Treasury Will Use $30B Infusion To Compel AIG To Repay Bonuses

Wall Street Journal:

President Barack Obama, trying to contain a political firestorm, instructed Treasury Secretary Timothy Geithner "pursue every legal avenue" to block $165 million in bonuses to AIG executives who were in part responsible for the company's near collapse.

"This is a corporation that finds itself in financial distress due to recklessness and greed," Mr. Obama said ahead of announcing a plan to rescue small businesses through a raft of new lending options. "Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?"

Read the whole story: Wall Street Journal

Comments

[Tackora]

That is a great idea! Pay $30 billions to get back $165 millions. I am so happy that President Obama is so much smarter than preident Bush was.

[SteveDenver]

"...the administration said it will use a $30 billion installment of bailout funds approved March 2, to bring some pressure to bear on AIG. The official said before AIG can draw down funds from the $30 billion, new rules would be written into AIG's contract to ensure no government money goes toward paying financial-products division bonuses. The cost of bonuses already paid would be recouped for the taxpayer."

Instead of limiting access to the $30 billion, why not cut it off here. Don't pay bonuses or there is no more money. PERIOD.

Nationalize banks for a short time and improve lending to qualified borrowers. Our business almost went under last week because a bank decided to sink our operating line of credit without notice and for no reason. The institutions being propped up are the problem.

[idisVA]

Why not consider design a new instrument made up of all the AIG traders, repackage them and sell them off to China.

[SteveDenver]

Why not herd AIG into a high rise and fly a plan into it?

[munki]

No need to infuse money...

Just underwrite a policy backed 70% by US Treasury and NO CASH...

If money gets transferred into AIG...

All

IS

GONE

again and again...

[anothervoice2]

The WSJ reports that WS is figuring out new ways to circumvent the compensation limits in the new TARP bill:

http://online.wsj.com/article/SB123724826580949187.html#mod=testMod

[Cherubim]

When President Obama didn't pick John Edwards for
his U.S. Attorney General, I was afraid there would be no one
in his Administration with the "Guts" to go after these
Con Artists, and I was right.

[ErnestineBass]

Rachel Maddow on Letterman...now.

[Ladywolf55]

Yhe money can't be blocked, because it was ALREADY PAID on FRIDAY. President Obama knew this when he made his speech about "blocking" the bonus' today. Believe me, I've been a loyal supporter of the President, but this is very telling news. We've been had, America. Our entire government is being controlled by the Corporate Masters. We're their indentured servants.

[PhilipTaylor]

AIG Bonuses are BS SMOKE SCREEN by AIG, Bernanke, Geithner, and others!

CENTRAL PROBLEM: GET credit Flowing to Americans!

If that is GOAL then let the Government open up direct LENDING Via telephone or the Internet to Small Business, Students, and Consumers at low RATES and FEES!

All Geithner and Bernanke are doing is saving the Banks and FEATHERING THE NEST OF THE ELITES they work FOR!

NOT ONE CEO has Been FIRED, INVESTIGATED, FINED, or PROSECUTED!

All this BS about 1% is to stop Americans from seeing the Continuing $BILLIONS going to these Corrupt Banks and AIG! Corrupt FED/BANKS still in control of Printing and Controlling OUR Government and making us the Largest Debtor Nation on Earth!
__________­__________­__________­__________­__________­__________­__________­____

The Fed/Treasury used $52.5 billion in off-balance sheet financing, $30 billion is a loan to Maiden Lane III LLC, an entity formed by NY Fed/AIG to purchase AT MARKET VALUE $64.7 billion face value of "super senior" CDO tranches on which AIG wrote CDSs to terminate CDS agreements.

So Banks received a huge windfall on their CDOs at PAR, instead of owning illiquid securities worth pennies on the dollar.

http://johnappel.com/2008/12/12/aig%E2%80%99s-bailout-needs-a-bailout-a-150-billion-problem/

Why should Goldman, Morgan, BofA/Merrill, Citigroup, foreign Banks, and other Banks, who clear committed crimes get Funds from the AIG Bailouts?

From this it appears Geithner/Bernake are "IN BED with the Banksters" when they should be representing Taxpayers' Interests.

[IntelligentDesign]

The fundamentals of bad guys paying the piper are strong - the correlation of this trend to Republicans losing power is nearly perfect.

[Lavafalls]

The insanity of the fundamentalists are strong?

[kellygrrrl]

LyneesSapp­h!cS!sters
http://en.wikipedia.org/wiki/Sisters_(Lynne_Cheney_novel)

hmmmm!

[123dee]

interesting thanks for sharing

[lornejl]

When big business scr ews up, we all get scr ewed. When I scr ew up, only I get scr ewed. Something is scr ewy.

[lornejl]

When big business scr ews up, we all get scr ewed. When I scr ew up, only I get screwed. Something is scr ewy.

[kotexbarbie]

I agree with Bernie Sanders, the senator from Vermont, "If a company is too big to fail, it's too big to exist." Meaning, if its success is vital to the stability of society, then it should be under government control so that it acts in the public good (the police, for instance). Otherwise, break it up and make it smaller like we did with the phone company years ago, so if it fails the economy doesn't collapse.

The bailout of AIG was crafted under Bush, so of course it was co r r up*t and ins in cere. But the latest payouts have come under Obama, and his administration (particularly Tim Ge ith ner) have not held AIG or the banks accountable. When government gives taxpayer money to private corporations, we should place conditions on what it is used for. I've read that AIG thought the Treasury Dept. was going to do that and were surprised that they didn't. If you want to be generous, you can say that AIG had legal contracts to pay out those bonuses and could be sued if they didn't. But if the government had ordered them not to, they would have an excuse to break those contracts. Since Obama/Gei th n er didn't say no, AIG went ahead and paid the bonuses.

[lornejl]

If I don't live to see the day that D arth is in s hackles, can I please see the day when someone in the media pins his @ss against the wall ?

[magibrotherhood]

Gibbs took a pretty good jab at him today

[KeepMeLearning]

I want Jon Stewart to have a go at him!

[lornejl]

Face to face ?