These Weren't Too Big

I'm OVER hearing "too big to fail" in regard to the AIG debacle. As I believe I've asked before, how is "too big to fail" any different than "too big to succeed"? If you can't "fail", then why bother trying to "succeed"? And as I've seen happen with so many things lately, the AIG outrage is directed in the wrong direction. Was it sucky of them to huge, multi-million dollar bonuses when they ran the company into the ground? Well, sure. But are you going to tell me that if it was wrote in your contract that you get a bonus at the end of the year no matter what that you're not going to take it? Sure you are. But regardless as to whether or not that's despicable behavior, let's just remember that it wouldn't have been possible without the help of Congress, who allowed the terms of the taxpayer money that AIG received to include wording that specified the executives receiving bonuses. Be mad about it because you should. But be mad at Congress.

And I'm going to have to assume that it was Congress, in an attempt to deflect some, any or all of the blame off of themselves, who came up with the "too big to fail" explanation as to why blindly handing over bazillions of dollars is necessary. Along with using "too big to fail" as a justification for these bailout/spending bills, it also seems to carry with it the unsaid implication that "too big to fail" also means "won't fail". I know they say it like it's supposed to mean "can't fail", but the "won't fail" is implied instead because if it couldn't fail then we wouldn't need to fund its not failing.

And, like almost everything else that has been attempted during this economic nightmare, it's misleading and installs false hope. Really, there have been a lot of things which carried the implication of "too big to fail". Let's review, shall we?

Oh, yeah. We're doomed for sure. Still not convinced? Fine, one more example of our impending doomage, though it really doesn't fit the "too big to fail" category, it's definitely a sign of something. (If nothing else, at least it's something amusing!)

The final sign of doom: Nancy Pelosi looks like Gloria Allred. Behold!

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So Much For Those Retention Bonuses

In what was quite possibly one of the worst justifications for giving the very folks who have run AIG into the ground a "bonus", Edward M. Liddy said that the "bonuses" were necessary if AIG was to retain "the best and the brightest" employees. I pointed out the other day that clearly AIG does not have "the best and the brightest"! If the current state of AIG is any indication of what "the best and the brightest" can do, I'd really like to give the "not bad and half witted" or "the worst and the dumbest" a shot at running the show over there. You know, just so we can really see the difference between the two because really, at the point, I don't think there is a difference.

But that aside, the taxpayers are getting dry shaved on this one for sure. My vision of our future razor burn stems from an article in the New York Times that ran on Tuesday. The article began: "73 employees were paid more than $1 million in the newly minted bonuses at the insurance giant American International Group, according to Andrew M. Cuomo, the attorney general of New York." Um, holy crap, what was that? 73 people? Who? Who are they? I want names! Actually, I want heads, but you have to start with a name before you get the head. The name IS the head!

"Mr. Cuomo did not name the bonus recipients..." Um, holy crap, what was that? He's not naming them? But I need heads! I mean names! I need names!! WHY is he not naming them? Maybe (but not likely) it's because he's busy rambling off stunning figures such as:

• The highest bonus was $6.4 million
  
• 6 other employees received more than $4 million
  
• Another 15 people received more than $2 million
  
• Another 51 people received $1 million to $2 million

Holy crap. What?

• The top ten bonus recipients received a combined total of $42 million
  
• 22 individuals received $2 million or more.
  
• Those 22 combined received more than $72 million
• 73 received more than $1 million

How's that dry shaving feel? Burn yet? Ass chafed enough? No? Not quite? Perhaps this shall do it:

• 11 of those who received $1 million or more are no longer working at A.I.G.
  
• That includes one who received $4.6 million.

Wait a minute! 11 are no longer working at the company?! But....according to AIG, they were "the best and the brightest"! According to AIG, they had to get that kind of money in order to stay at the company.

Hey, how is this even possible? They received that money on Sunday! SUNDAY! It's Wednesday! That article in The New York Times was wrote on Tuesday! They quit before Tuesday?! I don't think they did.

You folks are clearly not one of "the best and the brightest" liars out there. That was a poor attempt at lying at best, really. :::: sigh :::: What to do? What to do? Oh, well! Here's a million dollars anyway! Nice try! Can't win 'em all! See ya Monday! Or not! Whatever! Here's your money! (Hey, that's how it goes at AIG. Are they hiring?)

