seems, launder the tax-payers' money and hand it over, without telling Congress (the people) where it has gone? Didn't Paulson et al, refuse to tell Congress (and Bloomberg) where the money is going?

Wouldn't that give us a better opportunity to find out exactly what these Corps were up to as each held out their hands to receive the money directly from the people? And to expose any wrong-doing on their part?

As for AIG, why can't they be replaced by several smaller companies, hiring all new executives (surely this country has a few honest, capable people who could handle those jobs?

FOR SALE! Since we own 80% of the company now, with more dole-outs to come, we also should own the building. I bet they have plans to divide up the sale money in some clever way to keep that too. Thins is throwing money down a sink hole.


In my mind, too big to fail just does not cut it. It means too big to find out what the hell they are doing. How many other "too bigs" are we expected to handle?

But we have to be goddamned careful, so we don't bring down the entire fucking world economy and tons of pension and retirement plans.

Throw all the bums out, without the money and seize all their assets, treat them like drug dealers and pirates.

into receivership and broken up into small sections. Obviously AIG was not just too big to fail, it was also too big to manage. Companies so big that a section of the company can operate without proper oversight should be broken up.

The breaking up of AIG has to happen, but has to be done very carefully -- by people who care about helping the clients, not by people who mostly care about themselves and their own incomes.

If nothing else comes out of this mess I would like to see some more Madoff's go down. When I say 'go down' I mean take all their money, all their wife's money, all the money from any family member or friend connected to the scams, take all their property, vehicles, collectibles (and even the kitchen sink) and leave them to start from scratch when they get out of prison. We as a society need to get across to these thieves that just because you have accumulated large amounts of wealth through every legal and illegal trick you can come up with does not mean you are untouchable. If you are caught not only will you suffer but your family will suffer and anybody else you dragged into the plan will suffer.
I would even go as far as limiting what kind of positions they can take after they finish their sentences. They should never be in the position to manipulate this kind of stuff again, period!

The government should smash AIG, grind its name into dust, and ensure that the next 10,000 generations know that evil had a face and a name, and that was AIG.

I had thought that the government was considering moving in that direction with the proposed new regulatory agency, but either way it has to happen. In one day would be a disaster, but over the course of at least three or four months, piece by piece, it could be done (and ought to be.)

Fire the bastards, default on the insurance policies, let the chips fall where they may.

Let the US establish a national bank with modest requirements to allocate credit.

Too big to fail is too big to let live. Kill it.

As others have pointed out, just liquidating it would cause one hell of an economic calamity.

Nationalize it. Seize the company, fire all of the assclown executives and prosecute them for fraud.

Place the company into receivership, and have an army of forensic accountants pick through its books line by line. Triage its assets and liabilities - you'll have good assets and debts, you'll have stuff that needs help, and you'll have utter toxic trash that should just be written off.

Recapitalize AIG so it can keep up with its obligations, and the rest of the businesses and people out there counting on AIG don't get screwed.

Then split them up. Too big to fail is too big - spot on. Break AIG into a dozen pieces and sell each piece to the private sector.

Oh, and regulate the hell out of the entire financial and insurance industries. Bring back Glass-Steagall.

We own 79.9% of the company. We already put in a new CEO. The people currently working in the financial products division are not the ones that got us in this mess; they are working for an essentially bankrupt company trying to get it out of the mess.

You can't put AIG in a receivership; the law doesn't allow it. You either let it go bankrupt or you don't, and if you don't then its contracts are still valid.

All of this populist anger is making this thread sound more and more like a therapy session.

If the gov is going to pump trillions into failed companies, it can instead invest trillions in new companies and then sell them off as the economy improves.
We get better companies and a profit instead of the same old crooks and a black hole for our tax dollars.

If they die, I lose almost all of my retirement.

Sorry - but YOU took that RISK - WE should not be forced to pay for YOUR BAD INVESTMENTS!!!

I didn't ask for and NOBODY was saving MY ASS from MY bad Mendik Real Estate Investment back in the 80's and I lost MY retirement...

TOO BAD for you - you've still got Social Security...

I really could care less about YOUR BAD INVESTMENT DECSIONS...

YOU took the RISK. YOU alone stood to gain PLENTY, not ME, not US, if your investment decisions turned out to be good!!!

Would you have UNILATERALLY given me, and countless UNKNOWNS a share of THAT?!?!

Like I said - I could care less - it's too bad - for YOU...but YOU made your BED - LIE IN IT!!!

