Government unveils a revamped rescue package to insurance giant American International Group and will
CHARLOTTE, N.C. -- American International Group Inc., once the world's largest insurer, said Monday it lost $61.7 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history, amid continued financial market turmoil.
The results come as the U.S. government also Monday announced a restructuring of a bailout plan for the troubled insurer, extending $30 billion in additional aid to the company.
New York-based AIG said it lost $22.95 per share in the last three months of 2008. It lost $5.3 billion, or $2.08 per share, in the same quarter a year ago.
Revenue fell to negative $23.8 billion, as the company had to reverse gains it recorded from investments in past quarters.
The latest results include $7.2 billion in unrealized losses and credit valuation adjustments at AIG Financial Products, the source of credit-default swaps, and pretax losses of $21.6 billion tied to the declining value of AIG's investment portfolio.
AIG's general insurance business swung to a loss on $2.8 billion in net realized capital losses. General insurance net premiums dropped 16.3 percent to $9.2 billion, and net premiums earned fell 5.9 percent to nearly $11 billion.
Adjusted to exclude certain items, operating losses totaled $37.9 billion, or $14.17 per share, versus a loss of $3.2 billion, or $1.25 per share, last year.
Senator Barack Obama received a $101,332 bonus from American International Group in the form of political contributions according to Opensecrets.org. The two biggest Congressional recipients of bonuses from the A.I.G. are - Senators Chris Dodd and Senator Barack Obama.
The A.I.G. Financial Products affiliate of A.I.G. gave out $136,928, the most of any AIG affiliate, in the 2008 cycle. I would note that A.I.G.’s financial products division is the unit that wrote trillions of dollars’ worth of credit-default swaps and "misjudged" the risk.
Not having an enormous amount of time this past week or so, I'm not sure if I'm exactly accurate, but I thought I heard something that AIG was claiming that the bonses are part of the execs contracts.
Obviously they cannot be bonuses if they are given out regardless of the financial situation of the company.
I always thought if a business was doing bad, it's execs don't get their bonuses, or I should say, bonuses and the amount of them would be tied to how well the business is doing.
In times of fiscal crises, execs should be just like employees. Employes get raises eliminated, increases in say insurance premiums, forced unpaid furloughs, cuts in pay, and layoffs.
Executives should be handled accordingly
Optimists close their eyes and pretend problems are non existent. Better to have open eyes, see the truths, acknowledge the negatives, and speak up for the people rather than the politicos and their rich cronies.
AIG told to return bonuses Lawmakers weigh punitive tax on money doled out by insurer BY LAURIE KELLMAN The Associated Press
WASHINGTON — Talking tougher by the hour, livid Democrats confronted beleaguered insurance giant AIG with an ultimatum Tuesday: Give back $165 million in post-bailout bonuses or watch Congress tax it away with emergency legislation. Republicans declared the Democrats were hardly blameless, accusing them of standing by while the bonus deal was cemented and suggesting that Treasury Secretary Timothy Geithner could and should have done more. While the White House expressed confidence in Geithner, it was clearly placing the responsibility for how the matter was handled on his shoulders. Geithner sent a letter late Tuesday to congressional leaders informing them that he was working with the Justice Department to determine whether any of the AIG payments could be recovered. He cited a provision in the recent economic stimulus law that gave him authority to review compensation to the highest-paid employees of companies that already have received federal assistance. Fresh details, meanwhile, pushed outrage over AIG ever higher: New York Attorney General Andrew Cuomo reported that 73 company employees received bonus checks of $1 million or more last Friday. This at a company that was failing so spectacularly that the government felt the need to prop it up with a $170 billion bailout. The financial bailout program remains politically unpopular and has been a drag on Barack Obama’s new presidency, even though the plan began under his predecessor, George W. Bush. The White House is well aware of the nation’s bailout fatigue — anger that hundreds of billions of taxpayer dollars have gone to prop up financial institutions that made poor decisions, while many others who have done no wrong