Thursday, March 19, 2009

Outraged about nickels as the banksters steal gold bars out the back

(Type outrage into Google News and you get 27,523 hits with roughly 15,000 coming in the last 24 hours! Ah yes... let's vent our spleen about 165 million as we give AIG over 175 billion including $$$... get ready for this...for investment banks to escrow that made bad speculative bets where they will need to pay out HEDGE FUNDS that bet that housing was going to be crushed!

Oh but don't worry about that 165 million... we'll take it out of the next 30 BILLION we're going to give 'em, whoops scratch that we'll just tax them 90%.

In the rarefied air of pablum narrative to save the drowning man it is in with the hypocrisy and out with the rage.

We are just so outraged.. and we're not going to take it anymore.-AM

Wall Street Journal
March 19, 2009
By Michael M. Phillips

WASHINGTON -- Lawmakers really want the American people to know that they, too, are "outraged" about the $165 million in bonuses paid to American International Group executives.

They were so outraged, in fact, that they turned Wedndesday's congressional hearing on AIG into a daylong expression of outrage. Members of the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises mentioned their outrage at the big insurer 18 times. And that was during 45 minutes of opening remarks, even before the immediate target of their outrage, AIG Chief Executive Edward M. Liddy, entered the room.

"I certainly join my constituents in their outrage," offered Rep. Ron Klein, a Florida Democrat.

The subcommittee chairman, Rep. Paul Kanjorski, gave Rep. Randy Neugebauer, a Texas Republican, only one minute to speak, so he didn't waste any time. "I'm going to go ahead and say I'm outraged as well," he began.

Some Republicans wanted credit for their earlier outrage, saying they aimed it at those who supported bailouts of AIG and others in the first place -- presumably Democrats. None mentioned the role of former President George W. Bush, who was in the White House when the rescue money started flowing to AIG.

Rep. Jeb Hensarling (R., Texas) forecast more anger to come. The furor over AIG bonuses is "simply the outrage of the week, and the week isn't half over yet."

(Far be it from me to interrupt this righteous indignation but I though it might be appropriate to include the following nugget from a regular contributor to Fleck.-AM)

I worked for AIG FP [financial products] from March 2002 until June 2006, and quite frankly, if I hadn't, I don't think I'd have half the understanding of current matters that I might. Most importantly, I had and have a number of very close friends at AIG FP, who continue to work under the most extraordinary pressure to ensure that Uncle Sam does not lose one penny more than is necessary. I did not wish to put anything in writing which might directly or indirectly contribute to instability at AIG: There is nothing worse than someone sticking the boot into a former employer. It is tactless, tasteless and unedifying. I would respectfully suggest that close to 100% of policy makers do not understand the complexity and delicacy of tri-partite and sometimes quad-partite negotiation required to assign or novate one single contract between AIG FP and a counterparty, to a third party. My friends, none of whom was responsible in any way for the chain of events that lead to AIG's demise, continue to perform this systemically important task with great skill, and care. So, regarding the disgusting, populist, retributionist mauling of AIG FP currently under way, I'd just like to make a few points: (a) Someone at a very senior policy level never read the fine print of the AIG FP employment contracts; (b) I find it difficult to reconcile the current witch hunt with respect for the rule of law; (c) Why would anybody with two brain cells participate in a rumored 'Public-Private Partnership' to fix the U.S. financial system after watching he events surrounding AIG over the past few days? (d) If you think Capitol Hill is angry now, imagine how angry they are going to become Q3/Q4 when it is clear there is no economic recovery and non-farms has printed or is printing minus one million per month. Financial market prices are a reflection of the behavior of thousands of participants to certain stimuli. I sincerely hope that Capitol Hill does not infer that because stocks were higher yesterday, this is a sign Mr. Market agrees with their approach to AIG. Speaking of Mr. Market, the spread between perception (equities) and reality (credit) is widening sharply once more. By now I suspect readers know which of the two matters.

(This reader most certainly knows what it means, i.e., buckle up Dorothy, the ride ain't over yet. In the spirit of always being contrarian to the impassioned mob this humble blogger reports the above to suggest there is always two sides to the story.-AM)

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