I can't believe all the IDIOTS on DU who have the balls to actually SUPPORT these assholes and their BONUSES FOR FAILURE!!!

You either care about people or you don't. I've never read a more cruel post on this forum. And for your information, this was a highly careful choice using one of the most experienced and trusted financial advisers.

There's something far more wrong than just the economy. People don't give a shit about each other.

May no longetr be an option,.

Each man woman and child now owes something like $ 25,000 to the government. Where will that money come from?

If there is much money left in the Social Security trust account, I think it will be raided to pay for the expensive Iraqi War and for the more expensive AIG/Goldman Sachs recovery Bailout funds.

journalism. I will forward this far and wide.

I think if I ever fly on a plane again, I will push that little curtain aside and remove a rich white boy from 1st class so I may have his seat. If he objects, I will point out to him that there are many more of my kind on board than his.

In fact, during the flight I would want to share my 1st class seat with others. We would all get a glass of champagne.

Bravo, Matt. I can't K and R enough.

BTW.....WASF.

Douse your torch and put your pitchfork away. The Financial Products division is only a small part of AIG. This mass hysteria over this company would be laughable if it wasn't scary.

:scared:

....what do you propose should then become of all the people who work for AIG? I'm not talking about the bonus recipients and top execs. I'm talking about the tens of thousands of "rank-and-file" employees. The file clerks and mail room staffs and claim clerks and receptionists and lunchroom employees. And my friend who finally found a job in IT in AIG's office in Bloomington, IL after being out of work for months. Who, exactly, benefits by putting another seventy or eighty thousand people out of work in an economy where jobs are already incredibly scarce and getting scarcer?

And what about all the others who depend on companies like AIG? Like the office supply stores and the local small businesses that service AIG's many offices all over like janitorial services and vending companies that service the soda and candy machines in break rooms. What about them?

It's all well and good to rage against "big corporations" as if they're inanimate objects, but big corporations are made up of PEOPLE, and the bigger the corporation, the more middle income working stiffs who are just trying to make a living and get by go down if the company goes under. Just once I'd like to see someone who's advocating putting that big, nasty corporation out of business offer at the same time a plan for what happens to all the "regular Joes and Janes" whose livelihoods would be snuffed out in the process.

You simply list all the (obvious) reasons in favor of letting AIG fail, while completely ignoring the systemic risk that could cause massive bank failures and plunge us into another depression. Any intellectually honest argument would look at the plusses and minuses of letting them fail and then somehow show that we would be better off despite the minuses. You just ignore the minuses completely. All of this feel-good ignorant populism doesn't actually help with anything (and at a large scale could hurt Obama's efforts to fix the economy).

that's bs made up by goldman. while their cdo underwriters buying crappy insurance worth 0 from AIG, their trading desk was shorting AIG stocks. they made money out of CDOs on the way up, made money out of financial shorts, and will steal from you and your children on the pretense that they would blow up if AIG is not saved. Look at where the AIG money is going - to Investment bank counterparties like goldman, now ask fed or sec to look at their trades over the last two years. they were shorting the shit out of the crap they were selling to others.

So a single trading partner (Goldman) was hedging its bets with AIG. So, therefore... all trading partners did the same, and therefore the vast majority of economists (many of them liberal) are all wrong when they analyze the massive systemic risk that would follow should AIG fail?

Forgive me if I don't take the word of a single DU poster over the word of economists emminantly more qualified. Aside from DU and other places where people vent, I wasn't even aware that the debate over the systemic risk question for AIG was really still an open question. Some might be liars and crooks, but that doesn't mean for one second that there still wouldn't be massive systemic risk should AIG fail. In fact, that makes it even more likely, since then they probably would have done their best to make it too big to fail before they collapsed.

they were hedged. goldman ceo himself said their aig exposure isn't a big deal. but hey who ever refused free money?

all aig trading partners knew fully well aig insurance means crap as aig financial products under cassano (read the rolling stones article - http://www.rollingstone.com/politics/story/26793903/the_big_takeover/) sold 560B CDS without any hedge. noone knew more than investment banks that if ever they needed that insurance payoff they would not get it because aig would go belly-up prior to that. because of phil gramm's bills (glass-seagull repeal and commodity modernization acts) aig never had to post any collateral when they sold 560B CDS and they never had even 10% of the cash to back up the cds if spreads ever increased and they had to mark-to-market (read this post from a credit market insider - http://www.acredittrader.com/?p=65).

so all aig trading partners hedged against counterparty risk, and if their risk management team failed to do so, they should go under. now the taxpayers will overpay for worst toxic crap on the books of the banks who will outbid others, under geithner's flawed plan, to artificially inflate the crap on their books, and taxpayers will fund them with uncollateralized loans. banks will take the new cash, hoard them, until they can take all assets on pennies for dollars when people foreclose their homes, sell whatever little stocks and bonds they have to buy food for their families. After that, next inflation cycle starts all over again and goldman starts predicting oil at 200$.

