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Revenge of the Spurned
So what happens if we manage to wrest all those retention bonuses away from the AIG traders who destroyed the company? Maybe this:
Company officials contend that the uproar is scaring away the very employees who understand AIG Financial Products' complex trades and who are trying to dismantle the division before it further endangers the world's economy.
"It's going to blow up," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I have a horrible, horrible, horrible feeling that this is going to end badly."
That would be bad. But Andrew Ross Sorkin thinks it might be even worse:
A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not? They know how bad it is. They built it.
So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company.
Now that's a lovely thought, isn't it? If they don't get their bonuses, these guys might not only leave AIG, but turn around and do their best to make things even worse. That's just speculation, of course. But would it surprise anyone if that started to happen?
insider trading laws?
If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not?
Or what about noncompete clauses? Don't that have those in their contracts somewhere?
I won't just believe a "some
I won't just believe a "some say" pile of horse shit. I can't wait for the "better not investigate them because they're holding a gun to the world economy" argument. Jesus, get them a bald cat already, it doesn't get more Dr. Evil than this.
So essentially we owe these
So essentially we owe these jackasses several hundred million dollars in bonuses -- er, I mean hush money/bribes -- so that they won't screw things up worse?!? What would we do if some about-to-be laid-off UAW worker in Detroit threatened to sabotage the brakes on every 50th car he worked on unless the old contract and full pension benefits for retirees were reinstated? His ass would be hauled off to jail rather quickly. Can someone please explain to me why we can't treat these clowns the same?
Boom
We've arrived at an honest to goodness ticking time bomb scenario. Why don't we just waterboard them till they quit fucking around?
Liars
What lies would you tell if someone was making noises about taking away your multi-million dollar bonus? Especially if you're known in the business as the guys who destroyed AIG and possibly the entire world economy so maybe this is your last big money job for a while? I know I'd say something like "you better keep me around, because if you don't, nobody will know how to figure out this stuff and WORSE THINGS THAN YOU CAN IMAGINE WILL HAPPEN.
I say call their bluff. Fire these 'tards. Dream up a prosecution scenario for them if they threaten anything and see if they'll talk when facing years in the can. IIRC, England can hold terror suspects for over a month w/o charging them. Food for thought.
However, my guess is our government will just roll over & give them what they want in some form or another. Geithner doesn't want to annoy his buddies and will continue to play straight from the Dick Cheney playbook -- fear fear fear -- do what I say or OMG the world will end. Oh, and while you're just standing there, why don't you help me shovel some of this cash we're giving to Goldman Sachs?
Seems like they wouldn't be
Seems like they wouldn't be able to do a whole heckuva lot of undermining the global financial system from prison, so why not put them there instead? I've started to see proposals for Congress to pass a targeted tax on AIG bonuses, but will that work on employees based out of London?
I'm not a legal expert...
I'm not a legal expert... but wouldn't that be insider trading?
Absolute bollocks, the bonuses go to the parsite managers
Sure we may need some of the people from the engine room. But these bonuses go to the managers whose only qualification is their MBA and can be REPLACED with another MBA without issue. Or better a person without an MBA, they are over-rated.
All the details of the deals are known by the actual trading desk types and by the compliance people in the back office.
BS
These are insurance contracts. Who needs geniuses to run them? If the premiums are paid, the claims must be paid, if they meet pre-agreed contractural requirements. All you need is a tight-fisted SOB to deny claims that do not meet the letter of the contracts. Those would be the lawyers and accountants--not the sales geniuses that invented the crap. Surely there is a list of insured parties, insured amounts, conditions of claims in a contractural form. If it's all "in their head", with no governing contract, there is no liability.
BS
All of this stuff is just crap. This whole "blow up the world financial system" is nothing more than the "smoking gun could be a mushroom cloud" of the latest crisis. Bankers have figured out they stand to lose a lot of money and are trying to stick the taxpayer with the bill. AIG is just a way to shovel more money to them. It's like they've taken the world economy hostage and are holding it for ransom. The thing is, they haven't. If the bomb strapped to their chest goes off the only ones getting hurt are them.
I simply do not believe that
I simply do not believe that others cannot "understand these complex trades." Unpossible. A lot of people don't understand them because nobody's got access to them, but there's a lot of talent available out there now that could. Once they do, these guys will be superfluous.
