First Collective Quarterly Loss in Recorded History for S&P 500

[KRonn]

They are not getting bonuses for doing a good job - they are retention bonuses - basically a bonus given to people who you do not want to leave.

Perhaps that is not a good idea, but the issue is simple: they signed a contract that says if they stuck around, they would get bonuses of X, Y, and Z. So barring bankruptcy or something like that, they will get said bonuses. Nation of laws and all that.

Yeah, retention bonus, that's right...in the millions. That change of label just makes it all better. Hehe..

[KRonn]

Bye AIG!

Obama berates AIG and vows to try to block bonuses

Joining a wave of public anger, President Barack Obama blistered insurance giant AIG for "recklessness and greed" Monday and pledged to try to block it from handing its executives $165 million in bonuses after taking billions in federal bailout money. "How do they justify this outrage to the taxpayers who are keeping the company afloat?" Obama asked. "This isn't just a matter of dollars and cents. It's about our fundamental values."

You know, I can find a lot to disagree with Pres Obama over his spending, budgets, agendas in the stimulus. But I find it annoying that a President has to berate a corporation for egregious behavior, mainly in the massive losses and mismanagement they incurred. A President shouldn't have to do that; a corp shouldn't be so negligent as to come to that. Not anger at the Pres, anger that it has to be done at the level of a President because of the bad actor CEOs.

But while AIG makes a great whipping post, a focus for people's anger, there remains the fact that we still have a lot of work to do to make things right otherwise, over and above AIG.

[garbon]

I have anger at the President. What exactly does he know about running a corporation?

[Queequeg]

I have anger at the President. What exactly does he know about running a corporation?

Think it is fair to say that many of the CEOs of these companies don't know any better.

[Neil]

I have anger at the President. What exactly does he know about running a corporation?

Think it is fair to say that many of the CEOs of these companies don't know any better.

I'm pretty sure they do.

[katmai]

Think it is fair to say that many of the CEOs of these companies don't know any better.

I'm pretty sure they do.

Can't tell by what's happening now.

[garbon]

Can't tell by what's happening now.

Well they are still in existence and found someone else to foot the bill.

Besides, what exactly has Obama accomplished? Gave head to Nancy Pelosi?

[alfred russel]

The AIG loss is one-third of the net loss figure.  However, at least some reporting companies in the S&P 500 reported gains for the fourth quarter.  Thus the sum of the total amount of losses from those companies that reported losses is greater than the $180 billion number.   

The AIG loss is a big contributor, but there are many others who pitched in.

I think that is a very distorted figure.

AIG: $61.7 billion
Citi: $17.3 billion
GM: $9.6 billion
Ford: $14.7 billion
Fannie Mae: $25.2 billion
Freddie Mac: $23.9 billion

Those are Q4 losses. All of those are zombie companies that have ceased to have any meaningful market value and are only still in existence because the federal government is taking on the losses (Ford would still be around, for how much longer it can survive without the government we will see). Whether those companies record $50 billion in losses, $150 billion, or a $1 trillion is really irrelevant when examining the health of the S&P--in most economies they would have gone out of existence and not thrown off the statistics.

[katmai]

Hi Al!

[alfred russel]

Hi Al!

Howdy. What the hell happened?

[katmai]

Hi Al!

Howdy. What the hell happened?

moldy can tell ya exactly, but had some hardware that the old database was on crap out. so the much talked about port over happened sooner than expected

[alfred russel]

The AIG loss is one-third of the net loss figure.  However, at least some reporting companies in the S&P 500 reported gains for the fourth quarter.  Thus the sum of the total amount of losses from those companies that reported losses is greater than the $180 billion number.   

The AIG loss is a big contributor, but there are many others who pitched in.

We're doomed...

