The Balls on the Banksters

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No good deed goes unpunished:

Fresh from paying back a $182 billion bailout, the American International Group Inc. has been running a nationwide advertising campaign with the tagline “Thank you America.”

Behind the scenes, the restored insurance company is weighing whether to tell the government agencies that rescued it during the financial crisis: thanks, but you cheated our shareholders.

The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”

They should change the theme of their new advertising campaign to “Screw You, America!”

113 replies
  1. 1
    Belafon (formerly anonevent) says:

    Does it really need to be pointed out to AIG that the shareholders are suing because they wanted AIG to fail?

  2. 2
    Michael G says:

    Project Mayhem cannot start soon enough.

  3. 3
    Omnes Omnibus says:

    The shareholders’ stake was pretty much worth nothing at the time of the bailout. It sounds to me like the shareholders received more than generous compensation. Assholes.

  4. 4
    Roger Moore says:

    I’m guessing they will not ask for a jury trial for fear of having the jury decide on death for the plaintiffs for having brought such a stinker in the first place.

  5. 5
    Soonergrunt says:

    The government should let them sue. The government was acting as creditor here, not in a governing capacity of regulators and so forth. They should let them sue, win a judgement on those grounds, and then seize the assets of the other party.
    Which is something they should have done as creditor anyway.

  6. 6
    Soonergrunt says:

    @Roger Moore: The government should demand a jury trial, since they are being sued for more than $20.

  7. 7
    Pooh says:

    You almost have to admire the pure chutzpah on display here.

  8. 8

    Obama should have nationalized AIG and the other financial institutions, at least then the socialist label would have made some sense.

  9. 9
    burnspbesq says:

    The lawsuit is going to happen whether AIG chooses to join or not.

    Which hasn’t been decided yet.

    Jumping the gun a bit with your poutrage, y’all. Slow news day?

  10. 10
    Feudalism Now! says:

    We should have nationalized the bastards and liquidated the golden parachutes to cover some stimulus.

  11. 11
    J. Michael Neal says:

    Actually, AIG is not initiating the lawsuit. Their former chairman and CEO is doing that. It puts the current board in a bad spot. If they join the lawsuit, they look ridiculous for all of the reasons being thrown around. If they don’t, and Greenberg wins, they are the obvious target of lawsuits that they could easily lose over a breach of fiduciary duty.

    So, if Greenberg has much of any case at all, they pretty much have to join the suit. He’s the villain in the piece, not anyone currently running AIG.

  12. 12
    ThatLeftTurnInABQ says:

    @Michael G:

    Project Mayhem cannot start soon enough.

    Is that the hot new reality TV show on Bravo?

  13. 13
    Suffern ACE says:

    @Roger Moore: Great. “Jury to AIG: Drop Dead.” Then we’d probably end up bailing the company out this week.

    It is also quite possible that AIG’s business model was based on never paying out valid claims and the government mucked everything up. I wonder what standing they would have then. “We put in place strict claims payment risk controls to offset our poor underwriting risk models. How dare the government make us honor our policy.” The shareholders might have been making money all along by such practices and figured that even during the meltdown, they would have made out extra well.

  14. 14
    coredump says:

    Given the precarious status of AIG and others as the full extent of the callousness of these said companies came to light – the shareholders should be making worshiping America as a religion. They should have Jane and Joe Smith as deities to whom they would offer self sacrifice once every month or more often.

    Here’s an analogy – what they are doing is akin to a person who has been pulled out from a raging fire saying to his rescuer – “you wasted my time”. God – I wish we could go back and let them “not have their time wasted”

    -C-

  15. 15
    Violet says:

    @Soonergrunt: Absolutely. Let them sue. Let the American people see who they really are.

  16. 16
    Stooleo says:

    Isn’t this kinda like killing your parents and then asking the court to go easy on you cause your an orphan.

  17. 17
    Culture of Truth says:

    Please continue, sirs.

  18. 18
    Machine-Gun Preacher (formerly Ben Franklin) says:

    mmmmm.

    And, just why is it, they still have their balls?

