Friday, March 27, 2009
Friday, March 20, 2009
It seems a little obvious now that
the 20 + employees at the AIG Financial Products division overseeing the remaining books of “credit default swaps”(CDS) (presently estimated value now reduced to a mere 1.6 of the original 2.5 trillion) have been playing the “hand of their life” and sticking to their guns, entitlements, for their now infamous “retention bonuses.” AIG Edward M. Lilly, the CEO that stepped in last year as a public service for a $ 1.00 a year, stated before the senate yesterday that the matrix, therefore “the manufactured knot of financial genius, behind these CDS is so complicated and intertwined that should these “special” few not get their way, their entitled “retainment bonus,” that the banks of the world would melt to their cinder blocks. There can be no question now how good these “salesman” were, given the solemnity Liddy expressed in alluding, deferring, to these “gods of finance.” It may well be the last sales pitch these Wall Street wizards are ever likely to pitch, at least on US soil.
Liddy gingerly stepped around not having to bring this "belief" to the floor as he was certain to be asked the “names” of these holdouts in this specialized AIG division. But Barney Frank wasn’t buying it. Without hesitation, Frank demanded the names of these “masters of the universe” which precipitated Liddy to say in so many words that such disclosure would force the hand further and these “righteous” few would lay their cards down and walk. Liddy stated this “holdout” in the most sober and solemn of assurances, and with great confidence that such vacuum would defeat all the intent behind the stimulus billions now propping up this hobbling financial giant. On several occasions Liddy reassured the house that should these chosen few not get their way in keeping their entitled “retention bonuses,” they’d walk, which now seems inevitable if congress’ newly proposed legislation to tax, claw back, the monies is passed in the next few days. Unfortunately, a good number of these holdouts are on British soil. Congresswoman Carolyn Maloney of New York spoke on CSPAN this morning she was confident both houses would pass the 90 percent tax bill on TARP fund bonus recipients without incident.
This drama on the stage of “Capitalism” could never have been imagined. That said, this “real time” world news epic playing out before all appears to have the potential of reaching ink levels akin to all the published works of our American and French Revolutions combined, if not more. Liddy even went further to shore up “insulation” for the holdouts and not disclosing identities by reading from documented copies of purported “threats” he’s received towards various AIG players. Senator Frank wasn’t buying it though, and suggested that should any of us “be held powerless to exercise our government business, nothing would get done.” Perhaps the term “Financial Terrorism” crept on the mind of many as these events blossomed in Senate hearings Wednesday. And, President Obama’s characterization later Wednesday of AIG being like a “time bomb strapped terrorist” demanding concessions couldn’t be more on point. Frank additionally added that he was willing to solicit the DOJ and FBI to determine the threat level behind the communications, the Liddy threats. It seems imminent the names of these traders, not “traitors,” will surface, and their names burned in the annals of finance, world business and history for centuries to judge them, should they do what they seem to be threatening to do. If their game is that toxic and capable.
New York’s Attorney General, Andrew Cuomo has long been on the trail with disclosing the names of these “FinTers” since investigating these individuals connected to AIG surfaced while taking issue with similar types at Merrill Lynch. Subpoenas have already been served on AIG for these insiders Mr. Liddy mentioned to the senate, despite his consternation to openly admit, if not hesitant and reluctant combined, they’re complying with the disclosures. Several individuals at Merrill walked with comparative numbers in “bonuses” while the Fed was shoring up the Bank of America merger, buy-out, and guarantees were being drafted to close that bail out.
And while so many would like to “claw back”10 years of de-regulations and impose criminal liability in the context of these “doings,” nothing could be more aggravating to many a US and local attorney generals’ whose hands are significantly tied without substantive law on the books.
“We’ll see your 169 million, raise you “every financial institution on the planet” and call you.
As I write this, our congress, and thus their crying constituents - just played their biggest hand in this poker game they’ll ever chance to against these “holdouts” with HR 1586 and the 90 percent tax legislation imposed on TARP bonus recipients. And they call.
Now – were soon to see whether our calling these “holdouts” bluff was smart, albeit haste, or whether those three cards they’ve been holding really were three aces, king high. And if they are, and these CDS book overseers at AIG walk, and the matrix underlying their complicated books beyond the scope even Einstein couldn’t imagine to untwine in reasonable time to save the world’s financial institutions, the heat from the blame game to follow is likely to bring some global warming few could ever have imagined.
March 19, 2009
Posted by JMPendley at 3/20/2009 06:12:00 AM