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Posted
Sep 16 2008, 03:15 PM
by
Andrew Horowitz
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Since when do we rely on government to intervene in every case of a failing business? If anyone wonders why we have such a mess on our hands, look no further than our boneheaded government that has obviously forgotten its way. Think of this week's action within the financial markets as a result, not the cause of our problems.
AIG is in a battle for its very existence, Merrill has been absorbed and Lehman is bankrupt. And we're only part way through the week. What's next?
These days, many people are wondering what our government will do to stop the insanity. Yet, in a capitalistic society that relies on a free market system, we should only look to the government to guide and regulate against fraud and the manipulation of the system. Sometimes known as a laissez-faire philosophy, the government has a role, but it
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Posted
Nov 13 2008, 10:05 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
So much for one president at a time.
Bloomberg reports President-Elect Obama is urging lawmakers to rush through a $50 billion bailout for the struggling U.S. automakers. With no formal executive power until January, Obama is asking Democratic friends in the House and Senate to get their Republican counterparts behind a rescue plan. Any plan would also require the support of President Bush, according to Bloomberg.
Also at issue is whether the money would come from TARP -- essentially depleting the first $350 billion installment of bailout funds -- or from fresh legislation.
General Motors' situation is particularly dire, as many analysts believe that the once-largest carmaker in the world won't survive throug
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Posted
May 06 2009, 10:36 AM
by
Minyanville
Rating:
Money Blog: Top Stocks Blog - MSN Money
Do words have meaning?
In March, American International Group (AIG) said it paid approximately $120 million in bonuses to about 6,000 workers. The company now says it paid close to $454 million. That's 278.3% more than it initially disclosed.
But AIG tells Politico, a Web site covering Washington, that it responded accurately to the questions as asked.
A pettifogger’s delight? Or sloppy reporting?
Nick Ashooh, AIG spokesman, says the $454 million total “reflects all types of variable compensation across all our businesses.” The $120 million figure included only bonuses paid to top executives at corporate headquarters and others in its major businesses around the world. He says the higher total includes the previously disclosed $120 million.
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Posted
Oct 07 2008, 11:42 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
First off, I apologize if this post makes you throw up. Got a trash can handy? Here we go.... Remember that $85 billion government bailout of insurance company AIG? Surely executives there must be under the gun, working all hours to dig the company out of trouble. Our taxpayer dollars demand that, right? Nope. Less than a week after getting the $85 billion commitment, AIG execs went on a week-long retreat at the luxurious St. Regis Resort in Monarch Beach, Calif. The trip cost AIG almost half a million dollars, including $200,000 for rooms, $150,000 for meals and $23,000 in spa charges. Sometimes, after you've worked hard at running a company into the ground, only a pedicure will do.
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Posted
Mar 16 2009, 09:54 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Time and again, American International Group (AIG) has shown itself to be the dumbest company on Earth. Remember the week-long luxury retreat executives went on after getting the first batch of bailout money? Oh, and that time it pulled in the worst quarterly loss in U.S. corporate history?
Here's one more for the list of dumb moves: Guaranteeing pay levels for two years. That's what AIG did in early 2008, when it promised a minimum level of pay, including bonuses, for people in its Financial Products division. AIG was so worried about losing people that it dangled big money to keep them through 2009 -- the average salary there is now more than $270,000. Turns out the people it was so desperate to keep ended up running AIG into the ground with bad bets on credit-default swaps, which are a kind of insurance for securities tied to home mortgages. Now, AIG has imploded, and has received $170 billion in federal aid. And all those people who were promised big bonuses? They still want the money, and if they don't get it, they'll sue.
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Posted
Mar 02 2009, 09:23 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
American International Group (AIG) made it into record books Monday as it reported losing $61.7 billion in the last three months of 2008. That's the largest quarterly loss in the history of U.S. companies.