And the reason the Mr. Cuomo is not naming the folks who received their undeserved bonus is because AIG won't tell him. Shocking, I know. Another thing that you may or may not find shocking is that when AIG said that they had to pay the bonuses because they were contractually obligated to do so and that they had consulted with lawyers who told them that, they only consulted with their own lawyers. Not outside counsel, not the Treasury, their own lawyers. Then they told Tim Geithner that and he basically said, "Bummer."

Until we get the names of the other heads, I'm perfectly OK with Tim's for now. Tim, you just took what they said about the legality of it all at face value? You didn't have someone else, someone who, perhaps, didn't work for AIG look at things? Where are you and your outrage? Why is Andrew Cuomo suddenly the guy leading the charge? Don't get me wrong, I'm thrilled that Andrew Cuomo is on top of this one. That's the most sensible thing I've heard that's being done about this whole mess probably in the past year. But Tim, you're Secretary of the Treasury!! Well, for now. Who knows? Anyway....

So now what? You're not going to believe me when I tell you, so I don't know if it matters. But please, try to think of the irony in the next step. Please try to see the humor (as if it were not actually happening in real life). Because if you can do those two things, it might prevent you from hanging yourself. Might. I make no promises. Here's what the article says: "....the White House said on Monday that the Treasury would write new requirements about the bonus money in the next $30 billion that it provides to the insurance giant."

Oh. My. God.

The NEXT $30 BILLION?!?!?! Are you effing kidding me?!!? That we GIVE them?!?! AGAIN?!?! MORE??!?!?! And what's with the writing of "new requirements?!" From what I can tell, there weren't any old requirements! From what I can tell there weren't any requirements at all! Shouldn't that read "would write requirements about the bonus money"??

I can't believe that is their solution! To give them more money! What in the hell do these brainstorming sessions with the White House folks sound like?? I'm picturing Tim Geithner at the head of a large table, glistening from a sound buffing with a gallon of Pledge, surrounded by people who are trying to look like they're paying attention, but they're really checking their Blackberries, updating their Facebook page, watching a water skiing squirrel on YouTube and sending obscene Twitter tweets. They don't care what Tim is saying, but I think it has to be something along the lines of:

"Boy, they sure got us this time, didn't they? Well, let's just see them try that with the next round of money we give them. What's the score? AIG: 3; White House: 0 ? We'll get 'em. Somehow. What are we doing different this time? Is there a strongly worded memo? I think we should try a strongly worded memo. Oh! And have Barack give that speech about how he'll be disappointed if they do this again! Yeah, we'll shame them into not screwing us. And "or else"! There has to be an "or else!" in there somewhere. What's that? Oh. No, I don't really know "or else" what? But it doesn't matter. That'll scare them so bad that they wouldn't dare do that again! We won't even have to think about "or else" because it'll be fine. OK, so we have the strongly worded memo, the "or else!" and the disappointment speech made with a stern look with just a touch of finger pointing. That should do 'er. Whew! I'm beat. Who's up for beer pong?"

Andrew Cuomo sent a letter to Barney Frank, the Chairman of the House Committee of Financial Services which detailed what his office has uncovered in the workings of AIG and encouraged them to address the issue. My question is: What in the hell does the House Committee of Financial Services do? Because from what I can tell, none of these House Committees do anything until after something has fallen apart and even then all they do is bark irrelevant questions at them during some faux hearing for the purposes of appearing outraged. If they were truly outraged, they would start implementing some preventative procedures instead of always showing up for loss assessment.

You know, at the beginning of all of this, before AIG received any money at all, we were told by Henry Paulson, et al, that we had to bail them out and we had to do it soon otherwise it would be an utter disaster. He stressed repeatedly that it had to be done immediately lest we face our imminent doom. About 6 weeks later, they got their money. To my knowledge and recollection, there was not "imminent doom" in the interim. My point is, what's the hurry? Slow down there, cowboy. There needs to be a little bit of time invested into figuring out what could generate the least amount of waste. There also needs to be not a little, but a lot of effort invested as well. Sometimes things take way too long, but it's only because people are effing around. Effort. The folks who are doling out this cash need to act like they give a flying F about it, because they don't. And the Obama administration needs to get over themselves and start walking their walk because I'm tired of hearing them talk their talk. Pipe down and whip out some of that 'change' that we distinctly remember being promised. Because all of this seems like the same incompetence that we've grown sadly accustomed to.

