Today in the economy

[Hunter]

The Financial Accounting Standards Board, pressured by lawmakers to change the fair-value rule blamed for worsening the financial crisis, proposed permitting companies to use “significant judgment” in valuing assets......

Haha - I cant believe this.......Talk about putting a band aid on the problem...

[Kirkland Laing]

“We are a country of law”...... “There are contracts. The government cannot just abrogate contracts."

Lawrence Summers
Obama Chief Economic Advisor on AIG bonuses
March 15, 2009




The UAW announced Tuesday that it reached the tentative agreement with General Motors Corp., Chrysler LLC and Ford Motor Co. over contract concessions, as GM and Chrysler sent plans to the Treasury Department asking for a total of $39 billion in government financing to help them survive.
Concessions with the union are a condition of the $17.4 billion in government loans that the automakers have received so far.


AP
February 18th, 2009

[Kirkland Laing]

But until we get that [the financial system] stablilised and working normally, we're not gonna see recovery. But we do have a plan. We're working on it. And I do think that we will get it stabilized, and we'll see the recession coming to and end probably this year.

Ben Bernanke
Federal Reserve Chairman
March 15th, 2009





Some observers have expressed concern about rising levels of household debt, and we at the Federal Reserve follow these developments closely. However, concerns about debt growth should be allayed by the fact that household assets (particularly housing wealth) have risen even more quickly than household liabilities............

House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas.

Ben Bernanke
Federal Reserve Chairman
March 8th, 2005







Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.............

Importantly, we see no serious broader spillover to banks or thrift institutions from the problems in the subprime market; troubled lenders, for the most part, have not been institutions with federally insured deposits.

Ben Bernanke
Federal Reserve Chairman
May 17th, 2007

[Kirkland Laing]

In our fury over the bonuses at AIG, we should not forget the PIGs there who pocketed millions while endangering the global economy.


One at the top of the list is 54-year-old Joseph Cassano, a Brooklyn cop's kid made good who went oh so bad.



As head of the Financial Products unit, Cassano racked up billions of losses while assuring investors it was nearly impossible for his unit to lose.
"It is hard for us, without being flippant, to even see a scenario within any kind of [rhyme] or reason that would see us losing one dollar in any of those transactions," he told investors.



Before he was finally fired last March, Cassano pocketed $280 million in cash and an additional $34 million in bonuses.



Under a "retirement" agreement marked "confidential," Cassano also got a $1 million-a-month "consulting fee."................




Joseph Cassano started out at Drexel Burnham Lambert under Michael Milken, "the Junk Bond King." Drexel imploded in 1990 and Milken landed in prison.



AIG promptly hired a team of Drexel people to start a Financial Products unit, Cassano among them. Cassano became the head and began dealing in securities known as "credit default swaps" out of one office in Wilton, Conn., and another in England, dubbed "the London casino."............................




Company auditor Joseph St. Denis became concerned about the Financial Products unit, but Cassano barred him from checking.



St. Denis later quoted Cassano as saying, "I have deliberately excluded you ... because I was concerned that you would pollute the process."

New York Daily News
March 17th 2009






According to a "brokercheck report" put out by the financial regulatory agency FINRA, the Justice Department in 2004 criminally charged Cassano's unit with helping another firm, PNC Financial Services, to conceal certain assets from its books. In the end, AIG came to a settlement with DOJ and SEC, in which it paid a fine -- $80 million. Had the SEC come down harder on Cassano and AIGFP, it's conceivable that the agency could have helped stop the practices that would ultimately destroy AIG and that contributed to the current financial crisis.

Wall Street Journal
March 18th, 2009












In Securities and Exchange Commission filings, AIG acknowledges that it is under federal scrutiny for possible fraud, and notes that it is cooperating with the government's probe.

Investigators are looking at statements from company leaders, who sometimes painted a sunny picture, even in the months and weeks before financial implosion.


ABC News
March 17, 2009








Despite my position and FSD',s and AP's interest in the issue, I had no
involvement with eiforts to value AIGFP's SSCDS portfolio. This was, in my
understanding, due to the actions of Mr. Cassano to exclude me from the SSCDS valuation pro..rr. During the final week of September of 2007, the final week of my employment at AIGFP, in a meeting with Mr. Cassano, the newly hired CFO of AIGFP and the AIGFP quantitative risk expert, Mr. Cassano made the following statement to me:

"I have deliberately excluded you from the valuation of the Super Seniors because
I was concemed that you would pollute the process."