    We should have had them removed, plated with Platinum, and gerry-mandered the debt crisis with their imaginary value.

  19. 19
    Belafon (formerly anonevent) says:

    @burnspbesq: I know that. It’s about the fact that AIG is thinking about using its resources on the trial, resources that only exist because it was kept alive by the government.

  20. 20
    burnspbesq says:

    It’s also a bit disingenuous to refer to AIG as “paying back” the $182 billion. In exchange for bailing out AIG, Treasury got a warrant convertible into approximately 90 percent of the stock of AIG, which it exercised. Treasury sold its AIG shares in the market, over a period of a couple of years, at a gain of somewhere north of $20 billion. AFAIK, little or none of that money came directly from AIG.

  21. 21
    Culture of Truth says:

    @Stooleo: It’s like getting rescued by a firefighter and suing because the trip down the ladder wasn’t comfy enough

  22. 22
    Culture of Truth says:

    snark aside, I did hear this morning that they are almost certainly not going to join in the suit.

  23. 23
    Culture of Truth says:

    ah, coredump got there first.

  24. 24
    ThatLeftTurnInABQ says:

    @Stooleo:

    IIRC during the 1936 election campaign FDR attacked the rich who were complaining bitterly about his interventions during the spring 1933 banking panic using the analogy of a drowning man who, having been thrown a life preserver and fished out of the water, then proceeded to complain that his expensive tophat had been damaged. Seems about right for this situation.

  25. 25
    TenguPhule says:

    @J. Michael Neal:

    So have the bastard picked up by the CIA and disappeared. Problem soloved.

  26. 26
    dmsilev says:

    My understanding of Greenberg’s suit is that he is saying that the government offered too onerous of a deal in the bailout (charging too high an interest rate on loans, stuff like that). Given that the board voted to accept the deal, shouldn’t he be suing AIG instead? I mean, they didn’t have to accept the deal. Granted, the alternative was pretty dire for the company, but so what?

  27. 27
    MattF says:

    @J. Michael Neal: Yeah, I recall news coverage of AIG back when they went under included subtle but repeated suggestions that one wouldn’t want to have an encounter with Mr. Greenberg in a dark alley.

  28. 28
    Soonergrunt says:

    @burnspbesq: So he’s essentially suing a former creditor who became shareholder in exchange for bailing out the company for far more than it was actually worth and then for behaving the way shareholders behave?

  29. 29
    Judge Crater says:

    A bunch of that “bailout” money went to AIG’s “creditors”, like Goldman Sachs. Why aren’t the AIG shareholders suing Goldman? Or Tim Geithner? He engineered the whole swindle as head of the New York Fed.

    But the big joke is that all these parties see themselves as “capitalists” and makers not takers. When they knock over the trough again, and they will, give them a choice: criminal trial or bankruptcy, or both.

  30. 30
    Gex says:

    Ummm… without that money, wouldn’t AIG have crashed and burned and these assholes would have been left with virtual paper not even good for burning?

  31. 31
    Forum Transmitted Disease says:

    I want to be on the jury.

    Death penalty for the plaintiffs.

  32. 32
    burnspbesq says:

    OK, wait a sec.

    The plaintiff in the lawsuit is a company controlled by Greenberg, the former CEO of AIG who set the company on its disastrous course. The suit claims that the terms of the warrant transferred value from shareholders to the Federal government, in a way that constitutes a taking of property without fair compensation, in violation of the Fifth Amendment.

    Wow.

    That, ladies and gentlemen, is chutzpah.

  33. 33
    BGinCHI says:

    If there was ever a time for the black helicopters, this is it.

    Please use my tax dollars to crush this.

  34. 34
    BGinCHI says:

    So, if I’m bleeding to death and the ambulance rushes me to the hospital I can sue them for charging me more than I’d like?

  35. 35
    burnspbesq says:

    @Judge Crater:

    Why aren’t the AIG shareholders suing Goldman?

    Because Goldman was entitled to that money under the terms of the credit default swaps that it entered into with AIG. The CDS’s provided that upon the occurrence of certain defined events, AIG had to post additional collateral as security for its obligations. The defined events happened, so AIG had to pay.

