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Taxpayers Fund AIG Lawsuit Against US
AIG, now infamous for their executive bonuses, has decided that the $200 billion they received from the government is not nearly enough and is suing the government for the return of $306 million in tax payments. "AIG is effectively suing its majority owner, the government, which has an 80 percent stake and has poured nearly $200 billion into the insurer in a bid to avert its collapse and avoid troubling the global financial markets. The company is in effect asking for even more money, in the form of tax refunds. The suit also suggests that AIG. is spending taxpayer money to pursue its case, something it is legally entitled to do. Its initial claim was denied by the Internal Revenue Service last year."
Obama says "blame me", which is political-speak for "screw you, it's done, get over it". He won't be saying "blame me" when the honeymoon is over and this escalates to a full scale popular revolt.
We KNEW AIG were crooks long before we gave them this money. Why did they do it? Where the fuck was the outrage when these bailouts were first suggested? I've been outraged since the beginning, because the whole game plan has been obvious to me since they robbed us of that first $700B. And yet polls suggest that Americans STILL think this is going to work somehow.
These people: the Congress, the President, AIG, are all just a bunch of god damned frat boys, scratching each other's backs and doling out our tax money to each other in such staggering volumes that it WILL be the end of this country if we don't stop right now.
Did you all catch Chris Dodd saying he had nothing to do with the change in the bailout legislation to allow these bonuses, then the next day saying oops, that was me. "Somebody should have caught it sooner" - yeah, right, if the bill had any chance of being reviewed by the legislators themselves, let alone the public, before if slipped past Obama's desk quicker than a greased turd. What happened to those 5 days, huh?
Seriously people, at what point do we get off the couch and take back this country? Obama can stimulate my ass.
Today's XKCD seems particularly relevant. There's bigger things to worry about right now. This is a silly distraction -- like the whole "earmarks" thing.
What as stupid article!!
The US government, although the largest shareholder is not the ONLY shareholder. Minority shareholders have rights and a successful lawsuit benefits them too.
I wish people would give their heads a shake!
Are these guys intentionally trying to force Congress to shut them down? Too much more of this, and economy or no economy, lawmakers are just going to say "Fuck you, die die die" and let the international banking system take a nosedive.
I have been (somewhat) onside for giving Wall Street a helping hand, but between the sheer incompetence of the Democrats and the sense of entitlement of these guys, I think it's time to say "Screw it", let them all sink, and then rebuild it properly, with laws requiring all bonuses be voted on by shareholders, all executives and managers be forced to convert their stock to non-voting, requiring complete replacement of any company's board and senior executives the second they take a single penny of taxpayer money, and putting their legal departments under direct Treasury control.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Tru-Value states there has been a run on pitchforks.
There was a great article in Rolling Stone today that lays out exactly what has happened at AIG in terms most people can understand. It makes my blood boil!
-- Give me ambiguity or give me something else!
The income tax system has become so complex with so many loop holes the not even the Treasury Secretary could master it. The problem of tax loss selling in particular is set to explode. Time to replace it with something much simpler like Fair Tax.
We should set a new rule. When a company asks for .gov money to be bailed out, the top 5 layers of the company should be fired. No exceptions.
This is just beyond belief.
It shouldn't be. I was just thinking earlier that I was glad that media storms like AIG blow over slashdot, and I can get different news here then the stuff everyone else is talking about.
This has absolutely nothing to do with tech or nerdiness, and in the grand scheme of things, it isn't that important. I can see no redeeming value, and I hope in the future that /. manages to avoid being run over by "big" stories like this.
Sometimes bias is better than trying to be objective about something completely ridiculous. Call a spade a spade and get it over with.
Buckle your ROFL belt, we're in for some LOLs.
It's Stuff That Matters. I would presume that most of the people here to pay taxes, so I would presume they have a vested interest.
upon the advice of my lawyer, i have no sig at this time
That's essentially what is happening. The holders of AIGs debts are the real beneficiaries of the bailout. Instead of bankruptcy where they would fight for the scraps of the carcass, they are receiving 100% payoffs, some from the bailout dollars, and some from the ongoing liquidation of AIG assets.
