The most incredible headline flashed across the screen, AIG is thinking of suing the Federal Government for bailing them out. This is the company at the heart of financial contagion. AIG had created derivative dominoes where if one financial institution failed, that one institutional failure would trigger credit default swaps derivatives which in turn would collapse the entire global system.
The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. 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.”
Right O! This is happening while AIG is on a public relations campaign with op-eds, TV ads and tweets thanking America for saving the company. The lawsuit in question is being brought by Maurice Greenberg, former AIG CEO. Greenberg was the subject of a 2005 intense probe by then New York attorney general Elliot Spitzer which forced Greenberg out of the company. During the height of the AIG bail outs, they also clawed back a charity, just to pay executives their bonuses.
Greenberg, through holding company Starr International, owned 12% of AIG stock in 2008 and is upset that the bail out diluted his shares, The suit also claims the government charged a supposed 14% interest rate on one of the AIG loans. Of merit to us might be this claim:
The government, Starr argues, used billions of dollars from A.I.G. to settle credit-default swaps the insurer had with banks like Goldman Sachs. The deal, according to the lawsuit, empowered the government to carry out a “backdoor bailout” of Wall Street.
Lest we not forget if AIG hadn't been bailed out they would have been liquidated in bankruptcy and all shareholder value would have been a big, fat zero.
Newly minted Massachusetts Senator and former bail out COP Elizabeth Warren is outraged as are other Congressional members and even the Federal Reserve.
Beginning in 2008, the federal government poured billions of dollars into AIG to save it from bankruptcy. AIG's reckless bets nearly crashed our entire economy. Taxpayers across this country saved AIG from ruin, and it would be outrageous for this company to turn around and sue the federal government because they think the deal wasn't generous enough.
Even today, the government provides an ongoing, stealth bailout, propping up AIG with special tax breaks -- tax breaks that Congress should stop. AIG should thank American taxpayers for their help, not bite the hand that fed them for helping them out in a crisis.
We find it outrageous too. The New York Times is giving AIG a break, saying if they do not at least consider joining Greenberg's lawsuit, they will open themselves up to even more litigation from shareholders.
Greenberg has the big guns on this case. The suit's lead attorney is David Boies, if anyone remembers election 2000 and the U.S. Supreme court ruling which shut down the Gore-Bush vote recount. While AIG is touting a $22.7 billion profit for the government from all of the bail outs, it's not that simple. AIG received special tax breaks for years to come which will cost taxpayers billions.
We doubt sincerely AIG is actually going to sign up for this turkey. Joining a civil lawsuit against the government would be a public relations disaster. The government in fact treated AIG, along with their shareholders, much better than the suit alleges, at taxpayer's expense. Now suing Goldman Sachs and others for receiving 100% payouts on various credit default swaps issued by AIG, that would be much more interesting argument.
Update: As expected, AIG rejected joining Greenberg's lawsuit. AIG did not go there.
The board of the American International Group has declined to join a lawsuit against the federal government over its $182 billion taxpayer-financed bailout, the company said on Wednesday.
Update 2: AIG is suing the New York Fed for preventing them from suing Bank of America and others who either originated or bundled into derivatives worthless mortgages (i.e. MBSes and CDOs with tranched MBSes) upon which they issued CDSes. We'll have more details on this action, but for now yes, AIG is suing, but the right organizations, not the wrong ones.
Comments
There's gratitude for you
I think it was Lenin who said "The Capitalists will sell us the rope with which we will hang them."
Chase TV ad WORSE EVER
It's disgusting, sweeping music, iconic images of Americana at it's best and what they are promoting is making sure corporations, in particular Chase, do whatever they want under this lie America was built on "free markets" and "capitalism" (as they define it which shifts with their profit agendas!!)
Right up there with pharmaceutical ads of sweeping meadows and some old lady gardening in $1000 dollar gardening hats while they list off the side effects that will kill you.
It's awesome - crony capitalists/whiners at their finest!