My belief is that the "pollution" Mr. Cassano was concerned about was the
transparency I brought to AIGFP's accounting policy process.


Statement by Joseph St. Dennis, AIG chief auditor, to the Senate Banking committee inquiry.
October 4th, 2008





AIGFP chief Joseph Cassano

[El Kabong]

#1 the bonuses AIG paid out were less than what Merrill Lynch paid out earlier #2 The amount paid out was less than 1/10 of 1% of the bailout money.

This bonus mess is just a red herring....and Chris Dodd (DEMOCRAT) and Tim Geithner (DEMOCRAT) put it in the Omnibus bill that companies that were bailed out could keep giving bonuses. Calling in the GOVERNMENT APPOINTED CEO of AIG and berating him infront of Congress wasn't too smooth either.

I don't like the bonuses as they are in poor taste but people screaming for them to just seize those bonuses scare me....I don't want the government to get the idea that they can just take shit that people own not for taxation but "just because"


As always the Democrats talk a good game for the people but they NEVER deliver anything but higher taxes which they don't even fucking pay

[killersheep]

#1 the bonuses AIG paid out were less than what Merrill Lynch paid out earlier #2 The amount paid out was less than 1/10 of 1% of the bailout money.

This bonus mess is just a red herring....and Chris Dodd (DEMOCRAT) and Tim Geithner (DEMOCRAT) put it in the Omnibus bill that companies that were bailed out could keep giving bonuses. Calling in the GOVERNMENT APPOINTED CEO of AIG and berating him infront of Congress wasn't too smooth either.

I don't like the bonuses as they are in poor taste but people screaming for them to just seize those bonuses scare me....I don't want the government to get the idea that they can just take shit that people own not for taxation but "just because"


As always the Democrats talk a good game for the people but they NEVER deliver anything but higher taxes which they don't even fucking pay

Lyle, why are you defending AIG's actions?
Why are you blaming Democrats for AIG's actions?
Since we've seen two weeks of positive gains in the market does that mean the market is reacting positively to Obama's actions or do you only hold that view when the markets decline?
Furthermore, why are you forwarding a political agenda in a case of free markets misallocating funds?

[El Kabong]

I am not defending what they did, I am defending their right to do that if they so choose. It's not the government's place to say anything about bonuses....AIG is a scapegoat, if they really cared about where the money went #1 Everyone would have been up in arms over Merrill Lynch's bonuses and #2 CONGRESS PUT IT IN THE BILL (Democrat Chris Dodd and Tim Geithner specifically) THAT AIG COULD GIVE BONUSES......in the immortal words of Former DC mayor Marion Berry "Bitch set me up!"

I just want the government to ease up a bit...all companies aren't evil corporations looking to screw over the populus and if they were then what better role model do they have to look up to than the US Government?

[Kirkland Laing]

#1 the bonuses AIG paid out were less than what Merrill Lynch paid out earlier #2 The amount paid out was less than 1/10 of 1% of the bailout money.

This bonus mess is just a red herring....and Chris Dodd (DEMOCRAT) and Tim Geithner (DEMOCRAT) put it in the Omnibus bill that companies that were bailed out could keep giving bonuses. Calling in the GOVERNMENT APPOINTED CEO of AIG and berating him infront of Congress wasn't too smooth either.

I don't like the bonuses as they are in poor taste but people screaming for them to just seize those bonuses scare me....I don't want the government to get the idea that they can just take shit that people own not for taxation but "just because"


As always the Democrats talk a good game for the people but they NEVER deliver anything but higher taxes which they don't even fucking pay

The GOP were for paying bonuses before they were against paying them. They only came out against paying them when Americans started getting upset over guys the tax payer was bailing out getting bonuses. Both the GOP and the Democrats are bought and paid for by the financial industry and are keeping them in their jobs with trillions of dollars of taxpayer money. If the government hadn't bailed out firms like AIG then their employees would all be out of work. If the government really wanted to, and wasn't bought and paid for by the financial industry, they could have cancelled all those contracts/bonusus when they bailed the companies out.

The GOP over the last eight years have delivered permanently high taxes for the vast majority of your working life to come after spending the last thirty years redistributing wealth from 99% of Americans to guys like Mr. Cassano, pictured above. You can't blame the Democrats for that. You can blame them for a lot, but if you're blaming them for high taxes/screwing the economy up then the vast majority of the blame should be directed at the GOP.