Tons of actual banks insured risky loans with AIG with credit default swaps. Why did they do this? Because this allowed them to have the lowest possible capital requirements (if they were not insured, the capital requirements would have been much higher). They weren't doing this to lower risk per se -- they were doing it just so they could leverage more with lower capital requirements (i.e. they were doing it to get around regulation). Most did not hedge against the risk of an AIG default (because they did not need to in order to lower capital requirements). This is the underlying problem -- if AIG goes bust, all the banks that insured loans through AIG now have to raise a lot of capital -- all at once! -- now that their assets are no longer insured. This is a recipe for massive bank failures.

The Government has lost control of the financial situation to the greedy, rich, and powerful. It is time to take back control of the engine that powers this country so that the people are in charge, not a select group of financial brokers operating in the shadows.

. . .if you're too big too fail, you're too big.

Break them up.
GAC

You remember? From the Python movie? Sick those old farts on AIG!

Ahoy! Avast! ATTACK!!!

all the CEOs of the AIG creditors, like Goldman Sachs? I think the country would finally be on the way to getting better if we did that. Then we need to throw every Republican that deregulated these systems so these mega-rich criminals could get away with their crimes, in other words the ENTIRE BUSH ADMINISTRATION.

:argh:

Except AIG has revealed the truth: they get their millions even if they are unsuccessful. It's all a game run for the benefit of well-connected insiders, and the whole idea that there is merit involved is a lie.

For decades, they have justified their thievery on the basis of taking risks. Well, they took risks, and look where that has gotten us. Seeming as how we will have a depression anyway, let's not give these thieves any more money. In fact, we should use RICO to claw back the money they have already stolen.

Maurice "Hank" Greenberg is fighting the breakup of the company. When AIG first got bailout money, they put up a company for sale in Hartford they owned called Hartford Steam Boiler (HSB). HSB is a specialty insurer that has been steadily profitable for many years - nothing huge, if I recall, but always steady. The company insures boilers and has been around for over 100 years. When the bailout happened, AIG decided they should be sold off to get some money, and they were in line to be sold to Munich Re, a German insurance company, but Greenberg has sued to stop AIG from selling off HSB.

I can't touch it until after the divorce is final, so keep it going until this summer until I can pull that money out. Or, better still, let all of use who had 403b accounts with Valic that AIG bought out be able to roll those over into a new company or take the money out without any penalties.

Mass executions for anyone involved with AIG! Not only that, but kill their families and anyone who even knows them! Trials are worthless! That's the progressive solution!

An especially FUCK OBAMA for taking the time to try and understand a complex situation and trying to unwind this mess carefully so it hurts the least number of people.

A new bank to take on "toxic debts" . . . are we insane?

We can support workers without supporting criminal capitalism . . .

Take over the auto plants and begin producing electric cars ---

Regulation helps, but the monster is so big it fights constantly for deregulation promising only goods things if it is left alone, but the incredibly gigantic always growing monster continues to recklessly devour, never stopping or caring what's in it's way...it buys votes steals vote, & controls the media while republican ideology supports the greedy creatures uncompromisingly, keeping the monster(s) well fed, safe & protected, inevitably creating more & more "too big to fail" arrogant, insatiably greedy monsters....Monopolies!

And Republicans have never met a monopoly they didn't love...

It's been long, long over due to break up the many monopolies that the regressive republicans have nourished and profited from and have used to suppress for the past thirty years....

but in the meantime it is Goldman Sachs that is running the government, handing out cash to themselves and laughing their asses off at all the anger directed at these bonuses.

Ask yourself, does the corporate media work for you? Are they looking into the bailout money going to international banks, the control Goldman Sachs has over our government, why this bank scam is happening at all?

and other interests of ordinary Americans?

Harvard Business School to run. I think they could do it fine.

to understand are just preparing their defense for and trials. You don't have to understand the minute details of a watch to know that it is a watch.