The Bailout: For or Against

Huh??? I thought we were already in a recession??? Did we get out of that one and new we're in a new one???

I guess I should pay attention to these things, but I'm too busy trying to make ends meet to notice any change(s) in the economy - it's been bad for a while now in my opinion. Although it's nice to see the gas prices coming down. Here in Chicago $4+/gallon has been the norm for months and just this weekend I saw some prices of $3.65/gallon!

Not only did Jim Cramer say it on his show Mad Money but, also on the Today show!  I wonder how responsible Cramer may have been for some of the run on the market today? 

Ya gotta love this one.............Amazing --from the Washington Post

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After Bailout, AIG Executives Head to Resort



Less than a week after the federal government offered an $85 billion bailout to insurance giant AIG, the company held a week-long retreat for its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running up a tab of $440,000, Rep. Henry Waxman (D-Calif.) said today at the the opening of a House committee hearing about the near-failure of the insurance giant.

Showing a photograph of the resort, Waxman said the executives spent $200,000 for rooms, $150,000 for meals and $23,000 for the spa.

"Less than a week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation," Waxman said. "We will ask whether any of this makes sense. "

The committee will ask the company's executives about their multimillion-dollar pay packages -- some of which they continue to receive -- as well as who bears responsibility for the company's high-risk investment portfolio, which led to its near collapse just weeks ago.

"They were getting their manicures, their pedicures, massages, their facials while the American people were paying their bills," thundered Rep. Elijah E. Cummings (D-Md.), of the executive retreat at the Monarch Resort.

The House committee, which took on executive compensation at bankrupt Wall Street firm Lehman Brothers yesterday, has received "tens of thousands" of pages of documents from AIG, Waxman said.

Those documents show that as the company's risky investments began to implode, the company altered its generous executive pay plan to pay out regardless of such losses.
AIG lost over $5 billion in the last quarter of 2007 due its risky financial products division, Waxman said. Yet in March 2008, when the company's compensation committee met to award bonuses, Chief Executive Martin Sullivan urged the committee to ignore those losses, which should have slashed bonuses.

But the board agreed to ignore the losses from the financial products division and gave Sullivan a cash bonus of over $5 million. The board also approved a new compensation contract for Sullivan that gave him a golden parachute of $15 million, Waxman said.

Joseph Cassano, the executive in charge of the company's troubled financial products division, received more than $280 million over the last eight years, Waxman said. Even after he was terminated in February as his investments turned sour, the company allowed him to keep up to $34 million in unvested bonuses and put him on a $1 million-a-month retainer. He continues to receive $1 million a month, Waxman said.

Waxman also looked skeptically at the executives' defense that the troubles in the business had to do with larger economic forces and not their own bad decisions.
When a former AIG auditor, Joseph St. Denis, expressed concerns, Cassano told him "I have deliberately excluded you from the valuation ... because I was concerned that you would pollute the process," according to Waxman.

St. Denis resigned in protest.

PricewaterhouseCoopers, AIG's auditor, told the company in March 2008 that the "root cause" of AIG's problems was that people assessing risk did not have enough access to the financial products division, where the risky investments originated.
Waxman further suggested that Sullivan had deliberately misled investors.

On Dec. 5, 2007, Sullivan expressed confidence to investors. But a week before, PricewaterhouseCoopers warned Sullivan that the company "could have a material weakness relating to these area," committee members said.


-- Peter Whoriskey

I agree, someone has to ANSWER to the mess they've made. Enough hanky panky has been going on too long in the upper eachelons. With all that's happened in the past year or two with major companies screwing the little investor and now this, you'd think someone up there would have blown the whistle long ago to prevent this mess. It makes me mad that these CEO"S with all their so called brains and big paychecks can walk away from a disaster they have created that everyone will have to pay for. Fire em all.......who cares, they deserve it and more! Such irresponsible handling of peoples money should be punishable and never should have happened in the first place. I'm sick to death of overpaid greedy CEO"S and their companies.

