The biggest news this weekend was all about A.I.G. Which sucks. This story is boring and oppressive, and fills people with a kind of numb, impotent rage. Naturally. They are using our money. Badly.
On Sunday, the twice-bailed-out insurance giant disclosed the names of dozens of financial institutions that benefited from the first-round of bailout cash. (The group had argued that disclosure could "damage its business relationships," but came under pressure from Washington to fess up. ) Then, shortly thereafter, it came out that A.I.G. will pay $450 million dollars in bonuses to executives -- many of whom work in the financial derivatives division. That's the business unit that lost $40.5 billion last year and, basically, caused the multinational to collapse. Add to all this a rare "60 Minutes" interview with the Federal Reserve Chairman, Ben Bernake, who made it pretty clear that he is not an A.I.G. fan. By Monday morning, everybody was pissed.
Including President Obama, who today ordered his Treasury Chief to try and block the bonuses. “Under these circumstances, it’s hard to understand how derivative traders at A.I.G. warranted any bonuses at all, much less $165 million in extra pay,” Obama said.
Good luck. CEO Edward Liddy note that outside counsel had advised that the payments to employees at the financial-products unit are binding obligations.
"I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them," he wrote. "Honoring contractual commitments is at the heart of what we do in the insurance business."
In other words, A.I.G. is so screwed that even the very executives who destroy the company have contracts which award them huge bonuses. And this is the firm we are trying to save?
Thank goodness, there is other stuff going on in the world to talk about. Like Pakistan, which had some kind of meltdown. Wildly over simplified, Gen. Musharraf's successor, President Zardari, had pledged to reinstate a fired judge, Justice Chaudhry. But he was accused of delaying the move because he feared the judge might revive corruption cases against him. The people protested, rioted really, and the judge will be reinstated. All in all, especially given this is Pakistan we are talking about, a pretty positive outcome.
Lastly, we like this Berlin whorehouse that found a tool for fighting recession. The Pussy Club has made headlines in the local press by offering, shall we say, all-inclusive visits. For 70 Euros, or about 90 bucks, clients get, pardon the pun, all-you-can-eat access. That is, unlimited ladies, drinks and food. That's it. We're moving to Berlin. From now on, just call us "Herr Grinder."
