Wicked cool infographic:
>
via Nicholas Rapp
>
Hat tip FlowingData
Source:
Six months after the AIG bailout: Where is the money?
Information Design, March 16th, 2009
http://nicolasrapp.com/?p=347
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
"Overall household indebtedness is up from $7 trillion to almost $10 trillion since 2000. On this sum, we estimate, the American consumer has an annual interest bill of more than $500 billion; a sum, by the way, that vastly exceeds his current income growth." —Kurt Richebacher
"The Greek offer is not sufficient and they have to go away to come up with a revised plan," said a spokesman for the German Finance Ministry. The Greeks must first have a plan that satisfies the Germans which this comment states they clearly don't yet and then the Greek Parliament will vote on it this weekend. This said, whatever package gets voted on in Greece is basically an up or down vote on euro membership so we are entering another uncertain weekend for global markets. A failed vote will likely lead to a hard default which may be what...
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March 21st, 2009 at 8:41 am
It seems like the policy of unfettered M&A didn’t work out like the Reaganuts of the CATO Institute, Federalist Society etc… wanted.
Nor does it seem that the policy of “National Champions” seems to work either judging by the payments to foreign banks.
Break them up. Make them small. And while the CEO’s on top of these smaller banks won’t be able to afford to be Master’s of Private Jet World, that’s a small price to pay.
March 21st, 2009 at 9:24 am
The AIG money that went to Europe could just as well have stayed home…
http://www.bloomberg.com/apps/news?pid=20601068&sid=aI4VU26qj76o&refer=economy
European Industrial Output Plunges by Most on Record
“The dreadful industrial-production figures for January confirm that the euro-zone recession is deepening rapidly,” said Martin van Vliet, senior economist at ING Bank in Amsterdam.
The man in charge of the bailout, Mr. Bernanke, says he sees an end to the recession/depression in 2009. The US and global numbers seem to belie that to me…
Global synchronous deleveraging…quite a way to go…..
March 21st, 2009 at 9:30 am
Where’s mine, dammit?
March 21st, 2009 at 9:37 am
And after 8 years of Bush, this “lost without his teleprompter” thingy seems to be gaining traction…
http://www.boston.com/news/politics/politicalintelligence/2009/03/obama_rolls_a_g.html
Obama rolls a gutter ball
At least he didn’t tell Jay for a fat boy you don’t sweat much…
You know, these last several presidents and their administrations…there was a book years ago called The Peter Principle…it has as a premise that you advanced until you reached a level of incompetence…
American politics seems to have embraced the book…
Perhaps we could all send a little money to the Special Olympics this weekend…
…Later…
March 21st, 2009 at 9:39 am
Power doesn’t give up without a fight.
“the only thing to fear .. is fear itself” is just a slogan to carry on people.
Power (super liquidity) doesn’t need to fight … just shutdown and holdout.
I heard in here @ TBP that this power dislikes inflation because they hold the most to see deflate.
March 21st, 2009 at 9:50 am
I watched that snippet a couple times. Thin skin .. more like thin membrain. With a 129 score he would probably be out in the first SO round. Have fun in life but stick to being President. (don’t be so quick to dance puppet)
Google investigative reporting here: (msm you rolled a gutter ball …. AGAIN)
Special Olympics Bowling Gold Medal score 237 – Special Olympics Virginia
Ruth Anne Leroy won a gold medal in bowling with her three game score of 237. Leroy won a 4th place ribbon for her double game with teammate Rachel Register and a 7th place ribbon in mixed team bowling.
Rachael Register won a fourth place ribbon for her three games individual bowling score of 212. Register also won a 4th place ribbon in doubles and a 7th place ribbon her team bowling.
March 21st, 2009 at 9:52 am
Will someone please enlighten me as to why people are so hung up on this AIG payment issue? And why is the guy (ahem, BR!) who enlightened me and so many to systemic risk sticking on it like it is such a shocker. Guys–AIG was like the lead domino that lead to multiple other trails of dominos. These payments are the definition of systemic risk!!!!
Please think about this for a bit before writing some flaming hate response. First, what did you think AIG was going to do with “bailout” money considering the business they are in? Second, lets just play a fun “what if” game: what if AIG didn’t honor the municipal payments in this chart? Default on bonds? Muni-bonds? Do you think that would have shocked the system? Ok, now look at for what they are paying out money to their “cronies” for–it looks to me like they are honoring previous obligations made for contracts rendered. It looks like these places relied on AIG as an agent of risk reduction.
