Sunday, March 15, 2009

DId I mention I worked at AIG....

Ok, it was back in the early 90's and I worked in the insurance side which was unrelated to the financial derivatives business but still it's my connection to the corporate version of Bernie Madoff.

Wow, consider the Sunday headlines on AIG.....

Fury as AIG pays $450 million to staff who nearly broke firm

AIG lists firms that got money from taxpayers

While the bonuses are clearly going to get the attention of most people, these bonuses are contractual obligations and unless you want AIG to go bankrupt (and clearly the treasury isn't going to let that happen), then AIG is obligated to make good on the bonuses.

However, I think the fact that bailout money flowed through AIG to other financial firms (US and foreign) is clearly the bigger story here.

"Financial companies that received multibillion-dollar payments owed by A.I.G. include Goldman Sachs, Merrill Lynch and Wachovia.

Big foreign banks also received large sums from the rescue, including Société Générale of France and Deutsche Bank of Germany, which each received nearly $12 billion; Barclays of Britain ($8.5 billion); and UBS of Switzerland ($5 billion)."

I think maybe the Treasury might want to start filling those empty offices before AIG causes anymore embarrassment.


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