Long story short: I am a moron.
Long story not short: I was screwing with the widgets and deleted all the ads, and had to do a restore from the backup at 5 am. I will put posts that disappeared back up in a little bit.
Site Issues
by John Cole| 12 Comments
This post is in: Site Maintenance
GR
I think Cunningham’s comments are fair. The government will set a bad precedent by finding an ad-hoc way to abrogate these bonuses.
But then again, AIG arguing that they must honor the bonus payouts is equivalent to someone showing up to a restaurant, finding that is had burned down, and still demanding that they honor his 8:30 reservation and cook up the house special.
Of course, in this case, the person demanding service is the same person who burned down the restaurant earlier that day.
Xenos
My experience in the insurance business is limited and out of date, so I may be failing to get some fundamental principles here, but all the parties involved in the CDS business were deemed to be Sophisticated Persons who did not need regulatory oversight for protection. The facts seem to be pretty simple:
–These sophisticated banks, sovereign funds, hedge funds, and so on bought insurance contracts from a British subsidiary of an American Insurance Company.
–Being Sophisticated, these insurance buyers knew that under the US system the federal government does not regulate much of the insurance business, leaving regulation to the states.
–New York State, however, had limited means with which to investigate and regulate the overseas entities controlled by AIG. Certainly if AIG did not conduct this business in NY, NY would have limited interest in regulating this london-based industry.
–So these insurance buyers were responsible to find out, on their own, what sort of reserve requirements were out there for these contracts, and whether or not these reserves were met. No government, as far as I can tell, held the responsibility for making sure the AIG contracts were legitimate. Caveat emptor.
So: these buyers of AIG contracts have no one other than themselves to blame. These funds had a fiduciary interest to make sure the insurance reserves would be adequate, and at the very least they knew in case of catastrophic, system-wide default the insurance would be worthless. It is the same risk every buyer of insurance takes if they pay into a policy, the insurer subsequently goes out of business, and the buyer then incurs an otherwise covered loss.
So the US government, in order to protect the dollar and the US economy as a whole, decides to step in and cover a lot of the losses to these Sophisticated Persons. Under these conditions, why is it necessary for AIG to even exist. These losses can be calculated, and the positions unwound to the degree the US Government finds appropriate, without anyone at AIG drawing another paycheck.
Meanwhile put the mess through bankruptcy and get the bonuses treated as preference payments, if you can. Take the whole bonus issue out of politics and get out front with what the policy really is, and why it is necessary.
gwangung
That’s not being a moron. Being a moron is deleting all comments and posts AND NOT BEING ABLE TO RETRIEVE THEM.
Not that I’m speaking from experience or anything like that, no, not at all…
The Grand Panjandrum
After you are done restoring go read Tbogg. Its vintage Tbogg:
Its a gutbuster.
georgia pig
I wonder if all the furor overlooks the Sword of Damocles hanging over this whole mess in the form of an ungodly mass of potential lawsuits. Barney Frank made an elliptical reference to it yesterday. I imagine the plaintiff’s bar is salivating over the prospects. The big fucks (Cassano, etc.) at AIG are wide open for shareholder derivative suits based on charges of fraud, misrepresentation and breach of fiduciary duty. So are a lot of their customers. AIG and its directors and officers (past and present) could be sued by the holders of the CDSs if they don’t pay out and can be sued by their shareholders if they do. The companies that purchased CDSs (and their officers and directors) could be sued for negligence by their own shareholders for thinking that AIG could insure their exposures at the rates AIG was charging and its level of capitalization, as I imagine that it was an open secret that rating agency ratings were bullshit. I imagine is was more widely known that this whole thing was a house of cards than we’ve been led to believe by the press coverage, but that shit will come out in discovery in lawsuits.
Dennis-SGMM
I don’t see anything moronic in what you did. I’m with gwangung; losing my witty and insightful comments forever would have been bad – tragic, even.
Tokyokie
I’m pretty sure I recall Geithner and Summers lobbying behind the scenes for the removal of the comments. It’s just wrong to blame Dodd for it, even if he is a chowderhead.
passerby
I blamed myself for the BJ anomalies and did a system restore. I always feel like a monkey pulling levers and pushing any button that lights up when it comes to my tubes machine. So ‘moron’ is highly subjective.
Mr Furious
I hope you can retrieve all of my brilliant and insightful comments from earlier…otherwise you ARE a moron.
AhabTRuler
Really seems like the least of worries, of late.
Of course, it is during such times that such small things can seem so important.
luc
FireFox Problems !!!
Since about a week I am having problems with the Balloon Juice comments pages. After seeing the comments for about 3 seconds the entire webpage switches to an:
http://urlseek20.vmn.net/search.php?q…… page with has the mesage on top:
The page cannot be found 404 Error
Running the latest Firefox. No such problems in Opera.
DougJ
Does this mean you’re giving back half your bonus?