pay the price. White House officials, for the fi rst time, on Tuesday night said Geithner told the White House about the bonus payments last Thursday, and senior aides informed the president later that day. The officials spoke on condition of anonymity to discuss internal details of the timeline involving AIG. The administration wouldn’t be pleased to hear what Maria Panza-Villa, of Hillsboro, Ore., had to say. “Wasn’t Obama supposed to fix this?” asked the mother of two who said she has lost three jobs since November as one employer after another went under. AIG chief executive Edward Liddy can expect a verbal pummeling today when he testifies before a House subcommittee. On Capitol Hill late Tuesday, House Democrats directed three powerful committees to come up with legislation this week to authorize Attorney General Eric Holder to recover massive bonus payments made by companies such as the ones paid last week by American International Group Inc. Senate Democrats, meanwhile, suggested that if the AIG executives had any integrity, they would return the $165 million in bonus money. One leading Republican, Sen. Chuck Grassley, R-Iowa, even suggested they might honorably kill themselves, then said he didn’t really mean it. Whatever the process, lawmakers of all stripes said the money — generally “retention payments” to keep prized employees — belongs back in the government’s hands. “Recipients of these bonuses will not be able to keep all of their money,” declared Senate Majority Leader Harry Reid in an unusually strong threat delivered on the Senate floor. “If you don’t return it on your own, we will do it for you,” echoed Chuck Schumer of New York. Not all Democratic leaders were racing in that direction. Penalizing people with the tax code could be inappropriate, declared Rep. Charlie Rangel, D-N.Y., chairman of the taxwriting Ways and Means Committee. He said, “It’s difficult for me to think of the code as a political weapon.” Others saw the connection as reasonable and relevant. House Financial Services Committee Chairman Barney Frank, D-Mass., noted that the government, through the bailout, is now an 80 percent owner of the company and suggested that was grounds to sue to recover the bonuses. Republicans said Obama and his ............http://www.dailygazette.net/De.....amp;EntityId=Ar00100
Obama Received a $101,332 Bonus from AIG March 17, 3:01 PM · 555 comments ShareThis Feed
AP Photo/Ron Edmonds
Senator Barack Obama received a $101,332 bonus from American International Group in the form of political contributions according to Opensecrets.org. The two biggest Congressional recipients of bonuses from the A.I.G. are - Senators Chris Dodd and Senator Barack Obama.
The A.I.G. Financial Products affiliate of A.I.G. gave out $136,928, the most of any AIG affiliate, in the 2008 cycle. I would note that A.I.G.’s financial products division is the unit that wrote trillions of dollars’ worth of credit-default swaps and "misjudged" the risk.
The Washington Post reports a "mob effect" at A.I.G financial products division:
A tidal wave of public outrage over bonus payments swamped American International Group yesterday. Hired guards stood watch outside the suburban Connecticut offices of AIG Financial Products, the division whose exotic derivatives brought the insurance giant to the brink of collapse last year. Inside, death threats and angry letters flooded e-mail inboxes. Irate callers lit up the phone lines. Senior managers submitted their resignations. Some employees didn't show up at all.
With the anger and rage that is being exhibited against A.I.G., perhaps the bonuses Obama received from A.I.G. explain Obama's A.I.G crocodile tears.
Now that the Wall street Journal has revealed that A.I.G. paid bonuses of $1 million or more to 73 employees, it's time to ask if recipients of A.I.G. "bonuses," including President Obama, will give what now ought to be taxpayer money back?
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Not all Democratic leaders were racing in that direction. Penalizing people with the tax code could be inappropriate, declared Rep. Charlie Rangel, D-N.Y., chairman of the taxwriting Ways and Means Committee. He said, “It’s difficult for me to think of the code as a political weapon.”
Ya, I bet he doesn't want to see that happening, considering his multiple dwelling units, eh?
A company that needs a $170 billion taxpayer bailout is a failed company. The executives that led that company are failed executives. But instead of having to face the consequences of their failure responsibly through bankruptcy or receivership, AIG and its Wall Street 'counterparts' are being rewarded for their recklessness with our money!!
