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Subject:AIG
Time:12:33 pm
Screw the bonuses... why do these schmoes still have jobs?
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adb_jaeger
Link:(Link)
Time:2009-03-18 07:42 pm (UTC)
Because Goldman Sachs is AIG's biggest counter-party, and Goldman runs the Treasury Department.
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mangosteen
Link:(Link)
Time:2009-03-18 09:20 pm (UTC)
...and Rule #1 of Wall Street is "Goldman wins."
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byronium
Link:(Link)
Time:2009-03-18 07:59 pm (UTC)
The sad part is that some of the bonuses for "retention" are, ion fact, to be paid to individuals that are no longer with the company.
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bellaballanda
Link:(Link)
Time:2009-03-18 08:13 pm (UTC)
Beat me to it.... can't fire people who no longer work for you....
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scottro
Link:(Link)
Time:2009-03-18 08:00 pm (UTC)
That is a fine point.

Of course, I'm also asking why the bailouts, but I guess that's a matter of strategy discussion.

77
(Reply) (Thread)


stevecohen
Link:(Link)
Time:2009-03-18 08:52 pm (UTC)
'Cause they are the highly volatile people and AIG is down like 6 racks of bespoke-charcoal-grey-with-red-power-tie ($100M chips). These guys are their only chance to get even!

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wordweaverlynn
Link:(Link)
Time:2009-03-18 09:02 pm (UTC)
Wouldn't it make better economic sense to demand large sums of money from them?
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markgritter
Link:(Link)
Time:2009-03-19 06:04 am (UTC)
AIG's story seems to be that they needed to retain the people who actually understood the derivatives they'd sold, so that they could successfully roll back their positions. Also, they claimed there was some risk that their counterparties would walk away and/or demand their money back if the people they'd been dealing with were no longer present.

In other words, the "I wrote such bad code you can never afford to get rid of me and fix it" defense.
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tiurin
Link:(Link)
Time:2009-03-19 03:46 pm (UTC)
Part of the problem is that most of the people who put together the CDS crap have long since left the company, whereas a lot of the people who still have jobs weren't even involved in that(i.e. secretaries, IT staff, etc...and even a few subgroups of financial people in AIG).

The other part of the problem is that getting rid of everyone in AIG now means that there would still be a giant portfolio that hasn't been unwound yet, and if it's just let go all at once it'll cause an even bigger explosion.
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[icon] AIG - Patti
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