This is pure comedic gold. Crony capitalists rail against big government, lazy taxpayers, Socialism, the courts, America, and anything else that stands in the way of their incompetence, theft, and carpeting the corporate boardrooms with the bodies of the miserable commoners. And they carry their message on their compliant TV channels, press rooms, and political offices. But when they need it, they look to the government, the taxpayers' money (although the taxpayers had no choice in the matter), corporate Socialism (fascism? bogus "democratic" government? names don't even matter at this point, it all serves the same master), the courts (despite Stossel's protestations - hypocrisy he too enjoyed), America, and anything else they can steal or loot or beg from. And when they are back in business, they once again repeat their same old mantras until they need the lazy taxpayers, Socialism, once again when they blow up the world again - and that's just around the corner with trillions in derivatives, HFT algos out of of control and unstopped by the SEC, pensions being looted, and workers increasingly unable to work for $ but still financing corporations and their government subsidies and tax breaks. They create the mess after lobbying for no rules, demand taxpayer money because of the mess, blame the corporate-controlled government for letting the kleptocrats destroy the rules that would have prevented the mess, fight against criminal and civil prosecutions that will deter the mess from happening again and punishing past behavior, and then create another mess soon after and state, with a straight face, that the government they control should have stopped them if it was a problem. Comedy, I sh*t you not. I can't wait until the kleptocrats and their government puppets start praising Crony Communist China and say we should be more like it. Oh, wait . . .
I swear, if they keep this up for much longer, Mark Twain will rise from the grave to write attacks on these clowns (funny how the so-called comics on corporate-controlled TV channels could never approach the daring and wit that comics and gadflies possessed before TV for 2000 years prior). The Founding Fathers will personally visit these asshats in their corporate boardrooms and demand that any and all bills with their faces on them be handed over because the mere thought of these kleptocrats possessing their images in their pockets makes them sick to their stomachs even in death. Pure tragicomedy, and I expect much more to come because shame is gone and it's farce posing as America 24/7 for a few decades now.
I wonder if the story is a plant by Greenberg
I expect AIG to do their legal obligation thing and then pass on getting involved in this lawsuit. The press makes me wonder if it is a plant story for any half wit knows this will outrage the people.
I'm interesting in the 100% CDS payouts, which was absolutely outrageous, "free" money to Goldman Sachs in particular.
hanging's too good
Greenberg and people like him should have been executed for their malfeasance, criminal incompetence, and treason. That would cut down on this sort of outrageous behavior, as well as future speculative boondoggles.
eh, that's meant to be the reaction here but wait a minute
Naked Capitalism just summarized up my own thoughts and folks, read this for she has had great insight into bail out nation.
While Greenberg is clearly one greedy bastard, the suit itself might bring to light some of the bail out muck we've been covering.
It's not just AIG and Greenberg that are evil doers here, but the entire bail out itself by the Treasury and Fed was/is an outrage. Though civil lawsuit discovery who knows what they will dig out by suing.
In the end nothing will change, suit or no suit, we still suffer
Who's going to pay for the US Government defense, responses to discovery requests, producing the 10 million pages of discovery? Why we will of course. And don't forget plenty of contracting companies owned by some oligarchs also have their hands in document production, legal services work, so they make money even when one of their own sues the government (sort of a no-lose welfare). Who will pay the salaries of all the attorneys assigned to the defense of the case? We will of course. And will the "government attorneys" go join Goldman or AIG or Credit Suisse because of their expertise during or shortly after Year 1 or 2 of the lawsuit? Of course they will. And will the corporate-owned media cover anything beyond Fox saying it's Socialist to punish AIG (after crony capitalist Greenberg took our cash against our will) and CNN and MSNBC say Obama's DOJ is really looking out for us? No, no matter what, the false dichotomy is always imposed on any and every story, no matter how far it is from the truth.
