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AIG Suing U.S.

Discussion in 'Political Discussion' started by Leave No Doubt, Mar 20, 2009.

  1. Leave No Doubt

    Leave No Doubt PatsFans.com Supporter PatsFans.com Supporter

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    LOL you just can't make this stuff up.

    Democracy Now! | Headlines for March 20, 2009

    http://www.nytimes.com/2009/03/20/business/20aig.html?_r=1&ref=todayspaper

  2. Mabeyitstrue

    Mabeyitstrue Banned

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    Should of let them fail, what a joke of a company..........Three things I hate in the world Insurance,Taxes,Lawyers lol in order.
  3. Bigdogx

    Bigdogx Rookie

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    What do people expect to happen when our government effectively says sorry what contract and rips it in two in front of them? I know Obama thinks he can wave his hand and effectively do what ever he wants while i'm sure within a couple years that will be the case, but for now last time i checked this is not Russia, China or Venezuela yet!

    The sad part is by the time this is all said and done it will have cost both AIG and our government tax payer more money then this entire lot of bonuses!
  4. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    The Circus Is Just Beginning

    It is a good thing, when Teleprompter Barry, Windbag Biden and Auntie Pelosi get through f---ing the country up the democrats won't see the power they have now or the White House for another fifty years, we also had better pray that Allah doesn't "Backpack Nuke Us" while these democrats are all going insane with their new found power.

    DOESN'T OUR PRESIDENT HAVE A BEAUTIFUL SMILE
  5. Leave No Doubt

    Leave No Doubt PatsFans.com Supporter PatsFans.com Supporter

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    Exactly, and they're in effect saying Hey, wanna play? We can play too,just watch. As much as it pains me to say this I hope AIG wins this one for a couple of reasons: first off, the concept of the business contract is something that should be protected, and the thoughts of what kind of precedent would be set when a govt is allowed to mess with that contractual bond is a Bad Omen imho.

    This whole dog and pony show has to end sometime and I agree, it'll end by costing US just that much more. But truth be told I'd consider this to be money well-spent if it means getting the govt/Congress to get off of people's contracts,ESPECIALLY when they'd gone ahead and allowed those contracts through in the first place.

    Brilliant strategical move by AIG tho- while Congress is busy planning an unconstitutional taxation move,AIG slips a lawsuit in, right under their noses ;)

    It'll be interesting to see how this all shakes out. Meanwhile Citi's spending 10mil to redo their offices. No peep so far from Congress on that one. :cool:
  6. reflexblue

    reflexblue PatsFans.com Supporter PatsFans.com Supporter

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    #91 Jersey

    What a joke, didn't anyone tell them you can't sue city hall, in the end they'll lose. AIG can't make new laws and enforce them city hall can.

    In other new the former boss of AIG Hank Greenberg is/has sued the company he ran for 38 years for fraud.

    Former AIG head denies he started exec bonuses

    Greenberg has sued AIG, saying the company that he led for 38 years misled investors about its exposure to subprime mortgages and ruined his fortune by lying about its financial health NO, tell me it ain't so, a major corporation lying it just can't be. :rolleyes:
    Last edited: Mar 20, 2009
  7. tanked_as_usual

    tanked_as_usual Banned

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    so.......AIG is suing the government.......
    - the goverment owns 80% of AIG
    - so the government is suing itself? or is AIG suing itself? or is the government suing AIG?

    its kinda like a dog humping a throw pillow.........
  8. reflexblue

    reflexblue PatsFans.com Supporter PatsFans.com Supporter

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    #91 Jersey

    Or like a snake swallowing itself.
    Last edited: Mar 20, 2009
  9. godef

    godef Rookie

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  10. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Isn't that EXACTLY what happens in a bankruptcy?
  11. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey


    Once again - - what happens to creditors in a bankruptcy?
  12. tanked_as_usual

    tanked_as_usual Banned

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    but this isn't bankruptcy
  13. tanked_as_usual

    tanked_as_usual Banned

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    they get to pick the bones

    but this isn't bankruptcy

    I just want to know why the government in its infinite wisdom of bailing out the auto-makers is allowing for thousands upon thousands union workers to collect full salaries while sitting idle........for over a year now........

    call me idealistic, but aren't people supposed to work if they are getting paid?
  14. shmessy

    shmessy Maude Staff Member PatsFans.com Supporter

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    #75 Jersey

    Sure it is......or pretty damn close. Look, Tanked, if the Government didn't prop up AIG in the first place, the bonused executives wouldn't have gotten ANYTHING, let alone bonuses. Crying about "tearing up contracts" goes out the window the minute a corporation goes on Government life support. That corporation ceases to exist as the entity it used to be. Let's stop pretending.

    Regarding the auto workers, I'm not up on that situation, so I'll be interested to read what the folks here who know more about than I do write.
    Last edited: Mar 20, 2009
  15. Bigdogx

    Bigdogx Rookie

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    And congress has no body to blame but themselves since they are the ones that allowed this to happen. And if it is only a matter of poor performance and being funded by tax payer money which allows people to be stripped of their pay, when can we expect all members of congress to give back every dime they have made the last year plus?
  16. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    Aw crap, I posted my reply in the other AIG thread by mistake (you know, the old spend-too-long-and-you-have-to-sign-in-and-find-it routine.)

    Anyhoo... it's in the 90% AIG bonus tax passes the house thread if anybody cares.
  17. Harry Boy

    Harry Boy Look Up, It's Amazing PatsFans.com Supporter

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    It didn't take the people very long to Take To The Streets over the Viet Nam War, do we have any of those kind of people around today.

