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

[MadImmortalMan]

http://www.reuters.com/article/GCA-CreditCrisis/idUSN1548789520090316

[Malthus]

What point are you attempting to make? That some manager somewhere has been competent?

Granted - that's not in dispute; but the massive financial failures could not have happened without a systemic lack of oversight in these firms. 

Yes, your statement overreaches greatly; which I suppose is what led you into Marty analogy hour.

It only "overreaches" if you are pathologically dedicated to putting an absurd interpretation on it.

Of course *that* wouldn't describe anyone posting *here* now, would it? 

Indeed it does - you.

The idea that a retention bonus MUST be irrational, absent any actual evidence one way or the other beyond gross generalizations that are nto relevant to the specifics of the issue, is rather absurd.

I take it you haven't actually BOTHERED to READ my posts.  :

This impression may be wrong of course - it could well be the case that the valuable and unique skills of these persons is just what is needed to turn these businesses around, and so a retention bonus is a wise and far-sighted investment, negotiated at arm's length with only the best interests of the shareholders in mind.

and

The decisions in any individual case may indeed *be* rational.

How does that square with your insistance that I said that "the bonuses MUST be irrational, absent any actual evidence one way or the other"?

There is "absurdity" here, and it is on YOUR part. 

[See I can use CAPITALS too!  ]

[Berkut]

Your token statement though doesn't match up with your entire argument. If you don't know if they are irrational and unjust, why are you going on and on about them being irrational and unjust based solely on a generalized view of the system and its well known failures?

That si what is missing from this little witch hunt - and actual *specific* information about the retention bonuses and the specifics of the business case for them.

That doesn't stop the masses from calling for a rope though.

[Berkut]

http://www.reuters.com/article/GCA-CreditCrisis/idUSN1548789520090316

What do people think AIG was going to use all that money FOR?

[The Minsky Moment]

http://www.reuters.com/article/GCA-CreditCrisis/idUSN1548789520090316

Yeah that was the point of  bailing out AIG in the first place.  It wasn't done for the sake of Ace Greenberg's pension.

Was no one paying attention when the first AIG bailout happened, and every major paper reported that Paulson's hand had been pushed by the European finance ministers?  Both the "retention bonuses" and the fact that Euro banks were into AIG for 10s of billions in contracts was already known in mid-September.

Either Congress is full of the biggest bunch of morons on the planet or there is a lot of faux outrage being thrown about.

Come to think of it, perhaps those two options aren't mutually exclusive.

[garbon]

Pfft. Having a Marty moment of your own? 

Not at all, comparing two discussions had on Languish that both involved "shorthanding" is not at all like a Marty analogy.

[garbon]

Either Congress is full of the biggest bunch of morons on the planet or there is a lot of faux outrage being thrown about.

Come to think of it, perhaps those two options aren't mutually exclusive.

[Malthus]

Your token statement though doesn't match up with your entire argument. If you don't know if they are irrational and unjust, why are you going on and on about them being irrational and unjust based solely on a generalized view of the system and its well known failures?

That si what is missing from this little witch hunt - and actual *specific* information about the retention bonuses and the specifics of the business case for them.

That doesn't stop the masses from calling for a rope though.

What "doesn't match up"? You claimed (using heavy sarcasm) I said something when in fact I provably said the opposite. THAT doesn't match up.

My argument is that there are systemic problems with corporate goverance. That is hardly a secret, or a call for a witch hunt.

As I've said (repeatedly now) the bonuses aren't in themselves the problem. At most, they may be a symptom of the problem - determining whether this is in actual fact the case would indeed call for an analysis of the business case.

However, it is hardly an unreasonable assumption based on the available evidence. Call it the civil standard, rather than the criminal. Balance of probabilities is that the payments were bad business.

What little we *do* know indicates that the market is not exactly jumping for financial types - the figures available show a projected 21% decline in employment in the relevant market (see my link above); much of this was known sone time ago. Maybe that market definition is over-broad and there is a real demand for these specific guys, I don't know (and I'm not claiming to know) - however, I haven't seen anyone else claiming that this is the case. Available information indicates that it is unlikely that execs from a failing business within an industry in deep trouble are unlikely to be in mass demand - but I'm no-where claiming the absolute certainly you ascribe to me.

[Neil]

That doesn't stop the masses from calling for a rope though.

And they'll get it.  I would imagine that the Democrats are hard at work writing legislation to tax those bonuses at 100%.

[Admiral Yi]

The self-dealing argument smacks of Marxist class analysis.  The simple overpaying argument is more reasonable, but like Berkut I don't know if AIG is paying just enough to retain people who will contribute to the bottom line or whether they're overpaying.  I am willing to defer to the Obama administration's decision on the issue, as long as he and his supporters accept any repercussions of their choice.

[Berkut]

Your token statement though doesn't match up with your entire argument. If you don't know if they are irrational and unjust, why are you going on and on about them being irrational and unjust based solely on a generalized view of the system and its well known failures?