  36. 36

    @burnspbesq: Shouldn’t Greenberg in jail instead of instigating frivolous lawsuits?

  37. 37
    Forum Transmitted Disease says:

    So have the bastard picked up by the CIA and disappeared. Problem soloved.

    @TenguPhule: Enemies of America, right? Don’t see any problem with your fine idea. I hear they’ve got a place in Somalia that particularly sucks. That sounds good to me.

  38. 38
    negative 1 says:

    Please let them do this. Please. Any fan of actual banking industry recognition is begging for them to do this.

  39. 39
    ruemara says:

    Read that this morning. I hope there’s the death penalty for frivolous lawsuits by arrogant fucking bastards.

  40. 40
    Kurzleg says:

    Doesn’t this just get thrown out of court since AIG stock would have been worthless had the govt not stepped in and bailed it out?

  41. 41
    Roger Moore says:

    @Machine-Gun Preacher (formerly Ben Franklin):

    And, just why is it, they still have their balls?

    The Eighth Amendment. SATSQ.

  42. 42
    burnspbesq says:

    @Soonergrunt:

    So he’s essentially suing a former creditor who became shareholder in exchange for bailing out the company for far more than it was actually worth and then for behaving the way shareholders behave?

    Except for the “far more than it was actually worth” part, that’s essentially correct.

    Another way of putting it would be to say that he’s suing the government for actually using the leverage it had in the negotiations over the terms of the bailout.

    Call the waaaahhhmbulance.

  43. 43

    Stocks are supposed to be more riskier than bonds. Since in case of a default or bankruptcy, they take a bath, and the bond holders get paid first. How does Greenberg have any basis for the lawsuit?

  44. 44
    Mnemosyne says:

    The classic chutzpah joke is the guy who saves a little boy from drowning, only to have the boy’s mother turn to the rescuer and say, “He had a hat!”

    (Edited because I cannot put sentences together coherently. Jaysus.)

  45. 45
    Culture of Truth says:

    He did sue the NY Fed. It was dismissed.

  46. 46
    Roger Moore says:

    @BGinCHI:

    If there was ever a time for the black helicopters domestic drone strikes, this is it.

    FTFY.

  47. 47
    Machine-Gun Preacher (formerly Ben Franklin) says:

    @Roger Moore:

    Yet another reason to abolish corporate personhood…

  48. 48
    MomSense says:

    Ha! Who hates sub-prime loans now??

  49. 49
    burnspbesq says:

    @schrodinger’s cat:

    Shouldn’t Greenberg in jail instead of instigating frivolous lawsuits?

    Last I checked, greed and stupidity aren’t crimes. And I’m inclined to assume that if Mr. Bharara thought he could make a case against Greenberg for something that actually is a crime, he would do so.

  50. 50
    Machine-Gun Preacher (formerly Ben Franklin) says:

    @Roger Moore:

    I note that the bile is rising

  51. 51
    Culture of Truth says:

    Wall Street Journal MarketWatch: Charge AIG With Treason

    One could argue that by making so many enormous and risky bets in derivatives and credit default swaps that AIG put the nation’s financial system at risk — not an outrageous claim at all — and gave comfort and aid to our enemies including terrorists and foreign foes.

  52. 52
    catclub says:

    as an analogy to religion, Kevin Cling tells a story:
    A kid is given a job to feed some cats while its owners are on vacation. he forgets to feed them for a week or so, and then remembers. The cats love him and worship him because he saved them from starving. The responsible owners? meh.

    The second lesson is from Twain. If you want gratitude, get a dog.

  53. 53

    @burnspbesq: If constructing the worthless CDSs and CDOs is not a crime than it should be. What AIG did was more than just being greedy or stupid. If a car manufacturer makes a car with flaws and sells them as being perfectly safe aren’t they held liable? Isn’t that what AIG did? They did not conduct robust testing of the derivative instruments they were selling.

  54. 54
  55. 55
    burnspbesq says:

    @Culture of Truth:

    That’s pretty far outside what we normally think of as giving aid and comfort to the enemy. Still, it is interesting to see the WSJ implicitly arguing in favor of DOJ pushing the envelope and an activist judge buying a novel legal theory.

