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

[MadImmortalMan]

ex post facto

[DGuller]

IMO, the stupidest reaction by far is calling for suicides of the AIG executives.  There is a lot of money to be made in staging public executions of AIG executives, and AIG does need to pay back the US gov't somehow.

[Berkut]

Hell, we own AIG now, right?

If we think the bonuses show terrible management, why don't we just fire the terrible management?

That would make everything all better....right?

[MadImmortalMan]

IMO, the stupidest reaction by far is calling for suicides of the AIG executives.  There is a lot of money to be made in staging public executions of AIG executives, and AIG does need to pay back the US gov't somehow.

Now, you're talking. Pay-Per-View executions for the masses.

[Neil]

Oh my, that is just beautiful.

From this day forward, the power of taxation will not be a necessary evil, employed in order to give the government the monies to operate the programs that Americans want or need.  Instead, it will be a weapon to punish those whom Congress feels have sinned.

After all, those executives did such a bad job, why not tax their salaries as well as their bonuses at 100%?

[Jos Theelen]

WASHINGTON (MarketWatch) -- Failed insurance giant American International Group Inc. paid "retention" bonuses of more than $1 million to 73 employees, including 11 who no longer work at the company, New York Attorney General Andrew Cuomo said Tuesday as political and public anger over the bonuses mounted.

Retention bonus for people who don't work at the company anymore?  ???

[Admiral Yi]

Hell, we own AIG now, right?

If we think the bonuses show terrible management, why don't we just fire the terrible management?

That would make everything all better....right?

I think we own preferred shares, which if I understand correctly means we don't have a say in managing the company.

[Berkut]

Hell, we own AIG now, right?

If we think the bonuses show terrible management, why don't we just fire the terrible management?

That would make everything all better....right?

I think we own preferred shares, which if I understand correctly means we don't have a say in managing the company.

No problem, Congress can just pass a law saying that THESE preferred shares get a vote.

In the interest of the public good, of course.

[Berkut]

WASHINGTON (MarketWatch) -- Failed insurance giant American International Group Inc. paid "retention" bonuses of more than $1 million to 73 employees, including 11 who no longer work at the company, New York Attorney General Andrew Cuomo said Tuesday as political and public anger over the bonuses mounted.

Retention bonus for people who don't work at the company anymore?  ???

I love the careful language there that implies that people got bonuses after they left - rather than what it really says, that people got bonuses and THEN left.

[KRonn]

http://www.foxnews.com/politics/2009/03/17/recover-aig-bonuses-lawmakers-scramble-undo-protections-approved/

To Recover AIG Bonuses, Lawmakers Scramble to Undo Protections They Approved
Though Connecticut Democratic Sen. Chris Dodd is among those leading the charge on retrieving AIG bonuses, an amendment he added to the $787 billion stimulus bill last month created a roadblock to getting that money back.   

Hehe....   

Well, I don't like the bonuses but I don't like Congress's talk of heavy taxes on them either. As much as bonuses annoy me I'd have to think that short sighted attempts at preventing or taxing them, as posted earlier in this thread, makes some of us feel better, but it smacks of govt highway robbery added to the equation.

Congress helped make this financial mess, some of them probably blocking efforts at reform. And I think Dodd is one of them. Hmm.... Dodd, just go away anyway.

[The Minsky Moment]

Hell, we own AIG now, right?

If we think the bonuses show terrible management, why don't we just fire the terrible management?

That would make everything all better....right?

I think we own preferred shares, which if I understand correctly means we don't have a say in managing the company.

The preferred are convertible into common at the Treasury's discretion.

The reality is if the Treasury says jump, AIG management has to say "how high".  Treasury may choose not to exercise that power, but there is no question it is there.

[Admiral Yi]

The preferred are convertible into common at the Treasury's discretion.

The reality is if the Treasury says jump, AIG management has to say "how high".  Treasury may choose not to exercise that power, but there is no question it is there.

What's the deal on preferred anyway?  What function does it serve?  And why did the gubmint opt for taking preferred stakes in the financial sector?

[The Minsky Moment]

The preferred are convertible into common at the Treasury's discretion.

The reality is if the Treasury says jump, AIG management has to say "how high".  Treasury may choose not to exercise that power, but there is no question it is there.

What's the deal on preferred anyway?  What function does it serve?  And why did the gubmint opt for taking preferred stakes in the financial sector?

Preferred is a more senior form of equity - in a liquidation, the preferred are usually entitled to 100% before the common gets a penny.  Typically preferred stock has a minimum fixed divididend (ie a lot like a bond coupon) - the dividends on the preferred have to be paid out in fill before any dividends can be declared for the common.  Some preferred have "accumulation" rights - if the company is short on a dividend payment to the preferred - the shortfall is added on to the next quarter's obligation (accumulates). 

The government doesn't want to take control of day-to-day management, but it does want to get a financial return, rank ahead of the common shareholders, and reserve the right to fully take over if it wants to.  Preferred gives them all of that.

[MadImmortalMan]

But preferred is not voting stock, right? And it usually has a fixed return not subject to normal dividends. It's kinda like a half-stock half corporate bond. The treasury would have to convert it to common in order to have the control to fire the execs I think.

[stjaba]

From MSNBC:

House and Senate Democrats are currently crafting separate bills to tax up to 100 percent of generous bonuses awarded by companies rescued by taxpayer money.

AIG would not be the only firm named by either Democratic bill, but there was no question whose executives inspired the legislation.

"They're not going to get the financial benefit of those bonuses," said Senate Finance Committee Chairman Max Baucus, D-Mont.

In the House, Reps. Steve Israel, and Tim Ryan, both Democrats, introduced a bill that would that would tax at 100 percent bonuses above $100,000 paid by companies that have received federal bailout money.

Couldn't this cause a massive exodus of employees from companies that receive federal money? How can that possibly help companies that are on the brink of failure?