Thanks to the Bush/Obama/Geithner policy of bailing out failing companies, now we have the worst of all possible scenarios:
A taxpayer subsidized, government supervised private company; an unsustainable public/private hybrid that is too public to make its own decisions and too private to be responsible to the taxpayers that are keeping it alive.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
I'll lay blame on Bush when it's warranted, I don't have a problem with that. But, for this "bailout" that supposedly started under his administration, I remember when it was being discussed - Pelosi was gonna make sure it was on Obama's desk day 1 ... hoping that Bush would approve it before then. Bush met with Obama, during the transition, and he asked Obama what he wanted to do. Obama made a big song/dance about "only one president at a time" - but I'd bet hard cash that the two agreed, at obama's insistence that the ball start rolling sooner than later.
BARACK OBAMA CLAIMS TO BE OUTRAGED OVER THE FACT THAT AIG, WHICH HAS RECEIVED TENS OF BILLIONS OF TAXPAYER DOLLARS TO KEEP IT AFLOAT, HAS GIVEN 160 MILLION DOLLARS WORTH OF RETENTION BONUSES TO ITS EXECUTIVES AND OTHER EMPLOYEES. HE’S SO OUTRAGED THAT OBAMA EVEN CLAIMED TO HAVE GOTTEN CHOKED UP OVER IT AT A PRESS CONFERENCE THE OTHER DAY. LISTEN TO THE CLIP.
A MOMENT OF HIGH HILARITY, OBAMA LAUGHS WHILE ROME BURNS. BUT IT TURNS OUT THAT HIS OUTRAGE MIGHT BE NOTHING MORE THAN SIMPLY CROCODILE TEARS BECAUSE ACCORDING TO THE RECORDS, OBAMA RECEIVED A TOTAL OF OVER ONE HUNDRED THOUSAND DOLLARS WORTH OF CAMPAIGN CONTRIBUTIONS FROM AIG DURING THE 2008 ELECTION CYCLE. A NICE LITTLE BONUS OF HIS OWN. SO OBAMA MAY BE TALKING BIG, BUT IN THE END WE’LL SEE WHAT ACTUALLY GETS DONE TO TAKE THE MONEY BACK FROM THESE THIEVES. AND TIMOTHY GEITHNER, THE BOY TREASURY SECRETARY? A NICE LITTLE BONUS OF HIS OWN. WHOSE SUPPOSED TO BE IN CHARGE OF GETTING THIS MONEY BACK? WELL THAT’S AN INTERESTING STORY, TOO. BECAUSE AS IT HAPPENS, HE PLAYED A PIVOTAL ROLE IN BAILING OUT AIG TO BEGIN WITH.
AND EVEN TODAY, WHEN CONGRESS WAS SUPPOSED TO BE GRILLING AIG CEO EDWARD LIDDY ON CAPITOL HILL IT SEEMED LIKE ONE CONGRESSMAN AFTER ANOTHER MADE A POINT OF SAYING HE WASN’T TO BLAME. MADE ONE EXCUSE AFTER ANOTHER, PERHAPS OBAMA ISN’T THE ONLY ONE THAT AIG HAS GIVEN MONEY TO. EVEN THE CODE STINKERS WHO WERE AT THE HEARING, AND FOR ONCE I AGREE WITH, WERE TOLD BY THE CHAIRMAN REPRESENTATIVE KANJORSKY, TO PUT DOWN THEIR SIGNS, SOME OF WHICH SAID FIRE GEITHNER. IT SEEMS THAT NOT EVEN THE MARXIST WING OF THE DEMOCRATIC PARTY HAS BEEN ABLE TO OVERCOME ALL THE MONEY THAT HAS BEEN SPREAD AROUND WASHINGTON, D.C., BY AIG. LOOKS LIKE WHEN IT COMES TO THE DEMOCRATS, BEING LEFT IS GOOD, BUT HAVING LOOT IS BETTER.
Logged