That si what is missing from this little witch hunt - and actual *specific* information about the retention bonuses and the specifics of the business case for them.

That doesn't stop the masses from calling for a rope though.

What "doesn't match up"? You claimed (using heavy sarcasm) I said something when in fact I provably said the opposite. THAT doesn't match up.

No, you said a lot of things, one of which was "the opposite" then proceeded to argue consistently that in fact it was reasonable to assume these payouts are irrational. In fact, you proceed to do so in the very same post.

My argument is that there are systemic problems with corporate goverance. That is hardly a secret, or a call for a witch hunt.

As I've said (repeatedly now) the bonuses aren't in themselves the problem. At most, they may be a symptom of the problem - determining whether this is in actual fact the case would indeed call for an analysis of the business case.

However, it is hardly an unreasonable assumption based on the available evidence. Call it the civil standard, rather than the criminal. Balance of probabilities is that the payments were bad business.

What little we *do* know indicates that the market is not exactly jumping for financial types - the figures available show a projected 21% decline in employment in the relevant market (see my link above); much of this was known sone time ago. Maybe that market definition is over-broad and there is a real demand for these specific guys, I don't know (and I'm not claiming to know) - however, I haven't seen anyone else claiming that this is the case. Available information indicates that it is unlikely that execs from a failing business within an industry in deep trouble are unlikely to be in mass demand - but I'm no-where claiming the absolute certainly you ascribe to me.

Then you have not looked, since the AIG execs said precisely that, I said that, and even JR said that.

It is not a question of whether the people in question will be in "mass demand" it is a question of whether or not AIG needs them to stick around.

Perhaps they do not - but then, you haven't provided a single piece of specific evidence that the people who decided they did need them are wrong (who almost certainly no more about what IAG needs than either of us). You simply state that generally the system is broken, so it is not unreasonable to assume that the decision makers in question are acting either irrationally or even unethically.

My point is simply that it is foolish to just assume that based on the bleating masses bitching loudly about something that has been well known for months now. You can as well question every single decision made - but to what point? AIG has already turned over most of their top executives - should they fire some more just to make the people crying for blood happy?

I can think of no better way to make this worse than it already is than to start making specific decisions based on generalized observations without actual factual backing.

[Berkut]

At most, they may be a symptom of the problem - determining whether this is in actual fact the case would indeed call for an analysis of the business case.

However, it is hardly an unreasonable assumption based on the available evidence.

These two sentences do not work together. You state that determining if in fact the case would require an analysis of the business case. This is true, and is in fact MY point.

Then you go to claim that it is not unreasonable to assume it is the case give the "available evidence", which is strangely absent. You jsut said that it would "require" an analysis of the business case, then turn around and say that even absent said analysis, we can simply assume it anyway? based on what? The general observation that the system has serious problems?

huh?

[Jos Theelen]

http://www.huffingtonpost.com/aaron-zelinsky/larry-summers-stop-the-ai_b_175151.html

[Savonarola]

That doesn't stop the masses from calling for a rope though.

And they'll get it.  I would imagine that the Democrats are hard at work writing legislation to tax those bonuses at 100%.

Right you are:

Tax AIG Executive Bonuses, Dodd Says
As public and political outrage grows over $165 million AIG paid as bonuses to executives while taking billions in taxpayer dollars, some in Congress want to tax the bonuses.
By Trish Turner

FOXNews.com

Monday, March 16, 2009

"It's an idea very much at the embryonic stage," said Senate Banking Committee Chairman Chris Dodd, D-Conn., "You can write a tax provision targeted specifically at 98 percent of the taxable proceeds."

Dodd said that "doesn't violate the terms of the contracts," referring to legally-binding agreements that appear to preclude government action.

Senate Finance Committee Chairman Max Baucus, D-Mont., says his staff is reviewing such a proposal. He called it a "worthy" idea but said he needs to know more about how it would work.

Dodd says this is something that "could happen fast. We could write this tomorrow."

Rep. Carolyn Maloney D-N.Y,  the chair of the Joint Economic Committee, is also calling for a 100 percent tax on bonuses not related to commissions. 

In a letter she distributed to fellow legislators for co-sponsorship, Maloney introduces legislation that will instruct the Treasury and the Internal Revenue Service to develop guidelines that tax at 100 percent any bonus compensation that is not directly related to a commission for any recipient of TARP funds where the government is the majority owner of the company.

"For a company that has required $170 billion in U.S. taxpayer assistance and is 80 percent owned by the United States government, this is clearly unacceptable," said Maloney.

When asked if he plans to write legislation to limit the Federal Reserve's unfettered ability to lend money without strings attached, so as to prevent the situation with AIG from happening again, Dodd would not answer directly, saying only, "We need to look at that whole debate about modernization of the system ... they've got to do a better job."

Dodd says he plans hearings into the AIG bonuses. The senator said he was told about the controversy on Thursday.

[Berkut]

Oh my, that is just beautiful.