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AIG Contemplates Joining Stockholder Suit Against US Gov't
inode_buddha writes "After completing its bailout rescue and paying back the money with interest, AIG is considering suing the US Government for doing so. The reasons why? Among other things, the 14% interest rate paid to the government. 'The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation." The former CEO and current major shareholder said: "The government has been saying, 'We're your friend, we owned and controlled you and we let you go.' But A.I.G. doesn't owe loyalty to the government," a person close to Mr. Greenberg said. "It owes loyalty to its shareholders."' The lawyer representing him is none other than David Boies of SCO fame."
For not putting any of the criminals responsible for the financial collpase in prison where they belong. Now those same criminals are suing the government. Sadly the US taxpayer will once again be on the hook for the payout.
They were perfectly free to reject the taxpayer bailout and look for money elsewhere.
Will someone put these motherfuckers against the wall and shoot them already?
Give me Classic Slashdot or give me death!
Fuck You, you greedy parasitic assholes.
Shoes for Industry. Shoes for the Dead.
The thing is though that it wasn't a waste of money. We got a stinking big profit out of it.
Not only that but we saved a metric fuckton of money on things like pension insurance, deposit insurance and unemployment benefits that we would have had to pay out if they had gone tits up.
Employees always come before creditors in bankruptcy, even "secured" creditors.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
If you think this is an anti-Obama thing it isn't as it would be equally as terrible if a Republican did it.
I wish the Republicans did it.. that way there would be a legion of people complaining about it today.
Instead, the Democrats did it. Lets see what the legion has to say now.
"His name was James Damore."
The thing is though that it wasn't a waste of money. We got a stinking big profit out of it.
That's "The Seen". What else didn't happen because all that money was diverted to AIG? That money doesn't come out of thin air - it's either taxed or inflated. If taxed, people don't have the money to spend directly. If inflated, people are paying more for everything and (in a constant-level-salary environment) decrease their spending elsewhere.
How many, e.g., dance studios, went under because families had to cut back on extras because their grocery bill went up by 50%? These diffuse long-tail effects are what Bastiat termed "the Unseen" and are always ignored by politicians because the People let them get away with that.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
What a bunch of ungrateful bastards.
AIG's stock had fallen 95% in a matter of months and the company was days away from bankruptcy. If 14 percent interest was so damn high, why the hell didn't they make the deal with the private investors that were willing to go with a lower rate than the feds?
Oh, that's right, because there weren't any.
I think their argument is full of shit. No one held a gun to their head, either when they made such piss poor decisions that got them into the mess they created or when they stood in line for the bailout. And I know that I will never see dollar one of the money they would be awarded in any lawsuit, so don't argue that you're doing this on my behalf.
Frankly, I already made my money. I bought it at the firesale for a buck a share, on the day when they were declared "too big to fail". At the moment I am writing this, those same shares are worth 35.50. AIG is just pissed off that they couldn't do the same thing, a point made by another poster here.
There is certainly a case to be made that the AIG bailout was structured in no small part for the benefit of AIG's counterparties(for reasons that, um, have absolutely nothing to do with the fact that Goldman Sachs was one of the big ones, and the thing was essentially written by GS staff temporarily working for the feds); but it takes serious chutzpah to complain about an interest rate lower than the one on a consumer credit card when your situation was so fucked up that nobody would touch your corpse with somebody else's ten foot pole during one of the most dramatic capital-market fuckups in the history of capital markets...
These guys should have paid the price for their failure to understand how to do business so that the stockholders and the boards would understand in the future that they cannot allow bozos to run their businesses.
It never worked before. Why should it work now? There's an economic bubble busting roughly every ten years. The more deregulation, the bigger the bubbles and the bigger the bust.
People are too greedy to learn the lesson. They'll be cautious for a while and then forget it after a few years. Only state regulations can rein in all that greed and stupidity. Provided the State is owned by The People, and not in the hands of a few privileged that sway it in their own interest.
