My favorite is hearing the argument about contractual obligations. It seems it's ok to screw a regular employee out of something, but a contract to an executive is apparently untouchable.
My favorite is hearing the argument about contractual obligations. It seems it's ok to screw a regular employee out of something, but a contract to an executive is apparently untouchable.
Wall St compensation packages, at least in the past, have been based on bonuses rather than strictly salary like average joe companies... if the people receiving these bonuses had it in their contract, they'd probably win a lawsuit against AIG regardless of how insane it may appear to you or me, and then they'd be out both the bonus money and the lawyer fees/court costs.
I don't think it's morally right and I don't necessarily thing that AIG should have been bailed out, but it is what it is. in the current situation, I don't really see an alternative to paying out the contractually obligated bonuses.
I don't think it's morally right and I don't necessarily thing that AIG should have been bailed out, but it is what it is. in the current situation, I don't really see an alternative to paying out the contractually obligated bonuses.
question: if these guys can so easily go to another company and continue business. then what's so important about saving AIG?
the reasoning for saving the auto companies is that the industry collapses. but that's because those people have no where to go.
so either we're saving a worthless company, or these executives are full of it. either way, i say the US should just cut it's losses and allow AIG to fail instead of left on the hook.
the reasoning for saving the auto companies is that the industry collapses. but that's because those people have no where to go.
so either we're saving a worthless company, or these executives are full of it. either way, i say the US should just cut it's losses and allow AIG to fail instead of left on the hook.
Oh, there will always be capital misallocation, the difference is the degree. The bubbles we are experiencing today are of far greater potency and length. Rather than being forced to correct, we can now nurture the growth and delay the correction for much bigger booms and busts. One generation can essentially sacrifice their successor. We mortgaged practically the entire farm to buy milk the last 30 years, our entire manufacturing base is hollowed out.
http://www.dailyreckoning.com/credit-bubbles/
"Excessive spending that led to trade deficits was naturally corrected when gold accompanied gold-backed currency on trips overseas to pay for imports. When this gold foundation left the monetary system, domestic bank reserves contracted, and credit was rationed to the extent that a recession ensued. This nipped spending and investment excesses (bubbles) in the bud. The international gold standard prevented any participant in international trade from enjoying long periods of consuming more than they produce."
Right, we only used it to great success for 170 years. We would be nothing today without gold. Kids! So grateful!
Oh, please. Their scope of access is laughable, everything of value is off limits.
http://www.gao.gov/products/T-GGD-94-44
Not if they filed Chapter 11! The gov't should have let AIG go Chapter 11 and fix itself or die!
rudder
Lifer
- Nov 9, 2000
- 19,441
- 86
- 91
Look I have said time and time again. You need to give out these huge bonuses to attract the talent. Otherwise you get a multibillion dollar company that is going to need repeated bailouts from the government to stay afloat. Plus these bonuses were already in the contract.
Those claiming that the contracts are the driving force behind these bonuses didn't actually read carefully enough to see that they they were "retention" bonuses. If the "talent" (and I use that term in the loosest of manners) were not retained, there is not contractual obligation to pay the bonus.
The "talent" can then go and try to find work with the tens of thousands of other out of work financial professionals and AIG can hire their replacements from the vast pool of "talent" that ran the like of GS and LEH into the same boat that they are because of the same, shared flawed mentality.
The "talent" can then go and try to find work with the tens of thousands of other out of work financial professionals and AIG can hire their replacements from the vast pool of "talent" that ran the like of GS and LEH into the same boat that they are because of the same, shared flawed mentality.
YES!
And as any lawyer will tell you, the government could put these people through the fucking wringer. If Treasury treated these over-testeroned boys like drug dealers, they'd put a stop to this malfeasance. Instead, Geithner and Obama are showing about as much sign of being male as Boy George!! Fuck!!
-Robert
Hayabusa Rider
Admin Emeritus & Elite Member
- Jan 26, 2000
- 50,879
- 4,268
- 126
Unfortunately the Dems are in bed with the corporations just as much as the Reps.
I'm not sure about the contractual obligations however even if they are legitimate they certainly are open to renegotiation. In any case, there should have been provisions in the bail out agreements which would have eliminated or minimized this sort of thing. AFAIK there was nothing other than the "good will" of sharks (the execs themselves) that this wouldn't happen. It was no strings attached as far as I can tell.
I'm not sure about the contractual obligations however even if they are legitimate they certainly are open to renegotiation. In any case, there should have been provisions in the bail out agreements which would have eliminated or minimized this sort of thing. AFAIK there was nothing other than the "good will" of sharks (the execs themselves) that this wouldn't happen. It was no strings attached as far as I can tell.
I don't have an opinion on this topic but I just wanted to remind everyone that bonuses in the financial industry are different from elsewhere. In the financial industry, they are roughly half of what employees make in the whole year. So bonuses mean far more than elsewhere.
If the Democrats believe we should not be upset with the 1% of the government's budget being used for wasteful, porky pet projects - then why should we be outraged with 0.1% of bailout money going to bonuses? Bonuses are not what destroyed AIG. And if bonuses are what can help build the business back to profitability, then why not allow it?
The difference between the government and AIG is, wasteful government spending *is* what is killing the government by racking up the national debt to levels we will never be able to pay back except through hyper-inflation.
These bonuses are about the *least* of our concerns in this day.
The difference between the government and AIG is, wasteful government spending *is* what is killing the government by racking up the national debt to levels we will never be able to pay back except through hyper-inflation.
