Chapter 2, in which AIG goes on an English hunting trip:
http://www.sfgate.com/cgi-bin/article.c ... 01&sc=1000
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meanwhile, AIG still knows how to spend money
122 posts
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"Lawmakers investigating AIG's meltdown said they were enraged that executives of AIG's main U.S. life insurance subsidiary spent a lavish amount on the retreat, complete with spa treatments, banquets and golf outings." BURN THE WITCHES. Would it be too much to ask of your favorite newspaper to report the facts? The Golf trip wasn't for executives it was for independent insurance agents, which happen to be the big rainmakers for the Insurance company, and none of their activities have anything to do with AIG's demise. Lynch-mob mentality at its worst.
As I've indicated before, I agree with malmo's take on the US sales conference. I'm not quite as sure the UK hunting trip is in the same category.
I suppose if the AIG's big commercial customers have come to expect this kind of event, the company could have reasonably considered it essential for the retention of those customers. And their competitors probably sponsor similar events, so if it's the sort of thing that makes a difference to a given customer, it really is something AIG has to do if it's going to stay alive. On the other hand, it's unfortunate when the business mores allow goodies like that to affect purchasing decisions. It's even more unfortunate when the tax laws encourage that kind of environment by allowing the cost of events like that to be deducted, which I suspect is the case in some places.
I believe it does: "This was an annual event for customers of the AIG property casualty insurance companies in the U.K. and Europe, and planned months before the Federal Reserve Bank of New York's loan to AIG" Again, the Insurance company has nothing to do with AIG holding company's woes. If AIG fails, the insurance company will be spun off and they'll still have their hunting and golf trips next year, and the year after, and the year ..... as they should.
And while Rome burned, Nero fiddled, because, ya know, he already had it scheduled, and he didn't want to disappoint his audience, and I mean, after all, he was not a firefighter, so what could HE to to stop the fires, and . . .
Let them eat cake!
Stop knocking AIG. The missus and I went on a VERY nice junket to Hawaii at their expense about 20 years ago !
The United States Navy sent me on several nice little junkets to Hawaii (and various other exotic locales), but that doesn't mean they can do no wrong!!!!
There's a question I don't really know the answer to. The investments that got AIG in trouble--were they made at the holding company level or at the insurance company level? If the latter, the insurance companies have to take some of the responsibility. That does not necessarily mean, however, that it was wrong for them to try to keep the operations (non-investment) side of the business bringing in revenue treating their producers and customers as they always have. Let's not forget that the reason they got so big (and got all that money to invest) to begin with was that they were successful in their core insurance business.
It doesn't matter who you work for, you just don't get it anyway. The insurance company isn't spending the holding companies money, they are spending their own -- all earned from a thriving and profitable business.
Again, I'm not sure which company's money was being invested unwisely, but if it was the life insurance company's money, it must be noted that even if the insurance company's core business (the marketing and underwriting of insurance) was thriving, the company itself was not. As I understand it, an important part of any insurance company's bottom line, and particularly that of a life insurance company, is based on investment returns.
But even so, I don't disagree with your premise. If the investment part of your insurance business is broken, fix it. Don't break the part that isn't broken (marketing, sales, and customer relations) just because you've screwed up on the investment side. If you do that, you risk sinking a ship that may otherwise be able to stay afloat.
Former AIG head bitching about the take it or take it deal the government offered.
http://www.msnbc.msn.com/id/27204989/ I've said it before - make no mistake, the government is going to make a killing on these "bailouts".
Lehman didnt have the diversification AIG does. Almost zero chance of getting a return.
Most probably the risky investments were not at the insurance company level. All reports indicate the insurance part is doing fine. And insurance companies are tightly regulated ... it's not likely they would have been allowed to invest any big money into those crazy mortgage securities.
It appears that they're getting a bit of a comeuppance:
http://www.nytimes.com/2008/10/23/business/23aig.html
Where is your sense of humanity? Some of these folks are going to have to give up their 4th vacation home, or their 7th Mercedes, or their 3rd yacht? Have you no feelings?
go Cuomo for being somebody who gets it
<<...“Once a company accepts tax dollars, there are different rules,” Mr. Cuomo said. “These are taxpayers who did not voluntarily make an investment in these companies. In many ways it was a forced investment.”...>>
No he doesn't. I wish he had as much zeal for cracking down waste and fraud at the government trough ( forced "investments I mean to say) as he does for grandstanding over a non-issue. The State of New York will be hurting bad over Wall Streets woes. The good news is, they already magically found way to cut unnecessary spending. With each passing month, they'll find more ways.
Unfortunately, it was an activist government that created those crazy CMO (Crazy Mortgage Obligations). Who would imagined that if you lent money to people who can't pay their bills, they wouldn't pay their bills?
but, but, but, they told me, "Greed is good."
Unfortunately, it is not the greedy and their facilitators who are suffering. Congress got their payoff in pandering for votes. The initial lending executives took theirs off the top as they bundled and passed down the bad mortagages and then escaped with golden parachutes when the house of (bad) paper collapsed...
Malmo, you can sprout the Wall Street company line all you want; meanwhile, us little guys are getting terminal hardons as the AIG people get smacked around.
Another take on "corporate recognition" boondoggles:
http://www.sfgate.com/cgi-bin/article.c ... 006&sc=583
$165M in bonuses for AIG execs? Sure, why not?!
http://www.nytimes.com/2009/03/16/busin ... ml?_r=1&hp
Fuckers . . .
Hey if you can scam the govt into giving you billions you deserve a bonus. 
I really couldn't care less. The Fed makes Libor plus 850(currently around 10%), and if AIG cant pay the loans back by 2010, or they go into default, then their divisions get broken up and sold off, making a tidy profit for the government.
Not so fast, AIG. Mr. Obama is going to try to stop the bonus payments.
http://www.nytimes.com/2009/03/17/us/po ... obama.html
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