    VOTE EVERYBODY THAT'S IN OUT (BOTH PARTYS)
  18. JMarr

    JMarr Rookie

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    Some would argue that the sacredness of the contract should not always be absolute--sometimes it is good policy for contract enforceability to be overriden in the interests of the public good, or (more typically) in the interests of economic "efficiency."

    Just like the Great Depression, when New Deal swept away many sacred and preconceived tenets of capitalism, we are again in uncharted waters and IMO the planet's economic survival is more important than any bad precedent that ripping up some (very ill-advised) contracts may set.
  19. PatsFanInVa

    PatsFanInVa PatsFans.com Supporter PatsFans.com Supporter

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    This whole "sacredness of a contract" angle is particularly strange when one considers the fast-and-loose approach we have taken toward, oh, how about Congress' sole power to declare war? Just a f'rinstance.

    Don't get me wrong, if contracts cannot be trusted, yes of course we have yet another problem.

    Contracts are abrograted under various circumstances every day, however. Note that we're talking about a specific tax, rather than an abrogation of a contract, in the House bill.

    But I have no problem saying, okay, new rule: When the government owns 79.9% of you in the first place, and your function is not as a going concern but one the government is trying to split up and liquidate, and you're basically living on gigantic welfare checks.... then yes, circumstances may have changed to the extent that your contract might be nullified.

    I'm not a contracts attorney, but I would assume that even outside of bankruptcy, the particulars of such law are not as cut and dried as we are pretending.

    Let us say I write Shmessy a contract for writing posts on Patsfans.com, and I promise to pay him 1 million dollars for writing those posts until such time as we stop posting about AIG. Now let's say Shmessy wraps up all our AIG business, and is owed $1 million. If I'm broke, I can't make him whole.

    But let's say we determine that Patsfans can't be allowed to fail, because the whole Pats spectator economy would collapse. Enter the government. Aha, says Shmessy, the moneygrubbing bastard. We were right! The government DID come to the rescue! That means I get whatever Patsfans promised me.

    So far so good. After all, the government bought Patsfans -- well, 79.9% of it -- knowing good and well they had contracts to fulfill. That was part of the point, after all: The whole pats spectator economy was interwoven through posting deals with Patsfans.com.

    But here's where the case of Shmessy's bonus becomes interesting.

    Knowing that Patsfans.com was in this situation, I decided to promise all sorts of ignorant things I could not pay for, if certain things happened. So in the Patsfans world, not only did I give various mods million dollar bonus agreements, I also set up a gambling section where you could bet on all sorts of things. So among the fans of the Patriots, everybody knew they'd feel like crap if Brady got injured, and everybody wanted a billion bucks if that happened. I happily took the bet. If, as had happened the previous 10 years, Brady did not miss the season, they all paid me 10 grand each. If of course Brady went down, I had to pay all these fans a billion bucks a head to make them feel better.

    Okie dokie. Most likely it would never happen, and besides, I make those bets only counting the upside. If the catastrophic case DOES happen.... I know in advance I'll never have to pay. I can either go bankrupt, taking down all fans of the Patriots with me, or more likely I can just make that bet with "house money," that is, the U.S. government's.

    Given the certainty of the Paulson Put, we can establish that even if there was no formal arrangement, by virtue of the inevitability of the bailout, AIG was implicitly commandeering government resources for its backing. I'm certain that's a criminal offense, but that's not what I'm doing here. Rather, given that AIG was specifically insuring against catastrophic risk via credit default swaps, and given that AIG created a system whereby they would not have the resources to pay their clients in the event of catastrophic failure specifically, they were relying on a silent partner who did not show up anywhere on the books, vis., the taxpayers of the United States of America.

    Now if the argument is that by writing such instruments, AIG meant simply to defraud their customers a la Bernie Madoff, it's a straightforward fraud case. I think if you examined every record and every e-mail and every phone call in their financial services department from, say, 2006 onward, you would be amply able to establish they were knowingly writing contracts they could not perform on. You would probably also be able to establish moral hazard, or the assumption that the government would pick up the tab.

    Now then: bringing fraud charges against these fu(kheads might seem satisfying, but I don't think it's in anybody's interests to do so.... yet. I am certainly not ruling out such action from the point of view of pure and simple wisdom.

    But applying the second "legal" theory, that of a silent partner in the U.S. government, it would appear that I have taken an action -- promising Shmessy a bonus -- without having the funds to pay that bonus, once the woefully insufficient capitalization for my counterparty risk is considered. I am, in other words, committing the funds of the United States Government without any U.S. Government authorization, when I write that contract with Shmessy.

    The moment I write that contract, once I have knowledge that I will rely on government funds to make good on it, I am in violation of the antideficiency act. More importantly, I am writing a contract for an illegal act, the transfer of government funds without government authorization.

    Courts of law are funny places, gentlemen, and lawyers are funny people. They look at all sorts of sides to things, and their briefs and arguments are seldom so simple as a one-size-fits all quote, even from the most important legal source we have, the Constitution.

    Someone here said AIG was saying "you want to play? Let's play."

    Well, don't get too convinced that they're the only ones with familiarity with the justice system.

    PFnV
    Last edited: Mar 22, 2009
  20. tanked_as_usual

    tanked_as_usual Banned

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    no it isn't......pretty damned close doesn't cut it.......its that exact 'pretty close' attitude that incementally puts us in the $hitstorm that our economy is in.........when people stop doing things by the book and start making exceptions like forcing banks to increase risk........this is what happens

    the 90% tax is the only response the govt once it became so clear how bad the govt screwed up

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