I'm with Scrivener @4:38
How about we lock them all up? Their sentences could include the task of explaining to others exactly what they did to blow up the economy, so the ticking time bomb could be defused. If nothing else the spectacle of a bunch of these guys being led away in handcuffs would do wonders for national morale.
Title should be
"Revenge of the Spurned", no?
Are you telling me that AIG
Are you telling me that AIG neglected to obtain the most basic contractual protections from those it hired -- like not using confidential information for any other purpose than performing their duties on behalf of AIG -- while gleefully contractually guaranteeing bonuses without any link to performance?
AIG needs to be pulled apart. An institution that incompetent doesn't deserve to survive.
Revenge of the Spurned?
Revenge of the Spurned? Yes!!!
Moral Hazard Coming Home to Roost
You know, this is the problem with our current system, where we pay these supposed geniuses of finance multi-millions annually. The thing is that they're not smarter than the rest of us, but what they do have is a job that gives them access to information the rest of us lack. Kind of like people with classified clearance.
The thing is, we've paid them so much already that they can walk away from this job as very, very wealthy men. And they know it. This means it doesn't matter to them if their company fails or hell, it doesn't matter much if the rest of the economy fails. They'll still be rich. They'll go on vacation until the recession ends. In fact, the best use of their information at this point is NOT to save the company, but to extort us. The deal now is we either pay them their massive bonuses, or they'll walk away and let the company collapse.
It's interesting to compare this to the behavior of the auto unions, who also had a contract that was signed before this economic collapse began. The unions (which, unlike these finance guys, had ZERO culpability for the collapse that Chrysler and GM were facing) had to put the interests of the company first because they were in a "mutually assured destruction" situation. Their workers couldn't walk away from the company. So, the workers had to pay a major price even though they'd done nothing wrong, and they opened up the contracts and took a major hit.
This is one of many, many problems with paying these guys millions of dollars. The solvency of the company, the soundness of the deals, the nation's economic interests--none of these align with their interests anymore because they're as rich as Croesus. There's no leverage on them--we're literally in a position of bribing them as they extort us, threatening to leave with this information.
That's why the government has to come down on these guys like a ton of bricks. The whole "pretty please, don't tank the economy" has to end. It gives them the power, and they'll use it to extort us further. If, in fact, the collapse of AIG is the end of the economy, it's time to treat these guys like financial terrorists. They WILL do their jobs, or we'll send them to gitmo.
I'm actually not kidding about this. Right now, a CIA agent who makes 1/100 of what these guys make can go to jail if he tries to extort the government by threatening to mis-use information vital to our national security that he possesses. At the very least, these spoiled children who are threatening our national security by making extortionate demands against the survival of our financial markets should face similar consequences.
Lordy- if we can keep folks
Lordy- if we can keep folks in jail at Gitmo for seven years with no charges, why can we round up these fuckers and put them in jail - and then figure out their criminal acts?
Geithner needs to take a meeting with "our" employees.
tagged as:- solution
The message should be clear and direct. You are not getting any bonuses at all for 3 years. You are going to work hard to straighten out this mess you have created. If you do not comply, you will never work in this town, country or world again. The end.
Anonymous: "...That's why
Anonymous: "...That's why the government has to come down on these guys like a ton of bricks. The whole "pretty please, don't tank the economy" has to end. It gives them the power, and they'll use it to extort us further. If, in fact, the collapse of AIG is the end of the economy, it's time to treat these guys like financial terrorists. They WILL do their jobs, or we'll send them to gitmo.
I'm actually not kidding about this. Right now, a CIA agent who makes 1/100 of what these guys make can go to jail if he tries to extort the government by threatening to mis-use information vital to our national security that he possesses. At the very least, these spoiled children who are threatening our national security by making extortionate demands against the survival of our financial markets should face similar consequences. "
You got it! That's the best I've heard it summarized so far. I think you've coined a new phrase for a new phenomenon: financial terrorism...FINANCIAL TERRORISM. Let's get this meme out there and circulating.
and where are these talented
and where are these talented people going to work after AIG? please.
winner of the thread?