Hey, lets try a fun thing a shrink might do to separate a persons irrationality from logic… Think of it as the auto industry. What did they do with their billions? Dunno, but they probably had suppliers to pay–maybe a seatbelt mfg, perhaps a light mfg, or a steering wheel mfg. What! Paying manufacturers when you can’t even sell what you’ve got?!! Um, yes, we already used them…they’re in the cars–that aren’t selling.
Now, maybe I was mistaken, but I thought the efforts by the government were to bailout so business could continue, not freeze. Oh, and can we quit with the media chosen word bailout for those other that AIG, FNM, FRE?? The rest had monies forced on them (that’s right, forced. talk to a smaller bank in your area… the govt was like the mob selling protection, “it would be a shame if you need money later and you hadn’t taken this now…”) and it has an interest payment, a due date, penalties…
I know this has been a mess. But the anger seems to made a group of people blind. Like the AIG bonus thing–Senators telling people they should be committing hari-kari. Then as it unravels we find the the screw ups were actually where we left them—in D.C. People this is all coming home to roost in Washington. It is just like cheesy TV shows, the loudest critic tends to be the one whodunit…hello D.C. insiders!
I suggest we start acting like the thinking human beings that used to frequent this blog and not the pitchfork carrying villagers that grunt one syllable solutions, lynch first, and then hold the trial…
March 21st, 2009 at 10:30 am
I agree we are too hungup on the bonuses and bailout money to AIG…so a little more money in bonuses can’t hurt, can it?
http://hosted.ap.org/dynamic/stories/A/AIG_BONUSES?SITE=AP
NewsBreak: Conn. AG says AIG paid $218M in bonuses
….Rounding Error, guys, rounding error….
March 21st, 2009 at 10:35 am
I agree with Jas that BR and many others are needlessly hung up on the idea that the bailout money circulated through the financial system.
Where did people think the money was going to go? Did they think AIG was going to go to Staples and buy hundreds of billions of dollars worth of copy paper and printer ink?
AIG is in the business of trading contracts. Of course the money was going to go to its trading partners. If it was in the business of growing carrots, the money would have gone into new tractors and carrot seed. If it was in the business of flying people from point a to point b, it would have gone into jet fuel and pilot salaries.
March 21st, 2009 at 10:45 am
JasRas I totally agree with you but it’s not going to happen.
People are starting to feel the pain and they want revenge. As people lose many more of their entitlements, they’ll get even angrier. It won’t be pretty.
You can argue logically until you’re blue in the face and the pitchforks will comes out.
This is only a prelude.
March 21st, 2009 at 10:47 am
Note that more than $28 billion went to “others.” Government of China, anyone?
March 21st, 2009 at 11:04 am
Can anyone refer me to any good articles on “what if” the Fed had not done all the monetary gymnastics – including The $700 Billion Bailout – to save AIG and the major banks (i.e., if everyone had been allowed to fail, not just LEH)?
March 21st, 2009 at 11:58 am
I for one, am very glad that Barry continues to post on the bailouts. I get the sense that some of you are getting bored by the concept of Justice. The people getting vast amounts of money handed to them fall into two categories: The ones who understood the risks and didn’t give a shit and those too stupid or wishy-washy to think about what they were doing (“just following orders”). You know, I can’t find even a shred of sympathy in my heart for any of them.
Capitalism can’t work without justice, remember that when you are getting bored by stories of injustice.
March 21st, 2009 at 11:59 am
@ CNBC–no article is really necessary–look at what happened when they let LEH go bye-bye (either to “not encourage moral hazard” or b/c Paulson had a personal axe to grind with Fuld) That is what happens. And with AIG it happens in a much bigger way. Actually, everyone left standing is some order of magnitude larger than LEH. And LEH was much larger in impact than Bear Stearns wouldv’e been. Frontline (PBS) has a GREAT episode available to watch online that I highly recommend.
I know pitchforks will come out, political careers will be made, etc…but remember 2000-2003. The perp walks didn’t start happening until well after the market initiated its recovery. Ebbers, Layman, Skillman, A.Anderson,…all of Spitzer’s work on after hour trading. Justice wasn’t served until later. It isn’t a good idea to focus on the emotional stuff. It clouds the mind and prevents good decisions regarding the investment side. Trust me, it will all be taken care of—politicians are mostly lawyers, which means when they smell blood, they go into frenzy mode.
You can pay attention to the Circus, or you can pay attention to digging us all out of this hole that the collective has placed us in. I choose the latter.
March 21st, 2009 at 12:05 pm
This anger we’re seeing was never about the AIG bailouts or any one thing per se. It’s a cumulative reacton to the reality that is the corruption and fraud being perpetrated by the financial/corporate political elite class in this country. People have been quietly seething for years (but those in that aforementioned bubble didn’t notice because they were busy, you know) and now we’re seeing it finally spill out into the open. AIG was merely the match that lit the tinder box. If it wasn’t AIG, it would have been something else in these bailouts.