  56. 56

    This sort of strong, character-driven leadership is exactly why the bankers should continue to run things from behind the scenes.

    Risk? Losses? That’s for the peasants. Made Men need not concern themselves with such things.

  57. 57
    Mike G says:

    …running a nationwide advertising campaign with the tagline “Thank you America.”

    After AIG sue the government they launch the follow-up ad campaign, “Fuck you America.”

  58. 58
    Culture of Truth says:

    …told a judge handling the matter that Starr was seeking 16 million pages in documents from the government.

    “How many?” the startled judge, Thomas C. Wheeler, asked, according to a transcript.

  59. 59
    Judge Crater says:

    @burnspbesq: Yes, but AIG basically went bankrupt. It was the Federal government’s decision (Geithner, Paulsen et al) to pay Goldman 100 cents on the dollar of claims. Absent the government, Goldman would have gotten considerably less.

  60. 60
    Culture of Truth says:

    Judge Paul A. Engelmayer wrote that while Starr’s complaint “paints a portrait of government treachery worthy of an Oliver Stone movie,” the company “voluntarily accepted the hard terms offered by the one and only rescuer that stood between it and imminent bankruptcy.”

  61. 61

    @burnspbesq: If constructing the worthless CDSs and CDOs is not a crime than it should be. What AIG did was more than just being greedy or stupid. If a car manufacturer makes a car with flaws and sells them as being perfectly safe aren’t they held liable? Isn’t that exactly what AIG did? They did not conduct robust testing of the derivative instruments they were underwriting. They did not perform due diligence of the products they were selling.

    ETA: Posting my comment again with corrections, since WP ate the first one.

  62. 62
    scav says:

    “just” compensation? Looks like the wishing price mania lives on. Hug those tulip tranches boys. Bread and deep fry them and, in a truly just world, yould have something to sell with the soft drinks.

  63. 63
    burnspbesq says:

    @schrodinger’s cat:

    If constructing the worthless CDSs and CDOs is not a crime than it should be what AIG did was more than just being greedy or stupid. If a car manufacturer makes a car with flaws and sells them as being perfectly safe aren’t they held liable? Isn’t that what AIG did, they did conduct robust testing of the derivative instruments they were selling, except in the most optimal of economic climates.

    A lot to unpack there, and you’re conflating some things that ought not to be conflated.

    (1) Creating a worthless security is not a crime. Selling a worthless security is not a crime. The crime of securities fraud consists of making a material misstatement (or omission) in connection with the purchase or sale of a security. The lie is the crime, not the sale.

    (2) The car analogy doesn’t work because products are subject to a wholly separate set of legal doctrines. It’s been too long since I looked at the economic-theory justification for strict products liability for me to recite it in detail from memory, but the gist of it is that making manufacturers of potentially dangerous products liable for the damage those products cause without regard to fault is more likely to result in an economically optimal level of investment in product safety. Implicit in that is a value judgment that consumers are incapable of figuring out for themselves which products are more safe than others. In contrast, the fundamental premise of securities law is that if we make issuers or sellers of securities disclose all relevant information, investors are smart enough to figure out what to buy and what to avoid.

  64. 64
    burnspbesq says:

    @Judge Crater:

    Goldman was a secured creditor. They would have been at the front of the line in an AIG bankruptcy.

  65. 65
    Cacti says:

    Where have you gone Robespierre?

  66. 66

    if we make issuers or sellers of securities disclose all relevant information, investors are smart enough to figure out what to buy and what to avoid.

    OK I am not a lawyer, I am looking at this from a financial engineering perspective. The CDSs and the CDOs did not deserve their AAA ratings, which they got because AIG was underwriting them. Shouldn’t we regulate the derivatives that can bring the entire global financial system down, which they did in 2008-09. They are far more dangerous than the cars. In my non-lawyerly opinion it seems that the securities law hasn’t kept up with the innovations in finance.

    ETA: The securities were AAA or investment grade iff (if and only if) the housing market kept going up.

