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

[Malthus]

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?

Once again, you just aren't reading. Shit, the information you seek is in the very next paragraph.

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.

[Malthus]

Then you have not looked, since the AIG execs said precisely that

Oh yeah, an unbiased source.  :

I said that

Wait, *you* have made a positive pronouncement on the issue? Based on *what* exactly? Have *you* by chance done an analysis of the business case? Where is *your* data to back up your position ... ?

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.

Surely the one is key to the other. If there are no jobs available, then the company has a lot more bargaining power because the fear that these guys will be tempted away is less.

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.

Damn it man, must you simply refuse to read what I actually write?

From me:

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)

You repeatedly take the position I'm saying, well, the opposite of what I'm saying, and then getting mad at *that*.

I'm saying that, given what we *do* know, it isn;t an unreasonable assumption, and so far you haven't provided a scintilla of evidence to the contrary - other than a rather astounding level of quite unearned deference to the execs in question.

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.

I'm not basing anything on the "bleating masses". I'm making the rather commonplace factual observation that, absent special circumstances, execs of a failing company in a failing industry where estimates are that over 20% of the workforce are going to be turfed from their jobs are hardly in a position to extract "retention bonuses" under normal market conditions. I fully accept that there may be cases where the execs in question are specialized or talented above the norm so that they would be in demand in spite of the general situation, but current performance of the company at issue hardly suggests that such valuable and unfungable talent was widespread at the place - and other that the execs themselves (and you!) I haven't seen any evidence that these particular guys were in such high demand. Maybe some exists and we will see it, if this story has legs.

[KRonn]

Now, I'm starting to back off of the bonus stuff a bit, seeing it still as egregious in some cases but small doings and more like noise to deflect attention from the real issues. I'm becoming more disturbed with Congress members, bleating and railing against the AIG execs, or other business excecs. Yeah, the execs deserve some heat. But Congress made the policies, for years worked in conjunction with the industry. The bailout even had language to protect bonuses, and either these bonuses were known about for a while, and/or other bonuses had been given earlier. But now, as people get more angry, my take is that Congress comes out hard and tries to look like the outraged victim here. I do get that many Congress members are genuinely angry, but they better get braced for a lot more anger as some of the stuff in the various bills that have been signed come to light, rushed through without much debate or even being read by most of them!

And just think, Congress can't figure out how/why/where bailout money was spent. Yet the "Stimulus" bill contains massive amounts of public works project money for states and cities. Anyone care to guess how that's going to go along? Lol.. I envision a lot of small scale Boston Big Dig type projects.

[KRonn]

A couple of links I found interesting, partly because of what they tell about the importance of saving AIG, and how much they do affect.  Also, interesting about the feeding frenzy that may affect investors that are needed to buy into AIG or other bailed out corps to insure success going forward.

http://www.msnbc.msn.com/id/29767653/
How the Fed failed to tell Obama about bonuses
Last-minute disclosure of AIG payouts exposes problems in key relationship
----------------------------------
http://www.msnbc.msn.com/id/29749994/

AIG firestorm raises alarm for other firms
Backlash threatens federal efforts to draw investors into recovery programs

[alfred russel]

The notion that there is a need to pay large bonuses to keep on key execs of organizations which are only kept alive through large infusions of taxpayer cash during a mega recession lacks somewhat of an air of reality.

The impression is that the management - the same management that ran these companies into the ground - is, in effect, drafting these contracts to itself while wearing its (collective) "management" hat, and then gratefully accepting such deals while wearing their (individual) "employee" hats, in effect looting the corpse (or better, the body in a coma on public taxpayer life support) while the looting is good, knowing that if they get the axe chances of further employment on such lucrative terms elsewhere is slim to none in this economy.

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.

It will be a tough sell given recent history, though.

Malthus, whether or not it has an "air of reality", it is reality. There have been significant defections of key AIG personnel, a few of which I posted earlier in this thread, and there are currently aggressive recruiting efforts aimed at AIG workers.

Should that really be surprising? AIG was the premier company in its industry. Think about it from your perspective: if a couple of partners at your firm made some dubious decisions so that firm management was assumed by the government, even in this economy do you think there would be significant turnover if: pay packages were significantly reduced, large parts of the firm were about to be sold off or dissolved, pay that had already been given for services that were rendered was being clawed back, the firm was demonized by politicians and the press, and the government was bent on getting the names of employees into the press in an atmosphere where there are death threats coupled with "tour groups" visiting the homes of associates.

[The Brain]

Think about it from your perspective: ... the firm was demonized ... in an atmosphere where there are death threats coupled with "tour groups" visiting the homes of associates.

He's a lawyer. It's his reality.

[alfred russel]

Think about it from your perspective: ... the firm was demonized ... in an atmosphere where there are death threats coupled with "tour groups" visiting the homes of associates.

He's a lawyer. It's his reality.

If there were tour groups visiting the homes of lawyers in Toronto, the tour would be longer than most activists' attention span.