Nothing will change, ever. This potential lawsuit (which the board voted against pursuing today) is just another distraction. Fiscal cliff reincarnation is coming up soon as the debt ceiling will be preplanned distraction #2, or #3, or #4 in 2013. While this or some Executive Order regarding guns and the 2nd Amendment or the Labor Secretary's departure or Geithner's departure is discussed, who's talking about outsourcing and jobs and factories closing down and applying to 3,000 - 5,000 jobs across the country over the course of 5+ years in all sorts of fields and receiving not one interview because people are overqualified/too old, won't act like a dog for HR and hiring managers, working as an intern for free with a PhD in your 40s, etc.? No one except blogs on the Internet. UNEMPLOYMENT and our race to be a Third World Republic where we all work as pool boys and maids and chauffeurs to the oligarchs from the US and abroad is getting closer every day it's ignored.
Put in some "Taylor Swift" references to get people here
Well, I'm pretty exhausted writing, calling, etc. to no effect anywhere despite some skills that make me "overqualified," or too old, or too questioning, or too American. No one in power gives a sh*t because they love corruption, love asskissing, love sycophants, etc. The people in power got there and hold power through asskissing, theft, financial rape, perjury, etc. I know very well what the rule of law and ethics mean. And that gets me a sweet spot next to 28 million other people. And we're such optimistic bastards that we never stop writing and calling with no effect whatsoever. I ain't in the big club George Carlin referenced, so that makes me poorer, but wouldn't have it any other way. And I'll write and call some more to no effect.
But Robert, you're still going, and going strong, so to get those pageviews up, you've got to work in Kim and Taylor and Hollywood and Tarantino and this guy's affair and that girl's latest DWI.
USA 2013! Freaking A, it's awesome (for douchebags)! Glad I learned The Golden Rule and working hard and being honest because Lord knows that counts against anyone who believes that horsesh*t. HSBC, still paying people tens of millions to launder money and be coconspirators for terrorists and have Bloomberg and DC and the Treasury love you for it? Banksters still having trouble finding qualified Americans but having no trouble making money from funding Al-Qaeda? Politicians no trouble accepting laundered money that helped fund Al-Qaeda? Damn, so much for patriotism too. Wrong time, wrong values. Now, if I could invent a time machine before a reincarnated Steve Jobs would have 10 year olds making it in Pakistan or China (or prisoners, or 10 year old prisoners), I'd be set, and me and my boys would be kickin' it a long time ago. And you know what? I'm going to upvote myself too. Because if Bill Gates can steal IP, make billions off it, lie to secret Senate meetings that he can't find qualified Americans, import foreign help, and name a charity after himself and his wife like he gives a crap about humanity, I can upvote myself (but being humble, I apologize in advance).
Taylor Swift, Page Views, Flu and Upgrades
No kidding, I tried that when Michael Jackson died for that was the news for 8 days, 24/7 and nothing else got through. Politicians love this "pick a non-issue" 24/7 news cycle which drowns out all meaning.
Anyway, putting a Michael Jackson link didn't do much but now you know why crap Business Insider and HuffPo get so much traffic, they put some T&A plus "celebrity gossip' on their site. Sad, sad sad. You'll notice turning business professionals into glorified T&A, such as "who is the hottest girl geek in startup land" (right o, now that's important for a new venture) and then the never ending parade of multi-million dollar estates by blood sucking hedge funds, i.e. CEO worship drones on.
I'm sorry the site traffic is down. I've been working on site upgrades, which are MAJOR and I thought I'd have it done by New Years, ya ya, ran into a lot more snags that I thought. I actually hope to have the new site up and running by Sunday.
That wages post and my better writings take hours to do, to number crunch the statistics plus graph them, so site articles are plain down and many not detailed for the last couple of weeks. Srry. I shouldn't have published the wages article during the holiday, I think many missed it!
This will either be a disaster or really help increase traffic and participation. Kurtz and other regulars, please help out by letting me know all problems. If something doesn't "click" let me know, the page doesn't display, the load is slow as a dog or worse things. Email above and generally admin will do 'er.