March 21st, 2009 at 12:08 pm
Bingo, Mark McHugh. There seem to be those here that strangely like the status quo (or “reality”, as they would call it) probably because it has worked just fine for them over the years. I prefer that our system be cleansed so that we can have true trust & confidence in our system moving forward. Patching up the current system and acting like this was just a minor blip in our history isn’t going to get it done. Sadly, that’s what they’re trying to do.
March 21st, 2009 at 12:09 pm
not to hijack the thread on AIG …
but SpOlym and charities in general … (SO used to get my $ (may still someday) (ps – I have a sister in that state)
off all the charities they get alot of commercial time and phone solicitation assist and mailings
start focusing on real growth mechanisms not just “trading up” and “save the ___” … I love this country .. wanna keep it lovable ….. I was playing for the 1st time last night with “Google Maps Street View” … people in foreign lands check it out .. healthful commerce makes it happen …. and America get real and healthful again ….. and if REAL is unfettered credit than write the rules and dont leave anyone out of the formula
fyi – Google Maps Street View .. the little yellow/green man on the zoom bar .. drag him to an Interstate or State highway almost anywhere in the USA
http://en.wikipedia.org/wiki/Google_Street_View
March 21st, 2009 at 12:10 pm
Ignore the trivia, the bigger picture is becoming clearer and it really does look like Geithner’s Treasury and, eo ipso, the Obama administration have bought the Bernanke/Paulson framework hook, line and maybe even sinker: There are really no bad assets out there, simply misunderstood waifs looking for a market; and there is nothing fundamentally wrong with the markets and the financial industry either, they just need some grease for the wheels and some gas so they can roll to the rescue of the waifs and all the rest of us.
Frankly this is beginning to look like Bush III, the prequel; executed with enough competence this time to create a truly unforgettable and lasting experience in all likelihood.
The response to the first few weeks of the crisis was incompetent but understandable as anyone who was paying attention to Libor and the TED spread would know: The sudden escalation of risk perception and the scope of the derivative markets created a set of uncertainties so great that credit paralysis became global and total, full lockup. But the ongoing public funding of zombie banks, including the use of AIG as a funnel to pour additional streams of public cash into AIG’s bank counter-parties through the back door, is unconscionable and unwarranted.
Dammit! I almost had my conservative friends and family members retrained sufficiently to avoid expostulations at dinner that more God and less regulation/taxes would solve all our problems: Gustatory pleasure and companionship alike really do suffer when the same dessicated neocon dung fueling jingoistic warmongering and a venal FIRE economy is publicly regurgitated at table. But now it is also a distraction when ones primary concern and focus should be how to get out of a burning building. Dammit and double dammit!
President Obama needs to listen to somebody else on the economy or maybe just his own gut; even if this battle is won a victory could be pyrrhic.
March 21st, 2009 at 2:00 pm
CNBC Sucks @ 11:04
For sure, we would be facing annihilation, pestilence and death, were it not for these bailouts. Were it not for the heroic efforts of Paulson, our economy would now be the size of Sri Lanka’s.
March 21st, 2009 at 2:18 pm
So, you guys are telling me that America would have a shitty economy without massive government intervention? You are saying that capitalism cannot work its own problems out?
I am not arguing a point here one way or the other, just trying to figure out what this all means.
PS: Thanks, JasRas, for the heads-up on the Frontline episode, which I found.
March 21st, 2009 at 2:51 pm
So when’s Obama goinig to ask for more bailout money?
Or is he going to do it all through the “back door” of the Fed?
March 21st, 2009 at 2:55 pm
I noticed the collapse in my Long Term Care Insurance provider, GenWorth, and I am wondering about any insurer’s ability to pay claims, life, health, annuities, etc.
Is that the next Sodom and Gomorrah?
March 21st, 2009 at 3:16 pm
@JasRas,
I’m really not trying to pick a fight, but can you honestly say that you think justice was served in the dot-com bust? I think that round of token justice is what gave the green light to this meltdown. Spitzer’s gone (by the way, anybody ever hear about any other busts from that “unrelated FBI investigation”?).
@CNBC, I think capitalism can work it’s own problems out, or at least should be allowed to. Once you start interfering with the Darwinian process that turns millionaires into beggars (and gives idiots free houses because their debt holders collapsed) your objective should be rescuing the system, not those who abused it.
March 21st, 2009 at 3:23 pm
Interesting Rolling Stone magazine of all places seems to have done a pretty good story naming names on the AIG/CDO/CDS square dance.
