http://tinyurl.com/d6d3cq

William Black admits at the above that the Prompt Corrective Action (PCA) does not apply to holding companies, but on Bill Moyer he indicates it does.

The major bailouts are going to holding companies, Citigroup, Bank of America, etc that have both commercial banks (FDIC) and investment banks (SEC & CFTC – voluntary)

GAO reports that there was no authority to take over the investment banks, but the Federal Reserve can provide money if the bank is a threat to the economy.

FINANCIAL REGULATION: A Framework for Crafting and Assessing Proposals to Modernize the Outdated U.S. Financial Regulatory System, GAO-09-216,
January 2009

On March 26, 2008, Geithner proposed regulations to increase authority

“Under current law, no regulator has the authority to essentially take over a troubled bank holding company—conglomerates with a wide range of financial operations—the way the government routinely does with smaller, commercial banks.”

Some Republicans voiced opposition.

Whether or not they get these bonuses, the top talent at AIG-FP will leave. There will be no more big pay days — that is the bottom line. More importantly, who would work at such a reviled company unless they really had to? Saying you’re now a trader at AIG-FP is similar to saying you work at Madoff Securities of Enron. Many already have left and others are just waiting for this last bit of renumeration. Most don’t need another job or can afford to wait until the market picks up. The others, who are not so wealthy or in demand, will stay regardless of what happens and take any salary given, bonus or no bonus.

So, whether they get this bonus or not, the result will be the same: the so called “stars” will leave and AIG will be left with those who have to stay to take care of cleaning up their portfolios.

So, there is no strategic reason to pay these latest bonuses . It is just more money down the drain.

Oddly enough, my observation is that second-careers are more likely among younger members of gov’t than older ones; and much more likely than those in positions of influence. In my own agency, it is people my age (30’s) who are most likely to have worked in another field; go up the ladder to higher positions and go up to older employees, and a majority have never been outside of government or government-related positions.

The law school/politics/gov’t thing may be a tired stereotype, but I see plenty of it in my own agency, and I see plenty of it in the Obama appointees (and in Obama himself.) There seems to be a growing sympathy for a European-style technocracy; an elite class of government servants unencumbered with connections to the private sector. I think that’s a serious mistake, and Europe does not seem to be faring any better in this crisis even with its supposedly superior public servants. Government needs more people with private-sector hands-on experience; and while I see some of that coming in at the lower levels, there is still precious little at the higher levels.

AIG and their Wall Street cohorts told the American public, “Just to prove we are smart and you are stupid, we are going to enrich ourselves, live like gods, rip you off and there is nothing you little people can do about it”.

Our elected dear leaders said, “Oh yeah! Well, we will show you! We will just pay for all of your losses with the little people’s money, so put that in your pipe and smoke it AIG.”

I’ll let you decide who won this little contest.
– Avg John

Americans spend this much on entertainment every year, and it’s this such great entertainment? I say you’re getting your money’s worth.

Amazing stuff and I posted using your comments elsewhere. It is amazing we can fire air controllers under contract. We can negate healthcare coverage under contract in federal court in bankruptcy. We can kill union contracts. God forbid we take away bonuses for W$ and AIG because it is under contract. If there was ever a reason to place AIG into conservorship, you have expressed it. AIG needs to be dismantled and management fired.

Do you have speaking engagments in Chicago? I would love to attend one and hear you talk. I would drag some of my big and awesome litigaton friends with me. They don’t quite know what to make of this hack economist.

Let the children play!
They still have God to settle up with.
We still need our gurus to steer us through the uncertain future.
Masters will be masters!
The best and brightest make up for the “up-front investment” later on

Chief