  67. 67
    burnspbesq says:

    @schrodinger’s cat:

    Shouldn’t we regulate the derivatives that can bring the entire global financial system down, which they did in 2008-09

    .

    I agree, but that’s not something Preet Bharara can do all by himself. That takes Congressional action, and for a variety of reasons Dodd-Frank fell well short of making the changes to the regulatory framework that you and I both think are appropriate.

  68. 68
    scav says:

    And at some point, their brass balls with prove functionally equivalent to cement overshoes. How do we undermine the melting ice they’re standing on?

  69. 69
    Face says:

    @BGinCHI: Try demanding a plumber charge his 8-5PM M–F stop-the-drip rate for your 2:30AM Christmas Day massive water main break flooding your basement.

  70. 70
    Poopyman says:

    @Soonergrunt: Actually, according to @burnspbesq: , it’s a company controlled by Greenberg that’s initiating the suit. What standing does it have in all of this?

    And yeah, sign me up for this jury duty.

  71. 71
    Jamey says:

    Can the president authorize a drone attack on lower Manhattan?

  72. 72
    Culture of Truth says:

    @Poopyman: Starr was a big shareholder

  73. 73
    Yutsano says:

    @Poopyman: I say let them file THEN get busted for wasting the court’s time. I’m with you in that I have a hard time seeing what standing Greenberg has to do this, not to mention the huevos to even bring this up. Buffy must have been shamed at her Sweet Sixteen because Daddy couldn’t buy her a third pink yacht this year and it’s just not FAIR!!

  74. 74
    NCSteve says:

    Owners of a company forced to suffer some consequences from corporate misfeasance enabled by the board they elected? Taxpayer financed bailout money used to honor the company’s contractual obligations rather than stuffing the cash down the pants of shareholders? Doing both of these things, which are supposed to be the things that make capitalism work, rather than stuffing the bailout money money down the shareholders pants and letting the global economy implode? Oh, the injustice.

  75. 75
    Suffern ACE says:

    @Culture of Truth: My guess is that they held special CV Starr Preferred Shares that would have gone poof during the bailout. It is the vehicle he used to control the company while he was there.

    I’m still not certain what the suit would be. AIG would have gotten a better deal in bankruptcy because it would have been so broke it could have settled for pennies on the dollar with its creditors and wouldn’t have had to sell “valuable assets?” If AIG were that broke, wouldn’t it have actually had to liquidate those assets?

    ETA: Maybe they’ll argue that they wouldn’t have had to sell valuable assets because the markets were so fucked up in 2009 that no one would have been able to go to the markets to find investors to buy those assets? In which case, they aren’t really all that valuable since no one can actually buy or wants to buy them.

  76. 76
    catclub says:

    @Poopyman: “What standing does it have in all of this?”

    Plenty of standing. Greenberg was a big stockholder in 2008,
    but no longer Chairman of the Board. Ideal position for sniping about board decisions.

  77. 77
    catclub says:

    @schrodinger’s cat: “In my non-lawyerly opinion it seems that the securities law hasn’t kept up with the innovations in finance.”

    understatement award candidate

  78. 78
    WaterGirl says:

    I always try to read the comments in a thread before commenting, but I will break my own rule to just say that I never get tired of seeing that sign.

    For me, every time is like the first time. I see that sign and it just makes me happy.

  79. 79
    Scotius says:

    Maurice Greenberg is showing the same good judgement he displayed while running AIG. At the moment, people hate him in the abstract, but don’t know him by name. Wait until the video clip of him complaining he was down to his last $100 million starts getting played repeatedly.

  80. 80
    Full Metal Wingnut says:

    @Roger Moore: in a civil suit either party can demand a jury.

  81. 81
    Maude says:

    @WaterGirl:
    I just love the sign. It was good to see it.

    @schrodinger’s cat:
    Part of the problem with the CDOs and CDSs goes back to the 2000 Commodities Modernization Act that Bill Clinton signed. One provision allowed CDSs to be made without capital to back them That is one reason AIG went down. They got overwhelmed when the demands came in.

