Traden4Alpha
Senior Member
Posts: 14118
Joined: Sep 2002
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Sat Mar 28, 09 10:00 PM
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Quote
Originally posted by: gardener3
Quote
Originally posted by: scholar
Dear AIG, I quit!
A nice article in NYT. A quote:
"As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house. "
"On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes...."
I feel really sorry for this guy. He worked 12 long monthes for only $1M+. Contracts get renogiated all the time and promises are broken and employees get screwed when a company goes bankrupt. Why does this guy who made a 1M deserve special treatment?
AIG is for all purposes bankrupt and exists at the pleasure of US taxpayers. It should not be the congress but the trutees who should be putting on the pressure and actively pursuing Cassano and his coworkers for professional misconduct and gross negligence.
The real issue is that many of these AIG bonus-makers were the ones hired to clean-up the mess made by others. They did NOT create this mess and probably don't deserve to be lumped in with the people that created this mess. But that's really beside the larger point. Two larger problems loom from this type of media and government circus.
First, given all that's occurred, who among us would be willing to take a job at AIG or Citi or BoA or RBS or <insert name of next financial services whipping boy> knowing that the government and public might suddenly decide to revoke your contract and blame you for all the crap that happened before you were hired. I'd wager that only the desperate and the stupid would take such jobs. Thus, the subsequent quality of management and quants in these firms will suffer greatly. Maybe that's as it should be -- the shareholders and bondholders should and will take a huge haircut when the populism-fueled human resources death spiral reaches it's natural conclusion.
Second, given all that's occurred, what executive of a semi-damaged firm would voluntarily reveal to the government the true state of affairs? Won't firms do everything in their power to hide their diseased assets, overbearing risks, and rotted counterparties? Systemic opacity will increase in a witch-hunt environment that penalizes transparency. The result will be a very messy de-leveragings, incompetent clean-ups, and many many more "unexpected" consequences to public acts.
In the end, this crisis will prove that capitalism does a bad job of managing the economy and that government does an even worse job.
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"It often happens that a player carries out a deep and complicated calculation, but fails to spot something elementary right at the first move." -- grandmaster Alexander Kotov --inscribed on gift chess sets given by Amaranth hedge fund.
Edited: Sat Mar 28, 09 at 10:04 PM by Traden4Alpha
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