Nerd rage is the funniest rage.
Don't blame AIG for trying to get their tax money back (perhaps the only money here that is rightfully theirs), or for paying their employees what is contractually due to them. Blame our politicians for bailing them out instead of allowing their failure.
Sounds like a classic case of the Aesop: The Farmer and the Snake.
During the fridge winter months, a farmer happened upon a snake frozen upon his grounds. Taking pity on the creature, he took it into his home to warm it by the fireside. Perhaps he realized they eat the rodents who would dig up his crops, and thus provided a dire function. Perhaps it was just the plain goodness in his heart. As the snake warmed itself and became animate, it leapt to forth and bit the farmer. As the farmer lay in pain (perhaps poisoned) he cried out, "Why have you bitten me, snake?!" I do believe the obvious answer was "Duh, I'm a snake."
Demented But Determined.
How are you going to support tech, without the money tied up in these banks? When these companies went belly-up, so did the stocks of IBM(tech), Dell(tech), Cisco(tech)... Tech can't innovate without investment; and there can't be investment without money. Also, many IT's have lost their jobs, or suffered cuts in salary, due to this mess and the fact that their tech companies' investments were wrapped up in this debacle. This problem is so huge, you could talk about it on epicurious.com and be justified.
Because we desperately need something to fill the time between now and the BSG finale.
First of all, it looks like it's happening anyway so saving AIG isn't worth it.
Second, AIG was to protect the mortgage originators from the borrowers defaulting. Well, that's happened. And instead of the mortgage originators taking the loss, AIG is. In other words, the systemic losses are being concentrated at AIG. What I'm saying is that letting AIG go bankrupt wouldn't harm the system. The losses would just be spread over the system and individual banks and partners would be taking the hit. It's a zero sum game right now. AIG is irrelevant; except for the bonus that tis executives say they deserve. I say let'em die. It will have no net effect on the economy. The damage is done.
They weren't bonuses - they were retention contracts. AIG didn't want everyone to jump ship so they offered retention contracts to key people. It's a VERY normal thing to do. The dollar amount may have been crazy - but they were NOT bonuses.
-Tolerate my intolerance
I'm curious how damage is being done to the company in loss of good will. I certainly wouldn't be surprised if the outrage caused by this lawsuit alone didn't cost them much more than $300M. I'm not sure whether the whole fiasco will cost them more than $200B, probably not, but I know many people who won't do business with AIG ever again if they can help it. Sometimes money grubbing is a bad business move.
Honestly, how did *anyone* not see this coming? For anyone that thought that the bailout was a good idea (and by anyone I mean anyone, regardless of political party or leanings), you're getting what you deserved. Unfortunately you're dragging the rest of us with you. What did anyone expect to happen? We took businesses with a *proven* failed operating plan, and gave them more money to "keep on keepin' on." We rewarded bad decisions and then all of a sudden, the still operating failure of a business (surprise!) keeps on making bad decisions and burning through capital faster than it takes it in. I know this is a logical fallacy, but damn! you had to be stupid to not see this coming. Anymore I just chuckle at the absurdity of this whole situation... we're getting what we asked for. I can't blame AIG for this, it is doing exactly what it has been doing-- f*ing up. But when we give them free money to keep on doing it, you can't blame them for thinking it might actually be good business.
So the gov't calls a shareholder meeting, replaces the board, and the new board quashes the lawsuit. They own 80% of the equity in the company. The government can do whatever it wants with AIG because it owns them.
Why is this lawsuit a big deal? Or rather, why does it still exist?
Advice: on VPS providers
"President Obama said Wednesday he'll "take responsibility" for AIG executives receiving controversial bonuses while the company took $173 billion in government bailouts."
I'm sure that since he has taken responsibility for the bonuses, Obama will personally repay the American taxpayer the $160+ million dollars.