That said, if all works as designed, traffic should increase dramatically and even more so if we can find other authors to publish. The biggest first things are accessing the site via any device, i.e. ancient mobile phone, Android, iPhone, tablet and have everything display, scale.
Things added in the sandbox, about to be moved to the final dev. stage for final config and load testing are:
1. fast loading ajax comments
2. flag of comments plus recommend which highlight our awesome comments on the front page, user flag to delete spammers and psychos.
3. faster page loads, archives, detailed menu
4. easier logins by use of other acccounts
4. Hopefully more readability than what the look is now
There are many more but for the first rev. I need to just get the thing fast and tuned and done, which involved a MAJOR database clean out that is done separately from the upgrades. You'll see sites go down for 12 hours to two days over this and I hope the downtime consists of a 2 minute site swap (fingers crossed!!!!)
Now you know why it's taking me so long to do the upgrades! I plan on having a real forum where anyone can write a post again. I couldn't do it earlier due to publishing and security but with the upgrades we should be able to have a nice populist mud pit.
I really want to have an authenticated user forum which was the original point of the site. Our comments are way more than typical comments but I think we need this as well.
Flu - of course, going on 7 days. Ever place a friggin' magnifying class in css for 6 hours because you have a fever of 102? Yada!
It's just good to see we have a place to voice dissent
With so much corruption, 99% being ignored, absolutely no outlets for dissent, I think it's critical, yes, absolutely essential that this and other sites allow people to say what they have to say. Many among us have BAs, PhDs, served in law enforcement and/or the military, are long-term unemployed (and we're talking LONG-TERM), etc. and have no voice in the govt. or media. So this site and others, no matter whether they are deemed left, right, fringe, mainstream, etc., allow people an outlet and a place to show they aren't the uneducated, clueless masses the asshats in boardrooms and political halls of power dismiss us as (yup, we're dumb as freaking rocks, apparently, unlike 'dem brainsurgeons reading teleprompters for $1-$10 million/yr and following orders at all costs). We have lived, traveled, struggled, fed, fought, etc. and we count, and far more than our political clout currently reveals.
OK, I agree with that and the original point
EP became a news source but originally it was a free for all. I think I can restore and improve the ability for anyone to have their say while keeping the Journalistic aspect of the site. That's the other rules of EP, no economic fiction, accurate use of facts, statistics for there is a blizzard of bullshit out there.
Kurtz, let me know what additional features you think would make EP a better space after I get this initial upgrade done. It's pretty much me figuring this out and almost no feedback, whereas even an example, just as "why don't you add x like so and so site has"
is good enough for me to check out a feature, even a link.
Well, I need feedback generally. Drupal, esp. configuring for both a newspaper and a community is a real job, I've written tons of custom code and the chances of me missing something or even introducing a bug are high. I'm doing testing but there is only so much I'm gonna catch before the new site is live, in production. I can't check combination of clicking around and some function beneath which kicks in and crashes or breaks as much as I believe in testing code. I don't got no QA team here. ;)
One of the ZH Tylers must know how to generate hits
ZH gets massive hits. Some people agree with some of the Tylers and disagree with the others, but ZH does get massive traffic and their economic/corruption/insider info. is pretty sweet. As for me, does a BS or BA make me overqualified to apply to Walmart? Am I an idiot if I like to read books and scored 80% on my SATs? 90th%? 99.99%? I'll assume the CEO and HR all scored in the 99.99999th%, otherwise I might have serious issues with those dumb asshol*es rejecting me when I score 99%+ on tests. Ha ha ha, FTW. Could Jamie Dimon do well in the Thunderdome or Blankfein? Just curious. Because some of us out here, besides reading a book or two, also like to lift a box or two or a rock or two. Jamie, come out and play you . . .
they do, but I doubht they would say why
One thing is to release many shorter posts. If you notice they publish just one graph with one line or two description. Our posts are long, with 10 graphs +. there are other tricks but frankly I know this site does not display correctly on mobile devices so first thing is to improve that. Also, trading data, daily trading will get massive hits for traders read everything on a minute by minute to base trades on. Unless we get a trader/author, it's so real time, well, I'm for quality and accuracy over real time, let's just say that.