Boronx on March 16, 2009 - 11:46pm.
can they trade if they're in jail
Can these people engage in business if they're charged with something precisely relating to what they'd be doing?
kidding, right
If you believe the threat, that a handful of financial hotshots are holding the keys to economic recovery hostage to their million dollar bonuses, you are a dupe. Rewarding these self-dealing clowns is unacceptable. They created this mess, and we, as the 80% owner of AIG, are supposed respect their "contract" for creating such a disaster?
There are hundreds of thousands of equally smart people who actually give a damn about the plight of the American economy. We can mobilize an Army in Afghanistan, but understanding AIG is beyond our reach?
I suggest we do something more productive with our company: kick their incompetent a** out of Wall Street, and hire some people who have decency.
These are "retention
These are "retention bonuses" to keep employees from leaving. This assumes the employees want / need another job.
So KILL their chances for getting another job in finance.
Announce a civil and criminal investigations into how badly the shareholders were defrauded, or fiduciary responsibilities evaded. Announce that charges will be brought up, and that regulators will look poorly at companies that hire these people since clearly these people are incompetent if not civilly and criminally liable.
If they need a license to trade, take it away.
Apparently our financial
Apparently our financial system has been and remains in the hands of sociopaths, who not only do not have a conscience, but cannot grasp the concept. If one really believes that short-term personal gain is of greater value than the prevention of global economic collapse (which would have an adverse impact on long-term gain), and that if short-term gain is frustrated then accelerating a collapse is reasonable, then the right placement is not in the financial sector, but in the psychiatric one - preferably the forensic unit.
Simple answer
tagged as:- solution
Make them earn those bonuses. They have to stay in their chairs and clean up the mess. When that's done, they get the money. And immunity from prosecution.
Prison isn't good enough. We
Prison isn't good enough. We need to get tough on these sociopaths - their activities have been allowed to run unchecked for decades.
We should consider indefinite civil commitment. According to the law, mentally ill people can be locked up against their will if they are a danger to themselves or others. The DSM-IV defines antisocial personality disorder (sociopathy) as three or more of the following:
1. Failure to conform to social norms with respect to lawful behaviors as indicated by repeatedly performing acts that are grounds for arrest;
2. Deceitfulness, as indicated by repeatedly lying, use of aliases, or conning others for personal profit or pleasure;
3. Impulsivity or failure to plan ahead;
4. Irritability and aggressiveness, as indicated by repeated physical fights or assaults;
5. Reckless disregard for safety of self or others;
6. Consistent irresponsibility, as indicated by repeated failure to sustain consistent work behavior or honor financial obligations;
7. Lack of remorse, as indicated by being indifferent to or rationalizing having hurt, mistreated, or stolen from another.
Now, how many of the Wall Street finance types do you think meet this description? Lock them up in the loony bin. If nothing else, threatening to do this would give us all the leverage we need.
Tunneling
Trading against the books that you yourself made is, in essence, a form of tunneling (http://en.wikipedia.org/wiki/Tunneling_(fraud)), and as such should be criminalized. Now.
Shut 'em down.
Doesn't the SEC (yeah, I know, quit laughing) have rules and the ability to shut those types of shenanigans down?
Maybe we need an SEC that actually knows what it's doing and isn't afraid to tear this stuff apart.
I keep waiting for the indictments, and they keep not coming. If Obama wants to know why people are losing faith in his sparkly new administration, they need look no further.
Does Leavenworth have a
Does Leavenworth have a trading desk?
Protectionism
The more I think about this, the more convinced I become that the name of the game is to protect the compensation structure of the financial services industry. AIG is their Alamo. If this barricade is breached, compensation for the entire industry is jeopardized. Financial insiders will go down fighting to preserve their compensation structure -- and that includes Geithner, Summers, Rubin and every other financial insider on the Obama team.
Yes. I posted elsewhere
Yes. I posted elsewhere that these financial elites have done far more damage to the country from within than all of these terrorists that we have been interrogating in an enhanced manner...
"The more I think about
"The more I think about this, the more convinced I become that the name of the game is to protect the compensation structure of the financial services industry. AIG is their Alamo."
I hope it is their Alamo. We know how that turned out.
Jim G.: I hope it is their
Jim G.: I hope it is their Alamo. We know how that turned out.
I'm looking forward to the re-match.
Very truly yours,
Antonio Lopez de Santa Anna
How do we know they aren't trading against AIG already?
If it would be so profitable, they are probably already doing it on the side.
How can they do that from
How can they do that from prison?