And Nothing Ever Changes

The fact that A.I.G. continues to distribute executive bonuses, regardless of prior arrangements, is nothing short of criminal. Here is a giant insurer that has already been given over $170 billion dollars of American taxpayers' money, and yet, they still have the audacity to pay out an additional $165 million in "retention" bonuses. From the New York Times:

The bonus plan established for the financial products unit before the federal government stepped in called for $220 million in retention pay for 400 employees for 2008. About $55 million of that was paid in December and the remaining $165 million was paid on Friday.

The retention plan also calls for another $230 million in bonuses for 2009 that are due to be paid by March 2010. Combined with the 2008 bonuses, that would bring the total retention pay for financial products executives to $450 million.

I'm sure I can speak for most Americans when I say that I do not give a damn about your bonuses. We all get a paycheck, and we make it work. Your company screwed up royally, and yet we all have to suffer the consequences. As I said, nothing ever changes. Treasury Secretary Timothy F. Geithner could only pressure them to lower their next year bonuses by 30%. This is inexcusable. There should be no compromise. Cut the bonuses out completely or A.I.G. should be cut loose. Good luck.

U.S. Government Now Owns Over 80% Of A.I.G.

According to the New York Times, the U.S. government has just agreed to give American International Group (A.I.G.) an additional $30 billion dollars in an attempt to further stabilize the failing insurer. The article continues:

The intervention would be the fourth time that the United States has had to step in to help A.I.G., the giant insurer, avert bankruptcy. The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets.

The loss that A.I.G. is preparing to report on Monday would be the largest ever by any company in a single quarter. Still, of the $62 billion loss being reported, only about $2 billion is a cash loss. The rest is the result of noncash items like write-downs on the value of the company’s assets.

If I know anything about how the stock market works, I would imagine that A.I.G. stock prices will dip significantly at the start of Monday's trading day. We shall find out.

[Update] - Well, A.I.G.'s stock price did not dip, but the market is down significantly. The Washington Post has the news:

The Dow plummeted 93 points, or 1.3 percent, to 6,969 about 24 minutes into trading -- a level not seen since 1997. The Standard & Poor's 500-stock index fell 1.4 percent, or about 10 points, while the tech-have Nasdaq fell .5 percent, or 7 points.

Shares of AIG were up 7 cents, or 17 percent, to 49 cents in early trading but are off 99 percent for the year.

Read the rest of the story here.