But hey, I liked the comment I heard on tv about the AIG spokesmen, guy is another "Baghdad Bob", defending "retention" bonuses to keep their good people. Seems at this point they'd be doing anything to push folks out of the company. That division getting the bonuses was the division that incurred the huge losses, according to the reports I saw. Sheesh... Good that their contract was structured in such a way that they got bonuses regardless of the outcome.

So at the same time the govt is saying AIG had contracts that we can't stop, they're going after the auto makers to change contracts with the unions, judges have been given authority to rewrite mortgage contracts, and so on. Lol... I just love how this is all working out. But rest assured, Barney Frank and other pols are hot on the trail of AIG! Lol. What I want to know is, who is hot on on the trails of the politicians, to call them to account for their actions, inactions, incompetence in these messes?  :-[

Lol....

There are a lot of companies that structure white collar financial salaries so that bonuses are an ordinary part of income--even for relatively junior personnel. We could go into a long discussion of why things are that way, and I'm not sold that it is for the best, but it is the way things are.

Keep in mind that the story with AIG has been that the underlying insurance business was profitable but the holding company was not due to the credit default swap catastrophe. In honor of throwing the baby out with the bathwater, here is a short list of some key AIG departures in recent months:

Kevin Kelley, Pres/CEO of Lexington (Lexington generates about 20% of AIG's US P/C premiums)
John Bennedetto, Pres AIG Executive Liability
Doug Worman, Pres AIG Excess Casualty
David Hawksby, Pres of Onshore Energy
Frank Costa, Pres of Offshore Energy
William Lovett, Pres/CEO of US aviation

I recommend all the salary hawks to read this article:

http://www.businessinsurance.com/cgi-bin/article.pl?article_id=26792

[Baron von Schtinkenbutt]

Hi Al!

Howdy. What the hell happened?

The old server's hard drive went tits up.  This board is one of two I originally threw up to test out the SMF forum software, and got pressed into service as the "new" Languish.  It remains to be seen if this will remain the permanent Languish.

The other SMF forum has almost all of the user data preserved, but neither has the post database.  I have everything from the now-dead server and intend to resurrect the old board as a read-only archive, but its fairly low on my priorities at the moment.  Getting this board tweaked is a higher priority, as is getting back as much user data as possible.

[alfred russel]

Hi Al!

Howdy. What the hell happened?

The old server's hard drive went tits up.  This board is one of two I originally threw up to test out the SMF forum software, and got pressed into service as the "new" Languish.  It remains to be seen if this will remain the permanent Languish.

The other SMF forum has almost all of the user data preserved, but neither has the post database.  I have everything from the now-dead server and intend to resurrect the old board as a read-only archive, but its fairly low on my priorities at the moment.  Getting this board tweaked is a higher priority, as is getting back as much user data as possible.

It would be cool if the old forum was restored at some point, even if only the read only version.

[MadImmortalMan]

The AIG loss is one-third of the net loss figure.  However, at least some reporting companies in the S&P 500 reported gains for the fourth quarter.  Thus the sum of the total amount of losses from those companies that reported losses is greater than the $180 billion number.   

The AIG loss is a big contributor, but there are many others who pitched in.

I think that is a very distorted figure.

AIG: $61.7 billion
Citi: $17.3 billion
GM: $9.6 billion
Ford: $14.7 billion
Fannie Mae: $25.2 billion
Freddie Mac: $23.9 billion

Those are Q4 losses. All of those are zombie companies that have ceased to have any meaningful market value and are only still in existence because the federal government is taking on the losses (Ford would still be around, for how much longer it can survive without the government we will see). Whether those companies record $50 billion in losses, $150 billion, or a $1 trillion is really irrelevant when examining the health of the S&P--in most economies they would have gone out of existence and not thrown off the statistics.

Now we've got a banking bounce on the upcoming profitable quarters of Citi and BofA, and I suspect that a lot of their cash flow is coming from debt repayment from AIG, who, in turn, got the cash from our tax money. I don't think we're at the bottom. Nobody's lending yet except the Fed.