Most media seems to want people to only see the 165 million dollar AIG bonuses not the whole history of this bullshit and who the players are.
http://www.rollingstone.com/politics/story/26793903/the_big_takeover/8
March 21st, 2009 at 4:33 pm
We got the message, Goldman was a big beneficiary of the AIG bailout. But who is Goldman? Had Goldman invested the assets of some pension fund, and hedged it with AIG swaps? Or was Goldman’s stake in AIG for its own account? I’m not aiming to justify the bailout, but if it wasn’t Goldman’s assets at stake but one of their clients, this adds a new dimension. Add if the bailout was to primarily protect Goldman Sach’s own assets then this puts the Paulson actions in a harsher light.
March 21st, 2009 at 8:21 pm
Blankity Blank Blankfein, Pig Paulson, Big Bug Bernake and Graft Geithner are laugh at you folks.
At least some people are catching on:
The LA Times report that a cultural shift is underway with the notion that the wealthy are not worthy is catching on:
“With financial crisis and scandal as backdrop, Americans are questioning whether plutocrats are either indispensable or deserving.
‘We may soon come around to George Orwell’s view that the only difference between rich and poor is income – ‘The average millionaire,’ as he put it, ‘is only the average dishwasher dressed in a new suit.’
There’s also a social value in suppressing income inequality. In a country with only a slightly less ingrained tradition of civility than the United States, the AIG affair would provoke rioting in the streets.
Robert Shiller, a Yale University economist and coauthor of ‘Animal Spirits,’ a new book about the psychology of economics, comments on the current crisis: ‘there’s anger and a sense of injustice taking hold, and it’s not in the interest of wealthy people — you don’t want people on the poor side of town to be angry with you.’”
Yet, who are the real “animals?” The victims of the collapse or the profiteers?
The US government is preparing for real unrest as incomes and homes disappear. New laws have been passed to curb civil unrest. Michel Chossudovsky writes on Global Reseach on plans to set up Guantanamo-like detention centers on military bases:
“The outgoing administration has laid the groundwork. Various pieces of ‘anti-terrorist’ legislation (including the Patriot Acts) and presidential directives have been put in place since 2001, largely using the pretext of the ‘Global War on Terrorism.;
A bill entitled the National Emergency Centers Establishment Act (HR 645) was introduced in the US Congress in January. It calls for the establishment of six national emergency centers in major regions in the US to be located on existing military installations.
The stated purpose of the ‘national emergency centers’ is to provide ‘temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster.’ In actuality, what we are dealing with are FEMA internment camps. HR 645 states that the camps can be used to ‘meet other appropriate needs, as determined by the Secretary of Homeland Security.’
There has been virtually no press coverage of HR 645.”
In England, some anarchists are calling for class war saying the only way to stay warm in a financial crisis is to “burn a banker.” The British government is taking this rhetoric seriously and reportedly put the Army on alert for an expected “summer of rage.”
Overall expect more crime, protests and unrest. It doesn’t take a weatherman to see which way this wind is blowing.
Hey Bruce, dead hobo, otto and karen! Don’t worry about it. This just means a bull market in some precious metal ETF or maybe corporations that make security systems and don’t forget the funeral homes. Even AIG might benefit with funeral expense insurance. Buy, buy, buy! Be happy, take a cruise, walk on the beach, etc (you know the drill- reality is a bummer; keep it at bay).
March 21st, 2009 at 8:32 pm
AIG Gives Connecticut’s Blumenthal Data on Bonuses (Update3)
Share | Email | Print | A A A
By Karen Freifeld
March 21 (Bloomberg) — American International Group Inc., whose compensation policies before and after its U.S. bailout are being investigated, turned over information on its executive bonuses to Connecticut’s attorney general, who said the insurer paid out $218 million.
Hey what’s the big deal? We’re only talking about a piddling $53 million (218 -165 = 53). That’s nothing! Right? Hi Hank, where’s da loot? No, McCain has nothing to do with this! So he’s hollering that we should leave poor Geithner alone, so what? No bearing on the issue whatsoever. GETOUTAHEAH!
March 21st, 2009 at 8:36 pm
Al Bergette,
Right on! And check out trhe “Dancing on the edge of the volcano” piece in Counterpunch (full of zingers and very entertaining while retaining truth) .
March 21st, 2009 at 8:39 pm
Haigh,
The answer, as far as Goldman is concerned, is Cassano. Goldman suckered AIG through Cassano (Greenberg LOVED Cassano). Read the rolling stones piece. It’s all there. Paulson was just protecting his friends using YOUR money.