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The Unavoidable Financial (part) Deux-m

This is really just the second part of the previous post. It was too damn long, but I couldn't find any part of my ranting that was not relevant to the topic. However, having it so long that folks lose interest halfway through and never make it to the rest of my rant? That I found to be relevant. (Though I'm not so sure I should be telling you this at the beginning of this post. Then again, I really don't want to mimic the behavior of the US Treasury, which is why I'm being up front about it now.) Read on, taken-advantage-of-and-screwed-over-so-many-times-you-can't-walk-straight taxpayers, Read on!

Hey, Obama administration! Did you not look at the AIG folks contracts at some point before you agreed to give them all of our money? Lawyers? Do you have lawyers that could have advised you on how to handle this? Hey. Wait a minute. Did you know that they were going to get their bonuses all along and you're just now letting the public (whose money it is that you're giving them) in on it?? If you knew this was going to happen all along and you waited until the day before the bonuses were to go out (that's right. They go out today. Sunday, March 15.) to let the public know that those losers are getting bonuses, I'd really like you hear your justification for that. Then I'd like you hung upside down in the town square. Not for long. Just until pitchforks and torches are handed out to the villagers and the mob assembles. After that happens, you won't be up there for long. The mob will take you right down, I'm sure of it.

I am done, over, having money just thrown around and given out hand over fist FIRST. Giving out the money should be LAST on the list of things that need to be done in situations like these. There needs to be a clear picture as to what in the hell happened. There needs to be a massive and invasive audit into every single dime that has gone through AIG. Anyone and everyone in management needs to be shown the door. Then there needs to be a plan for the future. After all, if the US government has an 85% stake in AIG (which they do), why is AIG still running the show? And why are they still running the show the exact same way that they've been running it, right up until the point where they were going to collapse and take the entire US economy down with it? Why is AIG still one company. If it's too big to fail, then break it up! Break it up into smaller subsidiaries or franchises or whatever, just don't leave it as one big company! And for God sakes, don't give out any more money until you can hold them accountable and until there's a freaking PLAN for recovery! What is wrong with those folks?

I am seething over this. Not so much because of the money, but because of the incompetence. This is nothing more than incompetence. OK, greed might have something to do with it as well, but there is definitely a large amount of incompetence over there. And the Obama administration seems to be under the impression that a strongly worded memo is going to get folks to straighten up. The Obama administration seems to be under the impression that "or else" is a very useful tool when dealing with an economic crisis. It's NOT!

And am I really, really supposed to rest assured that the Recovery Bill money is going to be accounted for appropriately? Really? Because I'm not. I have no confidence at all that the oversights that are supposed to be making sure that the money is being used appropriately are going to do any good. None. The memo that Camp Obama sent out with the guidelines for the "Accountability and Transparency" that the recovery funds are supposed to meet clearly states on Page 19, Section 2.12 "The initiative is designed to create one portal where the public can find and analyze information and report potential fraud, waste and abuse pertaining to the Recovery Act." It then states: "Each agency should, however, dedicate a section of its primary website to Recovery Act activities within one week of issuance of this guidance." The memo was issued February 18. One week after that would have been February 25. Today is March 15. 35 states have their recovery site up and available. 15 do not. ::::gasp!!:::: But there was a strongly worded memo!! Now what? Nothing, apparently. Nothing.

I'm going to go watch some models duke it out with each other. I should have done that in the first place.

We voted for "change" back in November. Hoo boy, this is "change" all right. Can we "change" back to how it was before? You know, like we do with Daylight Savings Time? We'll just call it Retirement Savings Time and during those months, the government can't take any more of our money! I like it. Who do I talk to?

