Monday, March 16, 2009


The AIG insanity is really starting to piss me off. AIG has released a list of counterparties to the CDS, GIA and Securities Lending Transactions. As expected Goldman Sachs was the largest single counterparty closely followed by three European banks - France’s Société Générale, Germany’s Deutsche Bank and the UK’s Barclays. Isn't it nice of the US to bail out the rest of the worlds banks? We pay their pharmaceutical bills too.

Then we get the exciting news that the bonuses being paid out at AIG don't total $170,000,000 but instead $1,200,000,000 (nearly 10 times the original value), and $450,000,000 (3 times the original quoute) of it to the financial products division that got AIG into this mess. Isn't it interesting how the Treasury Department forced the UAW to take a haircut as a condition to bailing out the auto companies but the contracts can't be broken to AIG employees. No wonder the White House is worried about backlash. Here is a disgusting Larry Summers quote:
We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.

As Glenn Greenwald says:
Apparently, the supreme sanctity of employment contracts applies only to some types of employees but not others. Either way, the Obama administration’s claim that nothing could be done about the AIG bonuses because AIG has solid, sacred contractual commitments to pay them is, for so many reasons, absurd on its face.

Then you read a story in the NY Times, the Wall Street crowd in NY is still splurging on 5 figure afternoon dance parties with $750 magnums of champagne. An interesting quote from that article is here:
As for how he and his fellow Wall Streeters could still afford such afternoons, he said: "We all made so much money in the past five years, it doesn’t matter."

A 29-year-old man who works for a large investment management firm and was at Bagatelle’s brunch one recent Saturday and at Merkato 55’s the next, put it another way: "If you’d asked me in October, I’d say it’d be a different situation, and I don’t think I’d be here. Then the government gave us $10 billion."

To top it all off you read about how Sen. Evan Bayh (D-IN) is going to lead his band of Senate "moderates" in an effort to kill the mortgage cramdown bill and give the finger to regular homeowners facing foreclosure and eviction, because it might "reward" someone who was "irresponsible."

I guess AIG and Wall Street were really really responsible. Responsible that is for the mess we are in.

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