Doesn't surprise me in the least--the lovely retreat enjoyed by these multi-millionaires! It should be "off with their heads!" as the Queen of Hearts in Alice in Wonderland said. And these people must be living in wonderland--my mom said the gov't should take over and sell all their luxury real estate holdings and use the money to pay off the 700trillion dollars of bailout--hah--I told her I didn't think that would work, as there are already foreclosed homes that the feds will end up with. How will they sell all of those, if the market continues to fall, and housing prices are taking a dive also.

I just think these people need to have some kind of punishment meted out to them. There must be some cells in a federal prison empty somewhere. And couldn't they be put to work mopping floors, or cleaning toilets--with toothbrushes? Maybe some time in the military would cure them of ever doing this again! I'm disgusted. There are no high standards here--morals and ethics be d*&^ed!!

They aren't stupid--how could they not know how this would look to the American public? If they are that dense, maybe they shouldn't get paid all that money, as they obviously don't know how to handle it properly. 

Buy gold, it's the only safe currency during a depression. Many books have been written long ago that the next major disaster would be global financial collapse. Is it here??

Why is there a need for foreclosures if the tenants are paying the rent? Rhetorical question, but obviously the rent is not being used to make the mortgage payments! Perhaps they should transfer the ownership to the renters, as it appears that they are more able to keep up with payments than the owners of the properties. I know, that wouldn't be legal.

Perhaps we should start a bailout fund for the sheriff. I don't think he'll get any of that $700 billion to get "bailed out" for "ignoring the law and his legal responsibilities."

I'm with you Anneshirley--he's a hero. Aren't too many of them left in this day and age. 

Let me tell you, it ain't pretty in Europe, either! Has there been any news coverage here as to what is going on over there?

If I had ANY spare money (ha, ha) I'd be buying up foreclosures both here AND in Western Europe....   (can't fault a girl for trying to get a head, can you?)

On a positive note: the dollar against the Euro and agianst the British Pound has been good...

I agree with Nader. I think they should serve time, and pay restitution--like return the monies paid to them for the past couple of years. Of course, many feel they should have to sell their extra homes, and return stocks. In this economy they would not be worth much, right? And who could afford to buy those luxury mansions if they are all in jail!! I just think they should return what's being held for their retirement. I'll go out on a limb, and even suggest that they get a minimum wage job for a few years, and see if that would inspire them to improve the lot of those who are in the low income group and struggling. And why is neither candidate discussing the "poor?" We keep hearing about the middle class? Didn't that happen in the last election? Probably in elections before the last election!! Yes, the middle class needs some help in this, but why do the poor become invisible?

I would be happy to see this country become socialist. We sure aren't doing a very good job of being a role model for "democracy." This country needs to move to socialist medicine, education & housing. I have friends in Norway, and relatives in Finland. They are very happy with the care they receive--from cradle to grave! Of course, they pay almost 50% in taxes, but they have infant care, health care, child care, elder care, assisted living, home healthcare and on and on. In fact, my Norwegian friend's daughter had all kinds of after school sports, art classes, and music that were free--snow skiing, hockey, skating, etc. Both countries have excellent transportation systems--railways, busses, ferries, etc. Most people who live in big cities have housing near their job and access to all kinds of businesses. Many do not drive cars, or if they need one rent it for a trip.

I agree with you, that we quickly put labels on a person or their ideas, and suddenly we close down and don't want to listen. We have made up our minds! Wasn't there someone who said "politics make strange bedfellows?" I don't know if I have that right, my brain fails me sometimes--I call it medicine brain! Politics seem to bring out the worst in some people.

At this point, I just want this election to be overwith. I'm done. Just seems like it's the same old, same old over and over again. He did this , he did that. When are we going to get serious about making this country better? I think this century is going to be a difficult one for all of us. We are moving into a global arena faster and faster. What we do affects so many nations and their economies, their environments. I think we have a huge responsibility to deal with giving up any need for oil (my extreme side), dealing with global warming, feed the hungry in our country and spread that to the world, etc. I could go on. I don't believe in isolationism but we have to move to a new paradigm where we stop and think about what we are about to do before we do it!!

And then again, some will say there is no such thing as global warming. (

As far as corporal jail time, wouldn't that mean that some of those Congresspeople might have to share a cell with them? And it seems like Drs--don't want to snitch on each other, so the bad ones keep doing what they are doing!