March 21st, 2009 at 9:37 pm
Re-read the thread .. Editing my post at 12:09pm .. a typo I didn’t catch before hitting submit
off = of … thats a big F of a change … please give to the deserving charities of your choosing
“of all the charities they get alot of commercial time” … maybe the msm gives that airtime too (be nice huh)
March 21st, 2009 at 9:55 pm
A person that I respect presented the following analysis of the bailouts , and I wanted to know if it is correct. If so, perhaps you would want to address it on your blog. It’s an analysis of how the little guy is getting royally screwed as a result of these bailouts.
This analysis goes like this: Financial institutions made bad loans to subprime borrowers and others. The market put a very low value on these assets, thus causing the banks to book writedowns, and suffer a reduction in capital. The government stepped in and “bailed out” the banks via loans, guarantees, and capital infusion. Meanwhile if the borrowers can’t pay the mortgage, the banks foreclose on them. Therefore the banks are collecting twice. If the government wants to make the bank whole, why doesn’t it first force the bank to first reduce the principal of the loan, and if the banks still need money to survive, either put in capital directly or put them into receivership and force the creditors to suffer a loss?
Possibly even a worse scenario exists when you think through the bail out of AIG. In this case the financial institutions bought insurance against the loss in value of loan portfolios. As a result of the reduction in the market value of these loans, payment on these insurance policies is triggered. The government then steps in and finances these payments. So this is yet another way that the government makes the grantors (or buyors) of these loans whole. Those receiving these payments ultimately will be organizations such as Countrywide (now owned by Bank of America) who were among the worst culprits in the subprime debacle. Meanwhile, if the borrower can’t repay the loans, the lenders will foreclose on the home and in effect the lender will collect twice.
Finally, this abuse can play out a third way. The government is currently constructing a plan to take toxic assets off the banks’ books by financing hedge funds and others at very favorable rates to buy these assets, i.e. loans, at say 25 cents on the dollar. These prices will be so low that even if the property is foreclosed on, the “investors’ will still make a profit. In the aggregate some of these investors will probably make billions of dollars on these loans. Meanwhile, the borrower is still being held responsible for the original value of the loan and faces foreclosure if he can’t repay. As an alternative, why not let the little guy buy out his own loan at the market value, say 30 cents on the dollar, and give him a chance to go on and live a decent life!
The banks, hedge funds, and I-banks are probably clever enough to collect two or three times on the same bad loans!
I’d be very curious to hear your take on this analysis.
March 22nd, 2009 at 12:31 am
There’s a new movie out, it’s called “The Haunting in Connecticut.” It’s about a bunch of AIG execs who are cursed because of the sins of their bosses.
March 22nd, 2009 at 2:48 pm
GOLDMAN SACKS-USA
March 23rd, 2009 at 1:37 am
http://spectator.org/archives/2008/10/16/goldman-sachs-government
As Goldman Sachs alumni play a key role in stewarding the nation’s economy, it’s worth recalling that the late economist John Kenneth Galbraith blamed Goldman Sachs for helping to cause the Great Depression. In his book, The Great Crash, 1929, Galbraith, a key figure in President John F. Kennedy’s administration, devoted an entire chapter he titled “In Goldman, Sachs, We Trust,” to detailing the “large-scale corporate thimblerigging” that Goldman and other Wall Street firms practiced in the 1920s.
Thimbleriggers or not, supremely self-assured Goldman Sachs alumni at the highest levels of the Bush administration are now pulling the levers of power in the nation’s capital, confident that they know the way out of the current market turbulence.
Their power is likely to grow no matter who’s in charge in Washington. Commentator David Brooks may not have been joking when he observed this summer: “over the past few years, people from Goldman Sachs have assumed control over large parts of the federal government. Over the next few, they might just take over the whole darn thing.”
It might seem reasonable to trust ex-Goldman executives because they helped build what is undeniably a spectacularly successful company. Goldman is on Fortune magazine’s 2008 list of the “Global 500” largest corporations (by revenues), which ranks it as #1 in the securities industry, #20 stateside, and #61 internationally.
But are Goldman veterans the nation’s salvation, or are they pushing the same kinds of disastrous interventionist policies that prolonged the agony of the Great Depression? Steve Milloy, portfolio manager for the Free Enterprise Action Fund, argues that Goldman alumni are working from within the Bush administration to clean up the toxic economic mess they helped to create. “It’s government by Goldman Sachs and for Goldman Sachs,” he said.
With their determination to command the financial tides, these overachieving bankers believe that they are uniquely qualified to steer the U.S. economy between the Scylla of dollar devaluation and the Charybdis of negative economic growth.
Seems this isn’t Goldman Sucks first rodeo.