Formaldehyde
Both Fair And Balanced
The person who wrote the letter obviously was. And I bet he wasn't alone.
AIG Executive Resigns
- Thread starter general_kill
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The person who wrote the letter obviously was. And I bet he wasn't alone.
Possibly a few were. Particularly those that gave up their salaries. But giving up a salary when they expect the bonus to be bigger than the salary is an act of cynicism, not an act of altruism. Once AIG began to melt down, some of the people who did not get fired or jump ship certainly did have an opportunity to go above the call. But in general the traders before the melt down began did not.
That said, the bonus mess was a mistake that had a lot of participants. The original execs designed the bonus system that had perverse incentives for the health of the company. Those who gave up their salaries really should have kept the salary and given up the bonus in the first place. The government, when offering the bailout, should have been clearer on what would be allowed or not allowed, the elected officials that made a big deal of it after the fact should have just accepted a done deal for a done deal. So plenty of blame to go around.
Formaldehyde
Both Fair And Balanced
Only if you completely misunderstand the bonus scheme which I have patiently tried to explain.
Based on what? Once again, we aren't talking about the business unit that screwed up here. You do realize AIG is a HUGE company, right? That the people we are discussing had absolutely nothing whatsoever to do with the business unit that failed, right? That they continued to perform their jobs and make a profit while their company is on the brink of bankruptcy, right?
Once again, based on what? Your own morals and personal judgement based on incomplete knowledge of how these sort of companies even work?
Then they likely would have quit because the salary alone isn't near enough incentive to do what they do for a living.
It wasn't their place to "allow" or "disallow" it. These people had binding contracts. Furthermore, this has been known all along by anybody who actually has a clue how brokerages work. It has even been in the news for months now.
Well, not really. You continue to blame the wrong people in this particular case. Blame your congressmen for not educating themselves how businesses actually operate before they purchase 80% of them. Blame the president for engaging in a knee-jerk reaction instead of explaining to the American people they were being irrational. Blame the American people for being irrational and refusing to understand the facts. Blame everybody but the victims of this witch hunt.
Mise
isle of lucy
I'm happy with not calling what AIG employees are receiving "bonuses".
Formaldehyde
Both Fair And Balanced
Yeah. Commision would be a lot closer to the truth. At least then all the salesmen would understand...
It's so unfair. An executive vice president of a failed company whose job was saved because the government committed billions of dollars of public money to keep the company running had to face some criticism. And he worked 12 to 14 hours a day! Like millions of other Americans who don't get $742,000 (after tax) bonuses, and might get fired for any reason, including if their company fails. Of course, Mr. DeSantis's company failed and he didn't lose his job (or his $742,000-after-tax bonus), but some people are angry at him. So he's not going to work! He's going to give up the job that paid him a $742,000-after-tax bonus, because he doesn't only deserve to keep a job at the failed company for which he worked, but because people shouldn't hurt his feelings.
Honestly, he does make some good points, especially about how the AIG executives unfairly became scapegoats. But how impossibly stupid does this guy have to be not to realize that he's going to look like a complete tool for writing this? How can he be so ignorant about the world not to realize that nearly every other person in the world works under worse conditions that he does, with no financial security to back it up? How can he be so tone deaf to the public mood right now?
Cleo
Honestly, he does make some good points, especially about how the AIG executives unfairly became scapegoats. But how impossibly stupid does this guy have to be not to realize that he's going to look like a complete tool for writing this? How can he be so ignorant about the world not to realize that nearly every other person in the world works under worse conditions that he does, with no financial security to back it up? How can he be so tone deaf to the public mood right now?
Cleo
Formaldehyde
Both Fair And Balanced
You mean like every other tone-deaf person who didn't also take a massive pay cut due to acts completely out of their control?
And how about yourself? How much income are you forsaking this year so you won't be labelled tone-deaf by those who make less?
And how about yourself? How much income are you forsaking this year so you won't be labelled tone-deaf by those who make less?
Wow Cleo, you're doing exactly what Inno is doing. Missing the point.
He didn't write this for sympathy but to point out how AIG strung them along this whole time only to cave to populist pressure at the very end. And if you can't extrapolate the implications this has, then you're clearly out to lunch.
There are millions of people in the United States right now who have taken "massive pay cuts" due to acts completely out of their control. They lost their jobs. They weren't offered their jobs back (despite the failure of their parent companies), but then quit because they didn't want to work without the bonuses. Surely you can see how his statements would be "tone deaf?"
I don't get it. I'm not forsaking money, but I'm not a millionaire who's complaining about losing his bonus while millions of people in the United States lost their jobs entirely because (in part) of actions taken by other people in the AIG Financial Products division. If he just pocketed taxpayer money and kept quiet, I wouldn't be calling him "tone deaf." It's not the injustice of the situation, but the complaining.
I guess I'm out to lunch, because I can't "extrapolate the implications" of this.
By the way, he never said that he didn't know about the CDS crap that made his division the most "profitable" in the company, undoubtedly resulting in his receiving millions of dollars in bonuses in the preceding years, only that he wasn't "involved in -- or responsible for" them. Although I suppose it's possible that he was an executive vice president who had no idea what other people in the AIGFP division were doing -- no idea why his division was seemingly printing money for a few years. (Joseph Cassano and a number of other AIGFP execs have lawyered up, by the way. I wonder if Mr. DeSantis has retained criminal defense counsel.)