I think this sort of reasoning should be standard fare for political debate. If your attitude on a political or ethical activity or behavior changes based on the identity of who did it, then there's something fundamentally wrong.
The previous example is classic and describes one of the fundamental hypocrisies of politics: it's ok if the good guys do it, but not ok if the bad guys do it. Another one is the evolution of power. Too many people are willing to grant some political figure power because they like that person. They aren't willing to consider what happens when that political figure is no longer in power and another less appealing figure comes in.
As I see it, I want a government stable enough that it doesn't fall apart the moment an extreme faction gets in power. You want something that can survive a neo-nazi, fundamentalist (of any religious flavor), voluntary human extinctionist head of state, or whatever crazy ideology is out there. And frankly, I think the US has such a system. It's survived (so far) both G. W. Bush and Obama, for example, and that's probably as extreme a difference in ideology as you're likely to get.
That's my point: If you want to argue that 14% is some sort of cruel usury, step up and show me the better offer... *Crickets*.
Given the state of the capital markets, and the fact that the 'insurance' that was supposed to have negated a whole bunch of risk was suddenly being offered by a company that had no money, 14% was a gift. Had there been something better on the table, from another party, and Uncle Sam made it clear that 14% was an offer you couldn't refuse, you might have a case. As it was, though...
It's survived (so far) both G. W. Bush and Obama, for example, and that's probably as extreme a difference in ideology as you're likely to get.
For real? You think Bush and Obama are extremely different?
December 2008, Bush was gearing up to leave office and Obama was gearing up to enter office. Both proclaimed their support for the GM bailout:
From wikipedia:
December 12, 2008: General Motors stated that it was nearly out of cash, and may not survive past 2009. The U.S. Senate voted and strongly opposed any source of government assistance through a bailout bridge loan (originally worth $14 billion in emergency aid) which was aimed toward helping the struggling Big Three automakers financially, despite strong support from President George W. Bush and President-elect Barack Obama, along with some mild support from the Democratic and Republican political parties.
We could list the similarities for hours, right? Everything from the PATRIOT act, support for the TSA, the bailouts of private corporations, and countless billion dollars of government grants to private corporations that donated to campaigns, etc..
You are seeing differences where they don't exist simple because of who you are talking about, even though you arent labeling one side good and the other side bad. You have just demonstrated exactly what the GP was talking, simply pretending that one person is different than the other in spite of a lack of demonstrable evidence to suggest that it is actually the case.
"His name was James Damore."
If by "forced," you mean "they were desperate for money but nobody would lend to them," then you would be right. AIG could have tried to issue some corporate bonds, but would you have been willing to buy them? Would you have purchased preferred stock? Would you have loaned them a single penny when they were teetering on the edge of bankruptcy?
If the shareholders think the deal was bad, they should sue the executives who agreed to it. Of course, they all know that the only remaining alternative was to declare bankruptcy, so what this really is about is a greedy attempt to get even more money.
Palm trees and 8
The guy pushing for the suit, Hank Greenberg, wasn't in charge of AIG at the time of the bailout. He used to run AIG, and has a less-than-sterling reputation, but the shenanigans that caused AIG's collapse did not occur on his watch.
All that said, this is a steaming pile of bullshit. The alternative to the govt. bailout (now shown to have been a REALLY good idea, given how it's made money and prevented the next Great Depression) instant bankruptcy where the shareholders would have been left with 0%, instead of the 20% of the company they ended up with.
You don't understand.
The banks that made the loans sold them to Fanny/Freddy. Once they sold them they were done. Clearly Fanny/Freddies masters wanted bad loans written. If you pay $20/gram for dogshit it's expected that the market will deliver, don't blame the market for doing what it does.
Other banks bought the loans from Fanny/Freddy and repackaged them into investments.
The fact is Fanny/Freddy set the standards and passed the majority of these loans through their hands. Those who wrote the standards were responsible for the standards.
Finally, no the banks were not free to set their own standards (unless they wanted to be sued by the first 'ethnic' they rejected, using the government standard was and is lawsuit insurance).
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'