Saturday, December 6, 2008

Democracy in action?

via Eschaton
OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper won a rare suspension of Parliament on Thursday, managing to avoid being ousted by opposition parties angry over the minority Conservative government's economic plans and an attempt to cut off party financing.

Governor General Michaelle Jean -- the representative of Queen Elizabeth, Canada's head of state -- agreed to Harper's request to shut down Parliament until Jan 26. Parliament was reconvened just weeks ago after the October 14 election.

Harper's request for suspension was unprecedented. No prime minister had asked for Parliament to be suspended to avoid a confidence vote in the House of Commons.
Bush must envy Harper about now.

On a more serious note, it shows what a gutless coward the GG of Canada is. Anyone that wants to see how a real GG acts should read up on the King-Byng Affair

numbers numbers numbers

533K jobs lost in November. Unemployment up to 6.7%.

...even worse. October numbers revised downwards to -320K down from -240K. September numbers revised downwards to -403K from -159K.

So by my math that is 403,000 + 320,000 + 533,000 =1,256,000 job losses in the last 3 months. Pretty impressive failure even by Bush administration standards.

Atrios saith ...

But I've long though that Bush was the type of person who who would pour a can of gasoline and flick a match at it on his last walk out of the White House.
I find it very hard to disagree with this assessment.

Astonishing self justifications from AIG

Daily Kos: AIG 'retention' and 'cash awards' draw ire, explanations

The blockquoted stuff is a combination of dailykos and this bloomberg article. My comments are interspersed, I am sure that you will be able to figure them out.
In response to Cummings' letter, AIG's Liddy responded with a letter of his own (full PDF available). Broken down point by point, the AIG's justifications and details for "retention" and "cash awards" are as follows:

1. Because part of the plan is to repay taxpayers by selling some of the individual businesses under the AIG umbrella, "key employees" must be retained to ensure higher value and thus a higher selling price. Competitors are circling to "siphon off" talent.
We would be doing a disservice to the taxpayer – and would place AIG’s asset divestiture plan at risk – if we did not act decisively to ensure that our key employees remain with the company. Our competitors understand how valuable our top executives are, and we are acutely aware that they would like to siphon off our most talented leaders. Additionally, the leadership of our key employees is an important component of the value of the business we are selling. To allow our competitors to more easily recruit our best people would result in significantly less proceeds from asset sales, and less money available to repay our obligations to the government.
The value of the top leaders in AIG is in their ability to extort money from the American taxpayer. I always thought that it would be the basis for a RICO indictment rather than a reason to retain these boobs.

2. If we lose our "key employees," our credit ratings will suffer, which will ultimately affect our ability to repay taxpayers.
A key to the successful execution of our restructuring plan is the maintenance of our current credit ratings. While many of our ratings were recently affirmed, most of them remain on "watch." According to S&P: "The ratings on AIG and its property/casualty subsidiaries remain on CreditWatch with negative implications. We expect to resolve the CreditWatch status of these ratings in 2009, when we will likely get a better picture of the company’s efforts to price and retain its business. Standard & Poor’s expects some loss of business lines and personnel. If those losses are significant and threaten future business prospects, we could lower the ratings further. However, if such potential declines were modest, we could affirm the ratings." AIG’s credit rating, and therefore our ability to repay the taxpayers, is inextricably linked to our success in retaining critical employees.
See point #1. The ratings agencies are complicit in the shitpile coming about in the first fucking place so in my eyes you have more evidence of a conspiracy to commit fraud... RICO strikes again.

3. Reinsurers are requiring us to retain "critical employees" and will cancel our contracts if they leave.
Recently, some reinsurers have begun requesting provisions which would allow them to cancel reinsurance contracts upon the departure of critical AIG employees. Having appropriate reinsurance coverage in place is essential to the risk control for AIG’s operations. Without appropriate reinsurance cover, the magnitude of losses on catastrophic events would seriously injure the financial strength of the company. In addition, AIG plays a vital role in providing risk coverage to many institutions around the world. AIG’s risk appetite would be severely impacted without appropriate reinsurance.
Then let's have a list of the reinsurers that are making these demands, a list of the key employees that they think need to be retained and a detailed explanation of why each of the employees should be retained.
4. AIG filed specifics on the payments with the SEC, and here are some of the details::
Directors approved retention payments for 168 employees – which included approximately 130 employees, plus an additional 38 who were subsequently added based on authority granted by the Committee. These individuals were selected to participate based on their individual performance, the importance of their position to the organization, key client relationships that are crucial to retaining our client base, potential for organizational advancement, degree of position difficulty, degree of flight risk, and their ability to recruit others if they were to depart.