Cleo
Mise
isle of lucy
The CDSs probably weren't particularly profitable, Cleo. Remember that, when they were taken out, they were taken out on supposedly virtually risk free, and therefore very cheap to insure. CDSs taken out on Bear Sterns or Lehman Bros were also likely to be very safe bets at the time, and thus also very cheap to insure. I doubt that the CDSs that are causing collossal losses now were also the cause of massive profits in the boom years.
The guy is saying, and it appears to be true, that his division is blameless for the meltdown of AIG and was profitable.
While alot of people are losing their jobs and money, only the AIG folks were singled out by the government as evil and were the target of a popular hysteria and witch hunt. The freakin' president went on TV faking outrage at those people, prosecutors wele pledging to "name and shame" them.
Furthermore, he gave up his salary not because he is an altruist, but because he was promissed another form of pay and he deserves that payment. Anyone would get angry when that payment is confiscated. The situation is worse because now he is the victim of a modern day witch hunt.
Mise
isle of lucy
He wasn't so much upset at the payment itself being confiscated (he is perfectly happy without the money, as any millionaire banker would be, so he's giving it all to charity anyway), but rather the message that his boss is sending, and the lack of support his boss is giving to him. You can't do your job without the support of your boss, no matter what level you work at.
He is also criticising the way politics has gotten in the way of the operation of the business.
He is also criticising the way politics has gotten in the way of the operation of the business.
innonimatu
the resident Cassandra
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I see we don't lack amateur, wannabe psychologists here!The letter makes it very clear that the bonus was only to be given away because of the "atmosphere of fear" surrounding the bonuses. That's not humanity, that's frustration and a weird need for attention. Now, if you could show me that the individual in question had a history of giving away previous bonuses...
I see no reason why he deserves a bonus in the first place. The company he works for is bankrupt. It keeps losing money. and still the executives, of whom he is part, attribute themselves bonuses! Bonus, that's the word. A bonus is supposed to reward something out of the ordinary. Now, I don't argue that AIG's situation isn't out of the ordinary... but rewarding people for it?
And how much of a genius does it take to keep losing billions? Such genius that they believed they deserved over $700000 in the first place?! How long will zombie AIG be driven? So long as its executives could keep rewarding themselves for it, surely!
It it was a wage, then let them call it a wage, and contract it as such. Or is that inconvenient for some reason I don't know?
If they call it bonuses, I call it theft. 20 years ago if the executives drove a company to bankruptcy while, in the process, they attributed themselves millions in bonuses, it'd be called fraud. Now... it's normal!
And people think this crisis is going to end anytime soon? Not while they think this way!
The guy claims that "his division made money". So we have his word for it (how much is the word of a trader worth nowadays, anyway?). Speculators always make money when markets and irrationally inflating prices. It's that very activity which creates the unsustainable "bubbles", and the inevitable crisis.
Um, guys . . . politics "got in the way of the operation of the business" when the government kept AIG from failing. AIG would not exist but for the government.
luiz,
And I pointed out that the AIG guys were unfairly treated as scapegoats. But it doesn't mean that Mr. DeSantis isn't tone deaf.
In some respects, there is a witch hunt. But in other respects, a lot of these guys actually are witches.
Cleo
luiz,
And I pointed out that the AIG guys were unfairly treated as scapegoats. But it doesn't mean that Mr. DeSantis isn't tone deaf.
In some respects, there is a witch hunt. But in other respects, a lot of these guys actually are witches.
Cleo
The grave issue here is that the american government didn't even try to separate the witches from rest. They deliberately burned everyone as a way of scoring cheap political points. I find the notion of a democratic government using such "moral lynching" techniques to be repulsive and extremely grave. Many people don't seem to see the big deal, but it's pretty damn big.
Mise
isle of lucy
I said "politics" not "politicians".
What, you think you're going to stay out of politics when you're owned by the government?
Formaldehyde
Both Fair And Balanced
Nope. Not in the least. He apparently saved the US taxpayers hundreds of milliions, if not billions, of dollars already by helping to find a buyer for one of their subsidiaries at a reasonable price. In fact, I'd suggest that those who are burning him at the stake are the truly "tone deaf" ones because it is completely irrational, at least as far as I'm concerned.
Once again, AFAIK, he and the other people who are receiving bonuses have not 'pocketed' a single dime of taxpayer money. Their business units still apparently made a profit last year, so why shouldn't they receive compensation which was legally due to them instead of essentially working for free for taxpayers who want to lynch them?
I would have to admit that is at least a viable complaint. If he has indeed made millions in the past on CDS business, then he should probably take a slightly different tone. But I certainly don't know if that's true or not. AFAIK, his bonus was based strictly on his own activities instead of others, which is the typical arrangement. And until I find out otherwise, I'm still going to view him and the others as being the victims of irrational mobs.
Mise
isle of lucy
No, I don't think that. I thought they could have been grown ups and avoided the populist witch hunt though.What, you think you're going to stay out of politics when you're owned by the government?
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