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Thank you, America

Discussion in 'Sports and News' started by JakeandElwood, Jan 8, 2013.

  1. JakeandElwood

    JakeandElwood Well-Known Member

    Now give us $25 billion of taxpayer money (and not a loan this time).

  2. dixiehack

    dixiehack Well-Known Member

    That's why you have to put these motherfuckers in prison. Meanwhile, this tool should be chatting with IRS auditors every day from here to his wake.
  3. trifectarich

    trifectarich Well-Known Member

    I second the motion. We're (supposedly) coming to the end of a nationwide mortgage scam and how many individuals have gone to jail over blatant lying, cheating, manipulation and deception? None. Only in America.
  4. The Big Ragu

    The Big Ragu Moderator Staff Member

    They don't belong in prison. They didn't do anything illegal.

    But they don't belong in business. AIG should have gone through a bankruptcy.

    This is the natural end result of government injecting itself in what should have been a private economic matter. It not only left us all worse off in ways most people don't seem to be able to understand, it makes this kind of upside down world the norm.

    The only thing I don't understand about the lawsuit. ... The government stepped in and messed with the equity ownership of a group of shareholders in something. The basis for a lawsuit would have to be: Our equity stake would be worth more IF the government hadn't fucked with the process. If that was the case, it would be a perfectly legit lawsuit.

    But AIG was so insolvent (unlike most of the banks that got forced to take TARP money) that if it had gone through its bankruptcy, it wouldn't exist today, and those equity holders -- last in line -- would have walked away with nothing.

    So not only is it a nonsensical lawsuit from the standpoint of equity stakeholders NOT being worse off today because of the Federal government (they benefited unfairly -- our government showed them favoritism that others don't get), from a PR standpoint it demonstrates a tin ear (what you typically get when lawyers drive the action). Fuck em.
  5. GeorgeFHayek

    GeorgeFHayek Member

    This thing is so damn arcane that I have a helluva hard time getting my head around it. But, if I am close to understanding correctly, the shareholders, with the benefit of hindsight, are saying the company wasn't insolvent, it just had a liquidity problem, which is what a bankruptcy would have sorted out. The essence of their complaint is that having bankruptcy removed as an option meant that they, rather than AIG's derivatives counterparties, bore the full cost of the back-door bailout. I think that's the complaint. But I may be way the hell off, too.
  6. da man

    da man Well-Known Member

    How about making this simple. Can the government please just stop trying to bail out companies and/or industries in the first place?
  7. Azrael

    Azrael Active Member

  8. The Big Ragu

    The Big Ragu Moderator Staff Member

    No hindsight needed to know that they had a liquidity problem. It's credit rating was downgraded because of all the crappy swaps it had entered that had lost value. That required the company to post collateral that it didn't have. And no one was willing to lend to it. The company was insolvent, because it was about to collapse. The notion that there would have been any kind of bankruptcy that left equity holders anything is ludicrous. It was an insane amount of money.

    As an aside. ... I don't know how they even make that claim. They had a board of directors. Technically, that board of directors accepted the terms of a rescue package from the Federal Reserve -- which indeed was for warrants on nearly all the equity in a new AIG, leaving behind just a little for the current equity holders. They should be happy they have anything, though. That would have been a bankruptcy in which there was little left for secured debt holders, let alone equity holders.
  9. GeorgeFHayek

    GeorgeFHayek Member

    From everything I've read, the very idea that AIG might enter bankruptcy terrified Geithner, Paulson, et al. Given that, so the story goes, they basically shut down that avenue and, per the equity holders, shut them (the equity holders) out of what was rightfully theirs. Not my story, mind you.
  10. The Big Ragu

    The Big Ragu Moderator Staff Member

    You are correct. Paulson stron-garmed them into the bailout.

    BUT. ... 1) Their board of directors accepted the deal with the Federal Reserve. And under the circumstances, there was only so much arm-twisting the administration could do. They couldn't threaten them with much because the company was going to be insolvent (vapor) in a day or two.

    2) I am not sure what you mean by "shut them (the equity holders) out of what was rightfully theirs." If there is no Federal Reserve rescue, there was bankruptcy, and in that bankruptcy, Hank Greenberg and every other equity holder would have gotten zilch. They were hundreds of billions of dollars in the hole. Presumably their swaps had some value -- we never got to find out because of our government interfering. But in a marketplace, they would have gotten pennies on the dollar, leaving them seriously in the hole. Its creditors weren't going to get paid off. ... let alone equity holders. It is ludicrous.

    3) The basis of this lawsuit is that the Fed didn't offer them a fair enough deal. Compared to what, though? They retained 20 percent equity in a new AIG -- as opposed to the zero they would have gotten if it had played out naturally in bankruptcy court. Add to that the fact that THEIR ELECTED BOARD OF DIRECTORS ACCEPTED THE DEAL ON THEIR BEHALF. I'm no lawyer, and I know in the convoluted world of litigation green = purple, but this defies all sense.
  11. Azrael

    Azrael Active Member

    The lawsuit is also perfectly timed to arrive at the same moment as AIG's new 'Thank You' commercials.

  12. GeorgeFHayek

    GeorgeFHayek Member

    It's the green=purple world of litigation (nice touch, BTW!). That's the equity holders' story (again, not mine).
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