Author Topic: Congress Passes Bill To Tax AIG Bonuses!  (Read 9119 times)

ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #30 on: March 19, 2009, 05:54:31 PM »
I'd have to say, maybe the Stalin comment was a bit rash -- I think the French Revolution sounds more appropriate.  Let's just drag out all high paid executives and cut their heads off.  This is a populist mob.


Partner24

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #31 on: March 19, 2009, 06:36:35 PM »
Frankly, yes it might sound a little bit like the French revolution. French people were tired that their royalties was being used to compensate the very few. I'm not saying that it is the case, but we face some huge deficits and us and our children will ultimately have to pay this debt and pay million of bonuses to now federal employees is shocking.

Shareholders can decide what they want and just rubber stamping abusing compensation packages if they want, but now some troubled companies have to deal with taxpayers money. If they complain about taxpayers being more sharp about expenses, I have a suggestion for them: why not find private capital to save you instead?

You would not have this very long thread if some companies wouldn't have asked for taxpayers money to survive.





ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #32 on: March 19, 2009, 06:55:51 PM »
You would not have this very long thread if some companies wouldn't have asked for taxpayers money to survive.


Yes, but they didn't ask. 

Wells Fargo should have just said, F**k you, I'm not going to help you (America) out.


http://albuquerque.bizjournals.com/albuquerque/stories/2009/03/16/daily12.html?ana=yfcpc
 

Kovacevich also expanded on earlier news reports that indicated he had initially resisted taking $25 billion in a federal direct-investment under the Troubled Asset Relief Program. He said he opposed the programís structure requiring Wells and other major banks to take the money, saying that regulators hoped requiring all banks to take the money would lift public perception on the troubled banks to the level of the nationís healthiest banks. Kovacevich feared the reputation of the nationís strongest banks would sink.


ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #33 on: March 19, 2009, 07:27:18 PM »
Kovacevich essentially says that they took the money to help out the country, not the other way around.

Now do you guys get it?  Somebody helps you out and you turn around and call them a bastard and that they don't deserve a bonus?

I am disgusted.

ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #34 on: March 19, 2009, 07:57:41 PM »
I wish too that the American public better understood that AIG's chief executive works for free.

No, not really.  He makes $1 per year salary, and no bonus.

Even a panhandler makes more than AIG's CEO.

That wasn't the headline I saw though.  It doesn't hype, it doesn't outrage, it doesn't sell.

scorpioncapital

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #35 on: March 19, 2009, 08:15:44 PM »
Is it just me or has the reaction to the AIG bonuses resulted in AIG giving back MORE than the actual bonus?

- AIG employees to pay back the bonuses.
- Congress to tax 90% of the bonuses.
- Geithner to deduct it from the $30 billion loan installment

Are they getting back 2-3x the bonus amount???

ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #36 on: March 19, 2009, 08:51:15 PM »
Is it just me or has the reaction to the AIG bonuses resulted in AIG giving back MORE than the actual bonus?

- AIG employees to pay back the bonuses.
- Congress to tax 90% of the bonuses.
- Geithner to deduct it from the $30 billion loan installment

Are they getting back 2-3x the bonus amount???


That's right, they are trying to punish AIG by making them repay some bailout money (the size of the bonuses) and also withholding some bailout money (again, the size of the bonuses) that they have yet to give AIG.

Do you realize how stupid that is? 

Punish AIG?

Umm... let's really stick it to the people who own AIG right?

Umm... wait, no that's the taxpayer.  Oh... I get it, let's really make those 20% minority shareholders pay!!

I have a vision of a monk walking along flogging himself in penance -- the monk is the government, the owner of AIG exactly a punishment on himself.

It can't get any more bizarre, can it?  Why punish the American public for the bonuses?  What did they do?  And how is it punishment just to repay bailout money back to yourself? 

This is about as strange as a shareholder lawsuit (owners suing themselves).

Perhaps Buffett should give them a lesson on thinking like owners, now that they hold 80% of the common stock.
« Last Edit: March 19, 2009, 09:14:52 PM by ericopoly »

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #37 on: March 19, 2009, 09:18:59 PM »
Has anyone noticed that a less publicized but much larger payment to AIG's CDS counterparties of hundreds of billions of dollars which then flow to Hedge Funds (speculative CDS buyers)?  This was in yesterday's WSJ.  So you have taxpayer paying off AIG's bad bets to hedge funds (speculative CDS buyers) with no negotiation with CDS purchasers with the CDS being paid off at par.  Once this settles in the bonus issue is going to be a sideshow. 

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ExpectedValue

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #38 on: March 19, 2009, 11:06:38 PM »
I can see the TED spread narrowed right after the big bailouts.

It didn't spike upwards as a result of AIG's bonuses.

So what is your point?


My point is that before the TARP, the confidence behind our banking system was shaken - to the point where they were very susceptible to bear raids. We had Bear Stearns, we had Lehman Brothers, and it's likely that we would have had more. In order to stem that off, we had to lend these companies money because their business models DEPEND upon confidence.

This is not your usual value investor situation where you can ignore the lack of confidence and have faith that these companies could thrive without confidence.

So Wells Fargo can call these additional restraints asinine and you may think that they're unethical, but that's the price that they are going to have to pay for the confidence that comes with US taxpayers backing them. Because without it, they might not be able to operate. That's the price that comes with being a Bank and having to make sure that every day the public is confident about you.

Don't like it? Don't invest in those types of companies.

ericopoly

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Re: Congress Passes Bill To Tax AIG Bonuses!
« Reply #39 on: March 19, 2009, 11:39:47 PM »
So Wells Fargo can call these additional restraints asinine and you may think that they're unethical, but that's the price that they are going to have to pay for the confidence that comes with US taxpayers backing them. Because without it, they might not be able to operate.

You spin this as though the banks might not be able to operate without the capital, so therefore they can kiss your ass.  First off, Wells Fargo didn't need the capital -- but with it they were able to expand their lending and quite possibly contribute to TariqAli still having a job today, depending on who you work for.

Do you have a rough idea of how many companies would not be able to operate without banks to lend to them?  Don't they all depend on the confidence of the banking system?  So by your logic the government has the right to heavily tax their executive pay too, to repay the taxpayers for the bailout of the financial system.

That's a chain reaction of companies falling like dominoes that was averted with this TARP capital -- so they all owe the taxpayers something.  They were all bailed out, not just the banks.

Buffett is right.  This is Pearl Harbor and it isn't time to blame the Navy senior officers, we need to get busy winning the war.
















« Last Edit: March 19, 2009, 11:43:41 PM by ericopoly »