  82. 82
    Roger Moore says:

    @Maude:

    One provision allowed CDSs to be made without capital to back them

    Obviously, excessive regulation was the real reason for the financial crisis. If banks hadn’t been forced to meet such onerous government requirements, they never would have gotten in trouble.

  83. 83
    rikyrah says:

    those mofos really need to go to jail.

  84. 84

    @Maude: The financial crisis of 2008-09 seems to be the fruition of Clinton era Republican-lite policies. We haven’t yet seen the fall out of the Bush era strategies yet.

  85. 85

    @Roger Moore: Nothing has changed, Dodd-Frank has no teeth, we are in for a rough ride ahead.

  86. 86
    RaflW says:

    Total, ass-flat bankruptcy would have “deprived shareholders of tens of billions of dollars” too.

    Ungrateful shit-wads.

  87. 87
    The Other Chuck says:

    @Mike G:

    After AIG sue the government they launch the follow-up ad campaign, “Fuck you America.”

    AIG is not suing. The former CEO who ran them into the ground in the first place is. It’s going to be really funny when AIG submits amicus briefs on the government’s side. Equally hilarious would be AIG taking out full-page ads saying “Thank you, America, and oh by the way the scumbag CEO who’s suing the government doesn’t work for us anymore.”

    I’d say talk about burning your bridges, but plutocrats always have a ride on the gravy train of other company boards. Always.

  88. 88
    RareSanity says:

    Part of the problem with the CDOs and CDSs goes back to the 2000 Commodities Modernization Act that Bill Clinton signed. One provision allowed CDSs to be made without capital to back them That is one reason AIG went down. They got overwhelmed when the demands came in.

    @Maude:

    This is where it seems like some modicum of regulation could be applied to these instruments fairly easily…and even get through Congress.

    Just say that any contract between one party, and one or more other parties, specifically for the purpose of the first party selling a promise to make the second party whole if an agreed upon event happens (or doesn’t happen)…that contract considered to be an “insurance policy” and the seller classified as an “insurer”, subject to all the same rules and regulations of applicable to insurers and policies.

    Simple.

  89. 89
    BrianX says:

    @burnspbesq:

    That explains something I’d wondered for a long time — how exactly did the banks pay back the bailout money and the government still had nothing to show for it? TARP was necessary, but had no accountability.

  90. 90
    J R in WV says:

    @WaterGirl:

    I agree with this whole-heartedly!


    JUMP,
    MUTHAF’ERS!

    If more of them had jumped the world wold be a better place.

  91. 91
    J R in WV says:

    @Scotius:

    You need to provide a link to that video!!!

  92. 92
    Roger Moore says:

    @BrianX:

    That explains something I’d wondered for a long time — how exactly did the banks pay back the bailout money and the government still had nothing to show for it?

    Actually, the government has quite a bit to show for it. Far from being a boondoggle $700 billion giveaway, TARP has mostly been paid back with interest. I think enough of the things we bailed out were unable to pay back that it wound up as a net loss even after the interest on the ones that did, but the overall cost to taxpayers has been pretty trivial compared to the overall size of the government. Considering that it prevented a complete financial meltdown, the small amount it actually costs us seems like a price worth paying.

  93. 93
    J R in WV says:

    @RareSanity:

    Except that there is NO Federal regulation of the insurance industry. Just 50 toothless state insurance commissioners who can’t even slap a big insurance company on the wrist.

    So calling CDO issuers “insurers” wouldn’t help a bit. Sorry, good idea in the abstract, but under the circumstances…

  94. 94
    Short Bus Bully says:

    If corporations are people than apparently AIG actually stands for “UNGRATEFUL ASSHOLE”

    (I’ll make the letters work later…)

  95. 95
    catclub says:

    @Roger Moore: 1. Fannie and Freddie have not been accounted for. Those losses will probably dwarf any gains due to TARP.

    2. Opportunity cost. TARP may have made $1.20 per dollar invested while Warren Buffett made $5.0 per dollar invested in bank preferred stock at the time.
    Notice the difference?

