Chaos at AIG

[KrazyHorse]

Before I even read what that opinion is (I will, I promise) let me first say that my opinion on that is not very strongly held...but my opinion on whether CONGRESS is likely most suited to be able to answer that question is rather stronger.

[KrazyHorse]

Blech. Second sentence of that article:

The bonuses, of course, are ridiculous.

Talk about begging the question.

[KrazyHorse]

The rest of the article is more thoughtful.

[DanS]

It is still somewhat linear in its thinking, however. For instance, how about hiring Goldman's derivatives department to unwind the book, giving them a taste of upside based on how well they do it?

[KrazyHorse]

Because Goldman's people are getting taxed too.

[DanS]

OK, Pimco.

[KrazyHorse]

At least they will be if they don't return at least 5 billion by the end of this year, as I read the House bill.

[Darius871]

With regulatory burdens rapidly increasing like this you're going to find more firms publicly attempting to hand back that hot money. Unless the TARP administrators want to make those requirements explicit and public they're going to have to take the money back.

That's assuming the public would give two sh*ts about the poor downtrodden banksters' whines about "regulatory burdens" in this political climate, especially after the AIG fiasco has broken out the torches and pitchforks. IMO they could publicize it all they want, even to the point of throwing duffel bags full of cash on the White House lawn in a live broadcast, but regulators would still have all the power both legally and politically. Don't f*** with the man, especially in rare times like these when he's wildly popular.

[Darius871]

Obama will call for increased oversight of 'executive pay at all banks, Wall Street firms and possibly other companies' as part of sweeping plan to 'overhaul financial regulation', NY TIMES reporting Sunday, newsroom sources tell DRUDGE... Developing...

This is an unlinked Drudge headline, which means he dosen't have enough to put up a story yet.

ALL of them??? If that's even half true, even though I'm no fan of Rand, it wouldn't surprise me or particularly anger me if ALL financial executives simply don't show up for work one day in response. Hell, even the mere rumor of a general strike on their part would probably cut the Dow in half within hours.

[KrazyHorse]

That's assuming the public would give two sh*ts about the poor downtrodden banksters' whines about "regulatory burdens" in this political climate, especially after the AIG fiasco has broken out the torches and pitchforks.

No, it assumes that the public would give two ****s about being repaid. Do you really think that the public DOESN'T WANT to be repaid by Goldman & co ASAP? What if head of BoA and a bunch of other banks come out and say "we tried to repay the TARP money but the government said no thanks"?

In other words, whether or not the regulations stop with the companies who still hold TARP money is a different question from whether or not the companies are allowed to repay TARP. So far, all of the noise is about regulating TARP recipients.

[KrazyHorse]

By the way, Goldman's CFO has already said multiple times that they plan to repay the TARP this year.

[Darius871]

That's assuming the public would give two sh*ts about the poor downtrodden banksters' whines about "regulatory burdens" in this political climate, especially after the AIG fiasco has broken out the torches and pitchforks.

No, it assumes that the public would give two ****s about being repaid. Do you really think that the public DOESN'T WANT to be repaid by Goldman & co ASAP? What if head of BoA and a bunch of other banks come out and say "we tried to repay the TARP money but the government said no thanks"?

In other words, whether or not the regulations stop with the companies who still hold TARP money is a different question from whether or not the companies are allowed to repay TARP. So far, all of the noise is about regulating TARP recipients.

Of course they want it paid back ASAP, but only if by "P" you mean not just "possible" but "practicable," i.e. after the regulators' stress-testing has given the returning institution a clean bill of health. If some eeeevil baby-eating bankster claims "we tried to repay the TARP money but the government said no thanks," Uncle Sam could simply respond "BS, they're just trying to weasel out of the improved regulations we need to prevent this mess from ever happening again, plus we still haven't finished the stress-testing necessary to determine whether they'd go insolvent without the money and bring down the whole system with them, [the sky is falling, doomy doom, yada yada], so they need to hold onto that money for now until we think returning it would be safe for the financial system" etc., I think the public in its present mindset would lend more credibility to the latter, at least temporarily. They'll keep their hand up each bank's ass for as long as humanly possible.

[Darius871]

After all, we know it's been over a month since Richard Davis tried going "public" about wanting to pay the money back but not being allowed to, and yet that quickly dissipated like a fart in the wind. As recently as yesterday he made another speech to the same effect that got into the news again, but again no outrage. If taxpayers are so anxious to get their money back not just now but yesterday, then why was there no massive upwelling of public support for him?

[DanS]

The bonus outrage is a crystallization of an issue rather than an issue itself. Lots of ****'s going down. It's hard to keep all the ways we're getting screwed by the bankers straight in my mind. And besides, my outrage quota has long since been busted. Best to tune it all out.

I still want my money repaid, however. Post-haste.

[KrazyHorse]

In other words, you think that the public DOESN'T want to be repaid immediately.

And I think that you're absolutely wrong on that.

They could barely be convinced to give the banks money when the administration AND the banks were both in favour of doing it. Now when the banks say they don't need the money you think the will will be there to say no to repayment?

Don't be silly. All the healthy banks are going to repay the money early, as well as some of the not-so-healthy ones (the ones that, if TARP is a good idea, we WANT to have the money). Only desperately ill ones will keep the cash.