How did AIG, the world's biggest insurer, blow through that much money? Mostly, it came from big writedowns as the company paid the price for getting cozy with toxic assets and risky transactions like credit-default swaps. And yet the help keeps coming. AIG is getting another $30 billion bailout -- its fourth from the government -- because its failure would have a damaging impact across the world's financial system.
The taxpayers now own 80% of AIG, the most crippled of all the nation's financial institutions, writes the New York Times' Joe Nocera in a fascinating column on the company. To say AIG was shady doesn't come close. The company was reckless, exploiting loopholes and abusing the system for its own gain -- and, Nocera writes, it's being kept alive precisely because it behaved so badly.
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Posted
Nov 25 2008, 08:22 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Even Tiger Woods is getting laid off in this economy. General Motors has pulled its endorsement deal with Woods, who has pitched Buicks and other GM products for the last nine years, according to Bloomberg.
GM had hired Woods through 2009. It ended the deal because it needed "budget efficiencies during a difficult economy." No kidding. Another factor? Woods, arguably the most popular athlete in the world, couldn't sell Buicks to younger people. The median age of Buick retail buyers is 68 -- the same as in 1997, Bloomberg reports. Less than half of 1% of Buicks sold last year went to buyers younger than 35. "Overall, the message never fully connected," an auto analyst told Bloomberg.
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Posted
Aug 24 2009, 04:02 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
 Steve Jobs worked at Apple (AAPL) for $1 a year in 2000, just before the launch of the iPod, which completely changed the company’s fortunes and made him astonishingly wealthy. Lee Iaccoca worked for $1 in 1978 when he took charge of crippled Chrysler.
The dollar-a-year tradition has fallen on hard times. The most recent apostle of the practice was Edward Liddy who took the chief executive’s job at American International Group (AIG) when it was deeply troubled. He had been the head of Allstate (ALL), so he probably did not need to make several million dollars. Liddy took the job as a public service, an action which seems to be both anachronistic and idealistic. Liddy worked hard to restructure the insurance company, but was derided mercilessly by Congress because AIG executives received large pay packages on his watch. The irony of this issue was that Liddy had nothing to do with the compensation agreements. Liddy was replaced by Robert Benmosche, the former chief executive of MetLife (MET). Benmosche presumably is wealthy enough to work for nothing, but insisted on being paid $7 million. The taxpayers who own 85% of AIG are appropriately enraged that AIG let Liddy leave.
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Posted
Oct 10 2008, 11:37 AM
by
Kim Peterson
Rating:
Money Blog: Top Stocks Blog - MSN Money
Slowest job in the world right now? Being AIG's event planner. The insurance company is canceling its functions after receiving harsh criticism for spending half a million dollars on a spa resort getaway for employees recently. The insurance company got an $85 billion bailout from the Treasury, which apparently wasn't enough because it's getting an additional $38 billion to keep it solvent. In the middle of all this, employees went on a week-long retreat at a California resort and ran up at least a $440,000 tab on drinks, rooms, pedicures and who knows what else. The public reaction was intensely negative, no surprise. And the pressure is enough that AIG is pulling out of an event next week at the Ritz-Carlton in Northern California's Half Moon Bay. The Ritz-Carlton? Oh yeah, that's how AIG rolls.
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Posted
Oct 14 2009, 03:53 AM
by
Douglas McIntyre
Rating:
Money Blog: Top Stocks Blog - MSN Money
American International Group (AIG) is a meritocracy. One of the firm’s best kitchen workers got a $7,700 retention bonus as part of the firm’s plan to keep key employees. According to the FT, the payment was made in March.
Kenneth Feinberg, the government’s pay czar, is asking that AIG retention bonuses be cut by $198 million for 2010 and that the company “claw back” $45 million from last year.
The trouble with the plan is that some of the retention programs were probably part of written agreements with employees, and the federal government may not want to be seen as violating contracts. It would raise the issue of whether employment agreements at firms which have still not repaid government loans are any good at all.
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