More on AIG, but this involves California cities and California tax money.
First here are some clips from the REUTERS story that gives an overview of Sunday’s newest AIG revelation.
American International Group, the insurer that received a taxpayer bailout of up to $180 billion, said on Sunday it used $12.1 billion of those funds to make payments on guaranteed investment contracts held by cities across the country.
California municipalities received the most — $1.02 billion — from the contracts, which are structured investments that guarantee a fixed rate of return to municipal bond issuers, AIG documents showed. Cities and other issuers enter into the agreements, knows as GICs, to earn that rate of return on proceeds from their bond issues until they need to spend the money on projects.
In other words, as California taxpayers we gave the state bond money for this or that project, which it, in turn gave to AIG so our bond money would earn a decent rate of interest until we needed it.
AIG, in turn gambled with our money in such fun areas as credit default swaps, so when the time time for California (and other states too) to get our money back, AIG didn’t have it. So…..they borrowed money from us—the U.S. taxpayers—to pay us (the California tax payers) back our money. A little over a billion dollars worth.
And then they gave themselves bonuses.
I guess we’re going to have to listen to daily griping from those who didn’t oppose the bailouts from the beginning. I guess we’re going to have to listen to feigned outrage and posturing from Senators and Congressmen (e.g., Barney Frank), who approved the “investments” and yet can’t run our nation’s own finances adequately. This experiment in socialism isn’t working out too well, is it?
Wells Fargo Assails TARP, Calls Stress Test ‘Asinine’
Last one…THE AIG BONUSES
“they want to give back the money”
Fine. Of course they won’t. Most of them can’t. Paulson screwed that deal up because he wanted to protect the failing banks’ reputations. Idiot. Also, there’s no guarantee that WF didn’t acquire a box of snakes in underestimating the $35 billion write down on their merger. There was discussion on the Time economics blog that there could be a very rough patch if the estimate is off by even 5%. These guys aren’t half as smart as they think they are, but now WF is even bigger – “too big to fail.” IMHO this is smoke being blown out of somebody’s posterior. False bravado. If they made a smart business move, if their institutions were clearly profitable and not insanely over-leveraged or essentially bankrupt they could still raise private equity and give the billions back. But it won’t happen. There is a ton of potential investment capital looking for a save haven, preferably with viable growth and profit on the horizon. It would be a no-brainer, unless this is all bullshit and these guys are as lame and over-extended as they appear to be to even the most casual observer.
I love how the resident moron screams about accountability, mandatory standardized testing, etc. in the schools, but goes all crybaby when accountability and standards are demanded of financial institutions taking public funds. The truth is that in this crowd 2+2 doesn’t = 4. And they expect to be taken seriously.
Wells Fargo calls the stress-test asinine?
Isn’t a stress-test essentially a business plan? Here’s what a bunch of ‘crazies’ offer the budding entrepreneur:
“Too many people think strategic planning is something meant only for big businesses, but it is equally applicable to small business. Strategic planning is matching the strengths of your business to available opportunities. To do this effectively, you need to collect, screen, and analyze information about the business environment. You also need to have a clear understanding of your business – its strengths and weaknesses – and develop a clear mission, goals, and objectives. Acquiring this understanding often involves more work than expected. You must realistically assess the business your are convinced you know well.”
But what do the folks who wrote the above quote know about American business? They’re only the US Small Business Administration. http://tinyurl.com/djsvmp
As one of the guys who hand delivered two letters to my congressman’s office urging him to vote against the bailout, I am not surprised by all new strings attached that congress and Obama are trying after the fact to add to the FREE money which they have been handing out.
It is also not surprising that Texas is turning down the money from Washington. As any one will a smidgen of experience knows – “There is no such thing as a free lunchâ€Â.
reg, your argument about accountability is completely illogical, not that you would understand.
However, I’m not claiming that there should be standards for companies taking taxpayer money (vs. your “public funds,” which assumes that Obama voters actually paid taxes). I opposed the government bailouts from the start, but once they were made, the rules shouldn’t change after they were made.
As a member of a discredited profession (see “Anderson, Arthur” and “Enron, Sunbeam Products, Waste Management, Inc., Asia Pulp and Paper, the Baptist Foundation of Arizona, and WorldCom”) your comments on accountability are a joke.
reg, your linking me with past white-collar crimes of others makes as much sense as me linking your wife to black violence–unless, it’s true in her case, which it may be…or, to stupidity, as she certainly didn’t use good judgment when she accepted your proposal–unless, she had to for the sake of giving her child two parents. And, maybe you’re a tax cheat because you supported Obama’s appointment of a tax cheat to run the IRS.
You had one pathetic come-back. If attacking me is the best that you can do rather than refuting my analyses, then you should go away.
Go fuck yourself, asshole. First of all, you didn’t make an argument in response to my comment. And you have no “analysis” – you’re analytically incompetent. But more to the point, you’re a racist piece of shit. Literally. You disgust me – and I dare say most of the folks who read your garbage here.