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The Unavoidable Financial Doom

Over there at CNN.com the top 'Most Viewed' story is "Bedlam breaks out at "Top Model" audition." The second 'Most Viewed' story is "AIG responds to Treasury pressure." That the AIG story is not the most viewed story definitely says something. That folks who are reading news at CNN.com are more interested in some model melee than they are about the incompetent cheats over there at AIG who are largely responsible and also largely to blame for the economic situation of the country AND they are also the recipients of hundreds of billions of dollars which really can't be accounted for at this point. But hey, let's see what got the dander of a bunch of models all riled up, shall we? NO. We shall not.

Call me crazy, but even though I am as big of a fan of hot models as the next person, I'm kind of more interested in AIG "responding to Treasury pressure." They already wanted billions and billions of taxpayer dollars more than they've already received. And I know that the latest funds that are being given to them do come with stipulations, so I guess that must be the "pressure" that CNN is talking about. So what was their response? To paraphrase, I believe the bottom line was something like, "Screw you. We're paying out bonuses. You can't stop us. We still want more money. You're still going to give it to us. Did we say 'screw you' already? We did? Well, screw you again." Something like that. Again, I was paraphrasing.

So, if you're taking a break from all of the model brawling, you should be enraged to know that not only is AIG getting another $30 billion dollars (give or take a couple billion), they are also going to pay out bonuses for 2008. A bonus?? Those guys get bonuses?? For WHAT?? They have run that company into the ground, they have put the entire United States economy on the brink of collapse, they couldn't do a damn thing with the previous $150 billion dollars that they were given. Hell, they can't even account for all of it! And for that they get a bonus? Um, I don't know about you, but if that were my job performance at my job, I wouldn't be getting a bonus. No, I'd be getting my ass kicked out the door. What the hell is going on here?

Well, according to Edward Liddy, the CEO of AIG, "...he personally does not receive a bonus, but that some bonus payments are unavoidable, because they are binding legal obligations of the company, and...there are serious legal, as well as business consequences for not paying." Unavoidable? Some bonus payments are unavoidable? Is that what he said? I can tell you how those bonus payments can be avoided. Ready? Here it is: If your company hadn't been given the money it has in order to stay in business, it would have been out of business for at least six months at this point. There wouldn't be any company to have any employees to pay any bonuses to! That's how they're "avoided". We just let your sorry ass go under and "avoid" all of those binding bonus dilemmas. Are you kidding me?!

Here's my other way to "avoid" paying out those bonuses. Ready? Here it is: You're fired. Do you get a bonus if you've been fired? I would hope the hell that you don't (but since this is AIG, I wouldn't be surprised if they did). So tell you what, O Incompetent Ones....you're all fired. Don't let the solid gold door hit you in the ass on the way out. There you go. Problem solved. Bonuses avoided. What crisis can I solve next? World peace, perhaps? Lemme think about that one.

What's the business consequence for not paying a bonus to someone who does a crappy job? What in the hell do these contracts say? Because I've long been under the impression that a "bonus" was something that you received for doing a good job. Clearly, the majority of folks running AIG are not bonus-worthy. I mean, for cryin' out loud, if those guys are getting bonuses for the job that they're doing, what in the world do they do for folks who actually are doing a good job? A jet? A penthouse? What is going on?!

I'm serious, I want to know what those contracts say as far as the "bonus" obligations that they're SO confined by. There has to be a reason why things are done that way and I'd like to know what those are as well. . If you're guaranteed a "bonus" at the end of the year no matter what, then it's not a "bonus" is it? It's a lump sum payment is what it is. It would seem that you could fornicate with your boss's daughter on his desk and have it broadcast live via webcam to all of the employees and still get your "bonus"!! Why is the lump sum payment more beneficial to the company or to the recipients of it than just to have it spread out and included in their salaries? (I'm really asking. I have no idea.)

My other question is: Why are these folks who were too incompetent to keep this from happening to AIG in the first place STILL in charge?! WHY?!?! They obviously have no idea what they're doing and they also don't seem to want to know what to do. I can't really say that I'd be any different in that position. If I knew I was going to make a gazillion dollars whether I drove the company nose first into the ground or whether I worked my ass off, I don't know that I'd be all for working my ass off if the payout wouldn't be any different than if I just did nothing.