Oh wait, this more like that other type of responsibility that Rumsfeld took for the crimes committed at Abu Ghraib, where the guy responsible doesn't face any consequences. Rumsfeld didn't do jail time for Abu Ghraib, low level soldiers did.
I agree that this is AIG actually trying to be a business that is responsible to its shareholders.
It is actually, now more then ever, in the government's best interest for AIG to make every attempt to go after any and all money it can, from all sources.
People were ticked off when they viewed AIG's actions as SPENDING money. Now they are ticked off when AIG is trying to GET money.
Public perception is a b*tch
[disclaimer: I am not a fan of AIG, and I believe that all upper management should have been fired without severance packages. I just think this particular uproar is a case of "everything the bad guy does is evil"]
You mean they were responsible up till this moment? Ok.
Lets not over-generalize here, looking at this whole issue unemotionally (yes that's hard I know, we're talking about accounting here, a very contentions topic) if you borrow money from someone you will use every method at your disposal to pay it back, including by offsetting previously unsettled amounts.
If you lent me $10 last week and now you borrow $20 from me am I wrong if I only pay you back $10?
Come on let's try for a moment to remove the emotion from this topic (yes that means you also moderator), and remember that the people working over at AIG are actually PEOPLE. Lets exclude that top few percent of (failed) execs who got the company into this position sure, but it could be my neighbor, your school mate, whoever who is left with the actual work of getting it out of this mess!
Anyone who has every worked in a big company knows exactly how hard it is to continue justifying those 50+ hour weeks you're pulling for your stupid manager when the company gets some bad press that reflects on your hard work! What needs to be advocated is more management change in AIG, not blaming Joe Plumber's neighbor because he's a good tax accountant working for AIG!
I gave up my mod points already assigned in this topic because it was clear nobody was willing to discuss the other side of this, hopefully some of the moderators left out there want to see some balance.
There's a known solution to this problem. In the 1980s S&L collapse, the Office of Thrift Supervision established the rule that S&Ls taken over by the Government couldn't sue each other or the Government. It just burned up legal fees, since the money came out of the same pocket. Congress needs to enact something like that this time.
Or, at the very least, a televised kick in the balls.
We could make it a game show, with a national lottery at dollar a ticket for the chance to be the one doing the kicking. Ad pricing could start at Super Bowl levels for the first episode, and double for each subsequent show. The money from the lottery and ad buys could be used to buy up the toxic assets, or buy out the predatory mortgages and relocate the victims into something actually affordable (in Florida).
It'd be a multi-win scenario. The public would get to vent its anger, the CEO's would learn a sharp, public and valuable lesson, and the corporate glass ceiling would be shattered as a host of women get sudden promotions to positions of power.
I'm not tense. I'm just terribly, terribly, alert.
Seriously, if you have a sick and injured animal, you try to help it recover. But if that animal is deemed unfit to coexist with people and other animals... like food aggression, attacking people, or literally biting the hand that feeds it...
Well, that animal needs to be put to sleep.
It's irrelevant what the $$ amount is, if the sole purpose of the company now is to keep sucking money into it's expenditure hole and apparently tossing back up this kind of behaviour.
Even if the company survives the economic issues we're living in, would the company itself be viable as a service company, given the kind of image/pr suicide it's been committing?
Forget about too big to fail. Let's start looking at companies that are too tained/corrupted to be allowed to succeed.
Winged Power Photography
Majority owners can't actually do "whatever they want" unless they actually own 100% of the company. The trouble here is that the 20% minority owners are something of an annoying fiction--- the company is by rights bankrupt and the shares worthless, but the government has unwound this mess somewhat ineptly and as a result on paper the company still exists and has value, and 20% of that value is owned in the private sector by people who technically the company has a fiduciary duty to.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
It's just like the story of the grasshopper and the octopus.
All year long, the grasshopper kept burying acorns for winter, while the octopus mooched off his girlfriend and watched TV.
But then the winter came, and the grasshopper died, and the octopus ate all his acorns. Also, he got a race car.
