AIG Part II

by Larry Levin

A great deal of today’s news revolved around AIG and its insistence that it must pay bonuses of $165 million to its financial group. It is paying a total of $450 million in bonuses, but $165 million goes to AIG’s best and brightest financial alchemy wizards. This entire bonus-BS has angered the President.

Joining a wave of public anger, President Obama blistered AIG for “recklessness and greed” today and said he asked Tax-Cheatin’ Timmy at the Treasury Dept to try to block it from happening. “How do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama asked in today’s press conference. “This isn’t just a matter of dollars and cents. It’s about our fundamental values.”

Bravo Mr. President, I hope you mean it. I hope you’re not going to use a political maneuver and claim to have stopped the bonuses, when they’re not. If so, that would be business as usual in Washington, not change and this is a real chance to stand up and say “Bonuses? No you can’t!”

But what’s this? Later in the day White House spokesman Robert Gibbs said the administration would modify the terms of a pending $30 billion bailout installment for AIG to at least recoup the $165 million the bonuses represent. That wouldn’t rescind the bonuses; just require AIG to account for them differently! The White House may do something else too. Maybe the Treasury will just cut AIG another check for “only” $29,835,000,000.00 instead of the full schmegeggie and claim that they stopped the bonuses. Pathetic.

With this upcoming $30 billion handout, AIG will be up to almost $1/4-TRILLION in handouts and the White House, Treasury, and Congress can’t just say NO?!?

AIG made these so-called iron clad agreements with their financial alchemists when it was a viable firm. It no longer is. The US government owns 80% of this nightmare and these arrangements were not made with us, therefore the agreements are null and void in my opinion.

The President is making a mistake if he thinks the political shenanigans mentioned above will go unnoticed. I am hoping he does the right thing and stops the bonuses cold, sending a signal to all others on the bailout-dole.

I am pulling for you President Obama.

Another part of today’s AIG scuttlebutt was due to who received AIG’s bailout money. That is, who almost directly received taxpayer funds? Until now, AIG refused to divulge who its counterparties are. A short list is below, including foreign banks.

? Goldman Sachs = $12.9 billion

? France’s Societe Generale = $11.9 billion

? Germany’s Deutsche Bank = $11.8 billion

? Britain’s Barclays PLC = $8.5 billion

? Merrill Lynch = $6.8 billion

Did you know your tax dollars went directly to foreigners?


Previous Day's Trading Room Results:

Trade Date: 3/16/09

E-Mini S&P Trades*
(before fees and commissions):

1) FT buy @ 11:00am at 763.75 = b/e (1-lot)

2) Algorithm positions (4)…combined SofT and Algo total…-0.50


Electronic (YM) Mini-Dow:


1) None



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