I keep hearing that AIG is "too big to fail". And I've heard it explained why that is and I do understand it. But what I need to have explained to me is how "too big to fail" is not exactly the same as "too big to succeed". Why should they try to "succeed" when they can't "fail"? I can not try to succeed and have the same result, that of all of the failing, and if I know that the result of that failure is that there are no consequences and it's business as usual, I'm taking the day off! I'm not going to work my ass off, just to end up "failing" when I can lounge around and do nothing and get the same result. Why is AIG any different? I don't think that they are.

Liddy also had this to say about one of the consequences of not paying employees bonuses that they were "promised" and were "expecting": "....the company will have trouble attracting and retaining the best and the brightest ... if employees believe that their compensation is subject to continued and arbitrary adjustment by the US Treasury." Um, Mr. Liddy, sir? Yeah, I understand all of that. But see, you don't have the best and the brightest! No, you seem to have the worst and the dumbest! Your company already has trouble attracting talented employees. That's why you're getting bailed out again!! The "best and the brightest" are no where to be found at AIG! (And don't go looking in the US Treasury for them either. They're certainly not over there.) And if you think that's even a valid argument, you're clearly not one of the "best and the brightest" either. Sir.

Worst. Reason. Ever.

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Doom - Part Deux

It's here. Finally. Doom. Doom Part Deux, actually, as the fine folks over there at The Wall Street Journal Online have informed us that the "TARP Funds' Second Half Set For Release as Senate Signs Off on Request".

And how is that Doom, Part Deux, you ask? This is the second half of funds. (Now, "funds" is just a nicer term, one that doesn't get you all worked up into an angry and frenzied lather, for "taxpayer money". "Taxpayer money" is just a nicer term for "your money". But if the government said "your money" every time they actually said "funds", there would be an uprising amongst the villagers, torches and all, marching upon the White House, the Capitol, the Senate and even the Washington Memorial (just because people would be that angry.) So if this is the second half, what did they do with the first half? Good question. They don't really know exactly where all the money went and who did what with it. Bad answer.

Am I surprised? No, of course not, because I predicted this. Instead of focusing on the TARP bill itself, those self righteous, egotistical and self serving members of Congress held it hostage until they could have one of their little pet pork projects (the P-cubed) added into the bill. They clearly were not paying any attention to what the bill was about, as their heads were too far up their respective arses to pay attention to anything. All they wanted was to have their needs met so that they could feel good about themselves. (They really didn't need the TARP bill to do that. These guys suck and yet they act like they are doing a simply marvelous job. Well, they're not and their approval rating shows that their delusions of grandeur are not enough to persuade the majority of the country to believe them.)

There were things thrown in the TARP bill like:

• $192 million to Virgin Island and Puerto Rican rum producers
• $128 million to auto racing tracks
• $33 million for corporations that operate in American Samoa
• $10 million for small-to-medium budget film and TV productions
• $18 billion in clean-energy incentives so businesses can give benefits to employees who bike to work
• An extension of credits for businesses that employ people that live on Indian reservations
• $10,000 tax credit for training of mine rescue team members
• $6 million to the manufacturers of wooden arrows
• Reduction of import duties on some imported wool fabrics, transfers other duties to Wool Trust Fund to promote competitiveness of American wool

(Bummer. I was really hoping for some sort of a P-cubed for blogs.) Arrows? Wooden freaking arrows? THAT was your priority, you asshats? (And who knew that we needed to beef up the American wool market? I'm trying to remember the last time I wore anything made of wool. Actually, I'm trying to remember the last time I wanted to wear anything made of wool. Huh. That would be never. On both counts.) You wanted to borrow $700 billion from the taxpayers and the taxpayers relented because we're told that if this didn't happen that day the nation's economic situation would worse and we would be reading about the Great Depression and wishing that we had it so good! Not only did it take you over a week to pass the TARP bill (that's where the red flags went up for me. What happened to now? Oh, right. You have to write your wooden arrow proposal and shove it in there first. Good Lord. Could you please use one of those arrows and shoot it at me please?)

So while you guys were worried about yourselves and how self-important you could feel about everything when it was done, you seem to have overlooked one key element in this whole dealio. You didn't include anything about G-D accountability! There wasn't anything in there about how to track the money that was being given to the banks (so that they could have some cash flow and feel OK about beginning to lend more freely again). There wasn't anything in there about how the money was supposed to be used once it was given to the banks! And guess what happened?