These bonuses are about the *least* of our concerns in this day.
bailout money to pay for these institutions is ridiculous. These fat cats deserve the worst fate ever. However, as usual, people are screaming about a tiny fraction of the problem and not concentrating on the bigger picture.
GeezerMan
Platinum Member
- Jan 28, 2005
- 2,146
- 26
- 91
Bernanke was on 60 minutes tonight. One of the first times a Federal Reserve chairman has agreed to an interview. We are honored.
I kept waiting for what I thought would be the best question for Scott Pelley to ask. How come the Fed won't say where the bailout money went? The question was not asked.
Oh, yeah. I forgot. It's a trade secret. I'll try that approach next time I want a loan from a bank.
Link
I kept waiting for what I thought would be the best question for Scott Pelley to ask. How come the Fed won't say where the bailout money went? The question was not asked.
Oh, yeah. I forgot. It's a trade secret. I'll try that approach next time I want a loan from a bank.
Link
BoberFett
Lifer
- Oct 9, 1999
- 37,562
- 9
- 81
What's the average salary of those receiving the bonuses, sans bonus?
I don't think you'll find too many crying eyes for these poor, abused finance "wizards" who have fucked the country to the tune of trillions of dollars. They deserve leg irons, not bonuses.
Triumph
Lifer
- Oct 9, 1999
- 15,031
- 14
- 81
Well obviously it wasn't a performance based bonus, since their performance sucked. But that's after the fact. The problem with this "bonus" argument assumes that only a handful of people can do these jobs. I'm willing to bet that there are millions of people who could've done just as good a job at fucking up the economy as these people.
These contracts were negotiated in bad faith right before the bailout. Just like Merrill Lynch gave bonuses right before being bought, so too did AIG whose executives enrich all their buddies right before begging the government for bailouts. These executives are the same people who ran this company into the ground. People should be going to jail and not getting any bonuses for screwing up.
The government should cancel these contracts because they were negotiated in bad faith and with gross misconduct.
brandonbull
Diamond Member
- May 3, 2005
- 6,365
- 1,223
- 126
Let them sue. I'd more than happy to allow them in line right after the US taxpayer for collecting on the money due to them.
statistically, they actually won't, or at least not most of it. most of it we be dropped in financial instruments or already existing property.
aig is failing because lehman failed
who is going to fail if aig fails?
who is going to fail when those companies fail?
i'll get to the rest of this shit later, but the gold standard didn't last 170 years, certainly not consecutively. Your link shows a disturbing lack of understanding of the mechanics of the gold standard, but i'll come back to this eventually.
edit:dates of adoption of the gold standard
the gold standard ended in 1914, and an attempt to resume it began in 1925, which failed completelu in 1931 after years of the british and american governments propping it up. a second attempt to institute the gold standard occurred at betton-words, this attempted failed in 1971. a third attempt was made in 1971, which failed in 1972. Noone has tried it since.
ok here we go, i'll start will pointing out some incredibly stupid points in this article, by the looks of it thee are many.
taxes, maintenance, appliances, etc are common to both rental and ownership, the only difference is the costs are distributed differently. All capital depreciates, that does not mean that at a given point of depreciation it has no value. Land prices are subject to several effects, among others; the productive value of the land when farmed, its distance from places of work and leisure, etc. There is of course limited land and an increasing number of people seeking to have it. Furthermore, as incomes increase the value of living near work increases with it.
Obviously farmers failing would be bad for banks, farmers were and still are major users of credit.
history is littered with thousands of gold backed currencies as well, talk abut a non-point.
there was easy credit because there has been too much investment capital for far too long, for two primary reasons: saving rates in asian and middle eastern countries have been far too high, and low income, dividend and capital gains taxes on the extreme high end (people who's primary incomes are from 'investing' rather then earning) With too much capital in markets, returns on investment dropped to the point were the constant returns of real estate become tempting, especially when bundled into various exotic securities. Of course with the increased demand for real estate and limited supply of real estate, prices began to increase at an increasing rate, and a bubble occurs.
most of my post will address this incredibly ignorant paragraph, since its really the key intellectual argument of the article.
The problems of a gold backed currency are similar to those of a normal fixed exchange rate currency, and adds to it several other problems.
to begin with, the real value of a currency is determined in international trade. For a starting point, we'll just say that everything works and exchange rates are based around rates you can trade for gold. Trade will arbitrate any differences in price.
now lets say a country becomes more productive, saw by invention of the cotton gin or something. The price of cotton in this case falls, the British buy more of it, and currency flows from Britain to the United States. With the amount of gold fixed and more economic activity occurring, both economies experience deflation. Deflation is bad news, and is inevitable with a fixed amount of currency and increase productivity and increasing populations. this is a big problem. anyways so you have fixed currencies with unstable exchange forces. with unstable currency values you have a) costs and risks of transporting gold and more importantly b) pressure to reevaluate currencies. In normal economies, such as the modern fiat system used today, prices would simply adjust to supply and demand, and you woudl have a new exchange rate. In gold standard economies, you have the risk for a run on a currency, where all the people holding a currency feel the government is going to re-evaluate its currency (or stop payment altogether) thus you have a speculative attack. Speculative attacks brought down both the pound in the 1920's and the dollar in the late 60's/early 70's.
cliffs: the dudes hypothesis doesn't work because exchange rates are constant.
the fundamental problem with the gold standard is that gold is worthless. you can't eat it, produce with it, or anything. The only value gold has is the FAITH that someone else will buy it from you at a similar price
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