If you want to deny that what is termed “accounting” at the corporate level is very often a shell game (“Mark-to-model” being a great example) make your case. Unfortunately, the reality is increasingly obvious that there have been little-to-no standards of accountability and this could not transpire without folks literally responsible for accounting being in bed with their bosses and lettiing this shit transpire without blowing the whistle. Arthur Anderson was one of the most respected accounting firms in the world and – like many others – blurred the lines of accounting and business consulting (really advice on how to push the envelope and escape the math via complex maneuvers), which was a major source of their profitability. This is well known and well documented.
What you wrote, on the other hand, is offical grounds for kicking your sorry little punk ass if I ever have the misfortune to run into you in person. I’d add “go to hell” but you’re obviously already mired in your own sick little version of it.
As I’ve often said…racist, homophobic punk. That’s the essence of what you’ve got to offer the world.
reg, you pick up left-wing talking points on accounting and try to repeat them without really understanding the accounting theories and history behind them. Instead, you figure that all businessmen are out to get you. Let me know after you’ve passed your first Accounting Theory course and we can discuss it. But, of course, you first have to be accepted into college, so it could ba a long time. Oh, as far as “kicking my ass” goes, you seem to be fixated on it, but I don’t think that a little queer like you is anything for me to fear.
Enjoy your little redneck hell, asshole. You’ve made an ass of yourself on this and other blogs and enjoy the reputation of a flamingly racist, intellectually-challenged, culturally-ignorant clown. Worst – from your perspective of an attention-grabbing little runt desperate to play the jester – you’re not even funny.
Incidentally, shitface – would you like to discuss “mark to model” accounting and explain to us how it conforms to anything known in the real world as “accountablility”, market valuation of assets, or even basic math.
You aren’t even competent to defend your alleged area of “expertise.” You’ve offered nothing but lame generalizations. Total fucking idiot.
reg, it’s over your head–just as is economics…seriously.
BTW, for several years,I taught the CPA Review Course in our city for the most successful CPA Review school in the nation. It’s not something for amateurs.
That’s cool, Woody, about the teaching.
So you’ve got nuthin’ on the subject of how the accountants collaborate with corporate criminals. Time for you to hang up the self-righteous bullshit on subjects on which you’re painfully ignorant. I guess we’ll just stick with the fact that you’re a racist, ranting scumbag.
Worthless…
reg, it would take too much effort to bring you up to the basics necessary for you to even begin to understand complex accounting issues. Pay me, and I’ll consider helping you. Otherwise, I don’t care what you think.
Now, if you want a real education on corruption, try researching union retirement funds.
Go fuck yourself. You’re a coward. You won’t answer a direct question – because you can’t. Racist little shit.
I can answer it a lot easier than you can pay me to. I do this stuff for a living, I don’t like doing it to entertain you, and I’m not wasting time explaining accounting to someone who is both incapable and unwilling to learn.
reg, you have gone completely nuts. Really, go back to your shrink and ask for an adjustment on your meds or a refund on his fees.
You’ve got nothing, you silly little wimp. This is the most ridiculous cop-out yet. And the notion that I’d pay you for anything – even to shine my shoes – is the height of insanity.
“Mark-to-model.” Defend it or shut the fuck up. Guys like ex-CEO, now Board Chairman Dick K at Wells Fargo want us to use this Enron shit to extend their leverage on paper. Of course, anyone with basic economics understanding knows that if an asset is undervalued temporarily by the market, someone will leap in very quickly to make a profit off of that undervaluation. Warren Buffett or some other high-roller would be buying any shit up if it was wildly undervalued. A no brainer – at least in non-crisis times. I don’t think you understand the first thing about this key accounting issue among the big financial players, because you’re a sandbox numbers cruncher doing small business tax returns. Small time shit. (I can’t go into it here for professional reasons, but I regularly work for these very guys who are going cry-baby over being held to the same accounting standards as I have as a small business person. You, as usual, don’t have a clue.)
Now, you’ve wasted far too much of my time.
reg, you’re wrong, as usual, but who cares?
An “expert” who claims expertise but can’t carry any weight in a discussion…impressive.
You’re an intellectually incompetent little punk. It’s too easy to take you down. Best to go back to ignoring your racist, homophobic, moronic drivel.
reg: Blah, blah, blah.
It’s too hard for you to understand that I don’t like to talk about accounting issues when I’m off from work, and I especially don’t want to go over them with someone who is incapable of learning. You can pretend that I don’t understand something, but I can get many CPAs who call me for advice daily to set you straight.
reg, whites who live in the deep south understand the black culture better than non-black people almost anywhere. Regarding fags, I just try to stay away from them. As far as morons go, between you and me, who finished college?
Racist slime, slithering…you and Trent Lott are real down the black folk.
On the decline of corporate accounting into a shell-game, you’ve got nuthin. Coward.
Give it up. All you have is throwing mud.
I’ll be more than happy to throw anyting at a racist pig…but you’ve got nuthin’.
“I’m too smart to comment” – what a fucking joke.
Now crawl back in your pit of darkness, you piece of shit.
A Marxist just wouldn’t understand.