Correct. You gave away the first half of the money (at least someone put some restraint on that plan) in your "effort" to help out banks that were having cash flow problems because they were too incompetent to not loan all of their money to people who can't afford to pay it back. And the banks took that money (who wouldn't?) but they don't seem to have done what they said they were going to do with it. Interesting. Oh, wait! That's right! There weren't any provisions on what they had to do with the money, that's right! They could have taken that money and built amusement parks that catered to child molesters, as there was nothing that said they couldn't and nothing could have been done if they had. Good plan! What's the plan for Round Two?

The same thing?!!? Are you effing kidding me?!

Basically, yes, that's the plan. This time, they are asking for the other half, the rest of the $700 billion of our money to be released so that they can use it to "spend $50 billion to $100 billion on a "sweeping" foreclosure-prevention effort." But they seem to be keeping the "how" part of that plan a secret, because I can't find any details on what they plan to do with that boatload of money. It wouldn't matter anyway, as their plan is flawed based upon that statement quoted above.

Everyone seems to be acting as if those who are being "foreclosed upon" and are "going to lose their home" are those who have been victims of these terrible economic times. They act as if every single foreclosure that is occurring is happening to someone who was perfectly capable and able and willing to pay for their mortgage and did...right up until the s-storm hit the financial sector. They act as if no one took out loans that they couldn't afford to pay back and now their home is in foreclosure. They act as if no one bought several houses with the intention of flipping them and making a profit and, unfortunately, did so right as everything finally started to fall apart and now they're stuck with a bunch of houses that they can't sell. They act as if no one bought houses with falsely (yet unknown at the time) inflated prices and when the price of the home dropped, they were then upside-down on their mortgage and decided to just walk away from it. All of those things are happening more often than people who are just hit with "troubled economic times".

You can't lump all of those situations into just one big pile and call it "the foreclosure problem" and then throw money at it to try to fix it. Do any of these Senators, Congressmen, Representatives have any sort of background or history in economics? Do any of them have any sort of economic education? Economic degrees? Anything at all relating to how the economy works? The answer is approximately 15%. That's not enough.

But you know what would be even better than those guys having any sort of knowledge about how the economy works and how banking systems work? What would be better is if any of them had the slightest hint of what reality looks like. If any of them could just come back down to earth for a while and see what's really going on, they might be able to craft a better solution than to simply bellow out, "More money, please!" (I picture them doing so dressed like kings, with a big turkey leg in one hand and a goblet of grog. Wait, grog was for pirates, right? What did kings drink? Ah, we'll pretend they captured the pirates and stole their grog.)

"The Obama team hasn't detailed where it will direct the next $350 billion beyond foreclosure efforts. It is expected to continue purchasing equity in financial institutions and might also buy troubled assets clogging the financial system." But wait. They already did that! That didn't work! Why are you going to keep doing it?! This doesn't sound very much like "change", Barry! I distinctly remember being promised "change"!

In case you have been too busy swooning over Barry to realize this, let me point out that he makes more statements that say absolutely nothing, yet you think that he's said something! And not only that, you think that he's said something brilliant and important! But in reality, he's just given you a bread sandwich. Two pieces of bread, a little bread sauce, bread in the middle, that's it. Nothing to it.

You want to have the American people have "faith" in you, Barry? You need to first figure out WHY the economy is the way it is BEFORE you throw more money at it. You also need to figure out WHY the first half of the TARP money didn't do any good. While you're at it, figure out where that first half of the TARP money went. Then, before any more perfectly good cash gets thrown out the window, start holding people accountable. Start putting provisions in place so that this won't happen again. This pile-o'-crap that the country is in right now didn't just blow in like Hurricane Katrina. This was man-made. Greed made this s-storm happen. But has anyone been held accountable? No. No one. If there aren't any consequences, what's to stop this from happening all over again? Nothing. Which, coincidentally, is exactly what we will all have left by the time you're done spending all of that money without knowing what in the world you're doing.

Doomed. Our doom-ation is upon us. I'm serious. This will not end well. Take those wooden arrows and shoot me with them. Dip them in poison, set them on fire and shoot me with them. The agony from that will be a lot less painful than how this TARP thing is going to turn out.

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