Specifically, 13 of the employees who are receiving retention payments have agreed to delay receipt of the first part of this payment until April of 2009. These 13 individuals are executive officers of the company. The agreement by these 13 executives was an important element in the Treasury Department’s latest agreement with AIG. The timetable for these payments is designed to keep our employees onboard during this critical period.

The base salaries for those involved in these retention payments range from $160,000 per year to $1,000,000 per year, and the retention awards range from $92,500 to $4,000,000. These retention payments will be made in two installments over a 12 month period.
Then let's see the list and the details of the payments and the exact reasoning for each person being on the list. I am too pissed to go look at the edgar site to see if i can find this but if anyone has a link I will be happy to post it.
5. The employees who qualified for these payments are highly specialized and cannot easily be replaced.
These employees are highly specialized and/or are part of businesses that control billions of dollars of revenue and value that will be needed to repay the U.S. taxpayer. Their years of experience with the company and understanding of the vast marketplace makes them critical to our success going forward. In fact, AIG’s compensation levels for key positions are already below companies of smaller size and less complexity.
Considering this group just fucked away somewhere between 100 and 200 billion dollars I think that a trained chimp would be unlikely to perform worse. Even better ... my salary is less than anyone on the list. I hereby volunteer to take the place of anyone on the list for the lowest salary on the list and a bonus upon successful completion of one year service (meaning I am not fired for being completely useless) of $200,000. Yes, I am serious!
6. The top executives are sacrificing. Here are the details:
I [CEO Liddy] will receive an annual base salary of $1 for 2008 and 2009. My basic compensation will consist entirely of equity grants and I will not receive an annual bonus in those years, although I will be eligible for a special bonus for extraordinary performance payable in 2010. I am also not eligible for severance payments.

Paula Rosput Reynolds, Vice Chairman and Chief Restructuring Officer, who joined AIG in October, will receive no salary or bonus in 2008. In 2009 and beyond, other than her base salary, any other compensation she receives will be tied directly to the progress of the restructuring efforts.

The other five members of AIG’s top-seven-officer Leadership Group will not receive annual bonuses for 2008 or salary increases through 2009. Executive Vice President of Retirement Services Jay Wintrob and Executive Vice President and Chief Financial Officer David Herzog are included in this group. Also, David Herzog did not accept a raise when he became the company’s Chief Financial Officer. In addition, this group has agreed to defer retention payments that were due to them in December, and they also agreed that they would not be eligible for both unpaid retention and severance payments. The Leadership Group, and an additional 10 executive officers, have also agreed to defer their retention payments due to them in December 2008 and also agreed they would not be eligible for both unpaid retention and severance payments.

There will be no salary increases through 2009 for approximately 40 other top executives who are part of this retention pool.

These are the same terms (except for the $1 salary bit) that applies to every current employee of my company and we only lost $5,000,000 last quarter .. not hundreds of billions.

so ... cry me a fucking river that they are sacrificing anything.

The self justification of the financial ruling class in this country is beyond parody. How the fuck could someone sane come up with the load of steaming horseshit and think that anyone was going to take them seriously. Which actually leads me into a theory that I have had for a while about CEOs of major corporations. I think that you have to be a sociopath to do the job. No, seriously I do.

I am not talking about the companies that are worth a few hundred million dollars and employ a couple of thousand people. I mean the giant companies .. the ones with market caps in the tens of billions of dollars. This is the only explanation I can come up with for the constant flow of bullshit that there is only a limited number of people that can do the jobs. Well, there really arent that many sociopaths in the country now are there .... hmmmmmm

Sunday, November 30, 2008

Tanta:The Compleat UberNerd

Calculated Risk: The Compleat UberNerd

This is some of the best writing on mortgage finance that you will ever read. So go read it.


naked capitalism: AIG Plans to Pay Retention Bonuses to Executives
How can you give cash compensation to an executive, yet claim it is not a salary or bonus? You call it a "retention bonus," No, I am not making this up.

Note that AIG chose to make this disclosure the day before Thanksgiving, clearly choosing a time when it would attract the least notice. Not that it really matters. The talk about restricting executive compensation to bailout recipients has been just that, talk.

Maybe I am getting cynical but this really didnt shock me in the slightest.

RIP Tanta

Calculated Risk: Sad News: Tanta Passes Away
This is a very sad day and I know many of you are in shock. Tanta was our teacher. She generously shared her knowledge with all of us. I doubt she knew how many lives she touched; her insights, spirit and passion lives on in her writings – and in all of you.

This blogosphere thing sure is strange. I only knew Tanta from her writings but hearing tonight that she is gone made me cry.