Is any of this getting through to you?
What is this modded +5 insightful?
I've read the parent post a dozen times now, and it makes less and less sense every time I read it.
The president and congress have no problem inciting mob rule and violence? WTF? You honestly believe that? Exaggerate much?
We have a president going on a comedy show, doing town hall meetings, because he is continually trying to stay in communication with the people... you know... that mob that SHOULD rule the country.
About "disingenuously declaring shock"... he has to for political reasons of course... but if people were being intelligent about this, we wouldn't care.
170 million is a drop in the bucket, is standard business practice, without the bonuses AIG despite having money would cease to function, as its employees would leave.
I keep hearing "why are we giving bonuses to people that caused the mess". AIG's employees caused the mess? Really? They were doing what everyone else was doing, and what was working very well for a very long time. If they didn't do "what caused the mess" they would have been fired.
This is very similar to the IT sayings like "no one every got fired for choosing IBM" "or microsoft", etc.. it was standard business practice to do what they were doing in almost every major financial institution.
Is it risky to base your entire IT structure on one vendor controlled platform? Sure. Do people do it anyway and stay succesful? Yup.
It is hard to pickup all the nuances of your post, due to your limited language skills, so I doubt I understand most of your ranting...
Perhaps I don't understand what "ownership" means. If I "own" an 80% share in a gas station, and the gas station is suing someone, I have the right to call up the station and say "drop the lawsuit, and fire whoever thought of the lawsuit". By the same logic, a representative of the Federal government should be able to personally order the person who is responsible for this suit fired immediately.
By a similar reasoning, if I own 80% of the business, and there is some question over whether an employee is owed a large bonus, as owner I can say "nope, don't pay the bonus". Even if my order violates a written contract, the employee would have to sue to get their money. And there's unlikely to be a single jury in the United States that would allow AIG execs to collect a few million dollars in return for making financial decisions that have destroyed the savings of millions of people.
There at least some public debate about the 700 billion.
How about the 9.7 trillion? 9.7 trillion is a lot bigger than 700 billion.
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aGq2B3XeGKok
Only the stimulus bill to be approved this week, the $700 billion Troubled Asset Relief Program passed four months ago and $168 billion in tax cuts and rebates enacted in 2008 have been voted on by lawmakers. The remaining $8 trillion is in lending programs and guarantees, almost all under the Fed and FDIC. Recipients' names have not been disclosed.
Here everyone, look at the wookie's little friend. Oh you'd rather look at the wookie? That's OK too!
Why are U.S. taxes being handing money to foreigners?
May be because AIG owed them a buck or two?
...a stunned silence fell upon the hall.
That's really misapplying the term "gambling". Gambling is defined as money, or anything of value, that is risked for possible gain. The important thing here is the "gain" part. You are betting something, hoping to make an over all gain. That's not the case with insurance. When you insure your home, you are not hoping to make a gain on it. If your home burns down, they don't pay you a hundred million dollars, they pay you the value of the home and its contents (or the limits of the policy, whatever is less).
You aren't gaining anything, and you certainly aren't hoping that it'll happen. What you are doing is transferring risk. You cannot afford to pay out the cost of a new house. Thus the risk of losing it isn't acceptable. So you purchase insurance. They agree to assume the risk. Should the house be destroyed, they pay for it, you don't. In trade for that, they collect regular monies and get to keep them if nothing goes wrong. Your insurer may in fact then do the same thing. They might assume the risk for small things, but transfer the risk for a large event to another insurance company that specializes in that.
That's all insurance is. It isn't gambling, it is risk transfer. That is also why there are cases where it is advisable to NOT have insurance. For example if you have a car that is old and has a low book value, collision insurance is a waste of money. If you wreck the car, you can afford to replace it. Thus there's no reason to transfer the risk, just assume it yourself. Also the amount they charge is such that after awhile, you have already paid out anything you'd get.
So no, it isn't gambling. Gambling is what you do in a casino. If you don't see a difference between that and insurance, well then you need to do a bit more research.