Monday, March 16, 2009

A.I.G Client List

AIG did in fact release the list of clients who received large chunks of its government bailout money between September and December 2008. Leading the list: Goldman Sachs at nearly $13 billion: their former or current employees were involved in arranging the AIG bailout. Merrill Lynch got nearly $7 b and Bank of America over 5, meaning their now-combined entity absorbed over $12 billion. And Societe Generale of France and Deutsch Bank of Germany each recieved nearly $12 bllion, Barclay's $8.5 billion, and UBS of Switzerland another $5 bil. 70% of the total went to GS and then the two big French and German banks.


Pro said...

AIG = Allowing Irreversible Greed.
AIG = All in Greed.
AIG = Arn't I Greedy.
AIG = A$#holes, in general.

This is sick. Why in the world are we helping these companies that keep sending millions to people who do not know how to run a company? They cry yet get paid millions on the "average joes" taxes. Furthermore, I fear this is just the tip of the iceberg. Look what Enterprise rent-a-car did to get bailout funds:

Not to make excuses for these people, but the bailouts are making crooks out of everyone that touches the money.

Gerry Barnett said...

The AIG bonus bit is nothing, really. It appears AIG was the designated set of pipes to push money into these other companies (the client list) without requiring them to make a deal with the government which would mean some cents on their dollars at risk.

Rather than dealing with each, and getting concessions, the government "bailed out" AIG--meaning, "used AIG to bail out the client list"--("no problem here, move along folks"). Essentially a game of chicken in which the government blinked. AIG bailout=cover the risk in bad debt by all these others as if it is business as usual.

The bonuses flap at AIG must seem really unjust to them when all they were doing was covering the government deal to allow the client list to make good--with salaries, not just bonuses, and shareholder value too. Pick on AIG bonuses, yeah, but don't lose sight of the big picture. These guys are taking the hit to save all their buddies.

Chris Newfield said...

I think both of you are right.

Still leaves me with the question why. Why uses AIG as pipes to water Societe Generale? to say "no problem here" - you guys are still the smartest guys in the room, and banks are always better at economics than gov? Is it O being a "Chicago School Democrat"? Yes to all of this (see today's entry) - and it's a middle ground that has worked well politically (Kennedy-Clinton-Obama) but which is getting crushed by the guys who took banker govt to its end point.

Gerry Barnett said...

Yeah, so why pass through to help out these foreign banks? Stuff is connected. I can imagine quite a few nations are checking on their funds and perhaps non-money parts of these deals are not being reported.

Just speculation, but otherwise, is it too easy for this to be the unfortunate but necessary collateral benefit for the bit that helps Goldman Sachs?

It's hard to make sense of, leaving one with a few options--they are smart and I'm not, they aren't smart and what I am doesn't matter, or I'm not supposed to be able to figure this out because all the bits aren't there for the public. I'm just supposed to get angry with all the rest, and not get curious. Let it all discharge on AIG--any convenient target will do. Is that it?