More posts, check current events multiple X per day
It's about current events. Check globally, stuff happens daily that the douches in the big boy newsrooms don't care about.. I don't get paid, I got f*cked so many times that I no longer give out free info (not regarding this site, but in my past jobs, etc.) therefore I'm not jumping up and down volunteering news to those Nobel and Pulitzer winners.
i need more authors to do that
First, a post has to be accurate for we are a news source and also critical is correct formatting. One must correctly format images, paragraphs and absolutely no raw links! I just cannot thoroughly research topics to post 10x a day and that's our thing, accuracy, correct. If we could find more authors great but I hate to say this, but ZH has gotten so many major things wrong with the "first" mentality, not even doing enough analysis to realize the error.
That said, knowing how to correct format is critical. This site has a WYSIWYG and still people have such malformed HTML it can crash the site. Can't do that, post raw links, broken links malformed HTML and so on, not on a news site.
Now the new site is in HTML 5, so this should be interesting, I'm going to have to transition in terms of the content.
The site will have a new WYSIWYG and I have automatic HTML correctors as well, but things still get by.
It's not like EP is dead here we are cited all of the time and traffic is reasonable, we're usually in the top 100 economics sites if not the top 25. ;)
So, because I cannot get people to write correctly formatted posts and it is asking a lot for people all to be Journalists or Professionals, the punt solution here will be to add forums that do not go out to Google news as the articles still will. People can subscribe to it and I can put the latest topics in a front page block even to further help hide incorrect formatting issues and that's the current plan.
If people want to use it as a "quick news", I can set up multiple forums, so we can have quick news, another called whine, and so on, or I can put up one called quick news.
The current title of "Instapopulist" will be moved to the forum and the current content will be called statistical overview articles or put in a sub category of macro economics/economy and part of the news publication structure.
Anyway, first up are these major, major changes. We've got memcache, APC, Varnish and a CDN to set up, what can possibly go wrong! (I have them set up and running, but ot together with the new site actually, all of this integration will be part of the upcoming upgrade. Lots of changes in one shot.
Some people win Pulitzers, others go homeless
Ain't life grand? Some folks rake in millions or tens of millions for writing "columns" on both sides of the political spectrum while others have the same or better writing skills, better insight, and earn jack sh** and can't get a job for part-time work and are call unqualified, overqualified, or lazy assho*es. But hey, don't dare complain. Awesome. I think many posters got sick after the Huffington Post fiasco. That was ugly and turned off many, many people. Huffington, who did nothing other than use her name, got megarich and posters earned $0? Personally tired of hearing about Krugman or Kristof (like Kristof would stick around when Rwandan genocide started before the US would fly his sorry ass out ASAP). Personally, I like writing, but again, as people on other sites say, if you're good, shouldn't you get paid? So why should Krugman earn tens of millions while John Doe gets $0? It's an f'd up world.
I'm speaking of other sites
It's ridiculous out there. And these sites almost never pay props to the people posting, it's as if the owners of those sites know it all and deserve $ for other people's insights and opinions.
truly is!
The Huffington Post made millions on other people working for free and how about pundits on cable? Technically clueless corporate lobbyist talking point monkeys. If this site ever made $$$$, I have a way to, by code, distribute profits to authors but that hasn't happened. Pure labor of love, I'm writing code because a. I can and b. I want to improve the site, end of msg.
But bottom line we are an online publication and so I hope this effort is worth it in terms of exposure. As it is I can tell you many posts on this site come up as page rank #1, #2 on a host of topics which shows quality effort, detail and correcting errors (when found!) being accurate over time does pay off.
Plenty of stories out there - making Bloomberg News = douche
Come on, 2013, USA, corruption rampant, MSM pushing retardation, people with insight and balls unemployed for 3, 4, 5 years, I smell revolution. But if there's a place where exposes or news can be spread, I'm down with the cause.