    3. Opening the Fed window to Investment banks that suddenly got renamed as commercial banks. No Congressional appropriation==Zero cost? ha ha ha

  96. 96
    Mnemosyne says:

    @BrianX:

    The government didn’t make a profit, if that’s what you mean. AIG and the other bailed-out banks fully paid back what they had been loaned.

  97. 97
    LanceThruster says:

    @dmsilev:

    Damn effin’ straight! They could have gone to McBain Capital and gotten sweet, sweet terms from one-time financial messiah Mitt Rmoney.

  98. 98
    Scotius says:

    @J R in WV: I saw it in a documentary about Elliot Spitzer’s fall. Apparently Mr. Greenberg’s fingerprints were all over the feds getting involved.

  99. 99
    LanceThruster says:

    @Scotius:

    AIG cost me money…Spitzer’s indiscretion did not.

    I hated AIG before the bailout (they cheated me on an auto insurance payment). My friend Bernie the Attorney said they were known throughout the industry as being insufferable at pretty much every level.

    Hate ’em, hate ’em, hate ’em.

    Where’s my trebuchet so’s I can fling garbage in their direction?

    http://www.trebuchet.com/

  100. 100
  101. 101
    chopper says:

    man, these guys really put the ‘douche’ in ‘fiduciary’.

  102. 102
    LanceThruster says:

    @LanceThruster:

    What an amazing site, complete with an example of “Don’t try this at home.”

  103. 103
    LanceThruster says:

    @Short Bus Bully:

    AIG = (A)ssholes (I)ncapable of (G)ratitude.

  104. 104
    Scotius says:

    @LanceThruster: The Elliot Spitzer documentary is called “Client 9” and Greenberg features prominently in it. He comes across as a nast, vindictive little prick.

  105. 105
    LanceThruster says:

    @LanceThruster:

    And I think they’re represented by Dewey, Cheatham, and Howe.

  106. 106
    LanceThruster says:

    @Scotius:

    Seems to DoJ considers it a “victimless crime” if the perp is too big to prosecute.

    [sigh]

  107. 107
  108. 108
  109. 109
    LanceThruster says:

    @schrodinger’s cat:

    Oh, they’re guilty as sin…just incapable of feeling/acknowledging any (clearly your point).

    ;-)

  110. 110
    dmbeaster says:

    @J. Michael Neal:

    If they don’t, and Greenberg wins, they are the obvious target of lawsuits that they could easily lose over a breach of fiduciary duty.

    Not really. Its not a breach of duty for the board to make a reasonable decision not to take a flyer on a lawsuit.

    These types of lawsuits are also common after the FDIC shuts down a bank. The typical claim is that the regulatory agency acted prematurely or otherwise took value unfairly from the shareholders of the failed institution, which allegedly was not as sick as claimed. They fail on a regular basis. Don’t know the details on the Greenberg claim, but hard to see how it has any chance.

    It is nice to hear that the government was able to recover the funds advanced to prevent AIG going bust. Since systemic failure of the entire financial industry pretty much went through AIG at the time, given its key role in so many of the mortgage backed securities, it made sense to keep its corpse propped up to lessen the meltdown. Kinda like those Russian firefighters dropping boron onto Chernobyl as the nuclear fires burned, only this time the firefighters weren’t killed in the process.

  111. 111
    dmbeaster says:

    @RareSanity:

    that contract considered to be an “insurance policy” and the seller classified as an “insurer”, subject to all the same rules and regulations of applicable to insurers and policies.

    Too true. Amazingly, this was not the first time insurance companies got burned issuing financial guarantees that function as insurance for investments. Back in the 80s, there were failures arising from insurance companies issuing construction loan guarantees that also did not have to be regulated even though they functioned as insurance. What it really does is knock out the normal restraint by those typically at risk in such deals, so that ever riskier deals get done with the insurer holding the bag. The risk being insured then skyrockets because of the existence of the insurance, which somehow seems to get overlooked in these things. And as with AIG, it was some small but lucrative part of the insurance company writing this crazy paper.

  112. 112
    Another Halocene Human says:

    @schrodinger’s cat: inorite?

  113. 113
    Another Halocene Human says:

    @scav: I <3 this comment.

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