Posts Tagged ‘AIG’
Tags: AIG, banks, cartoon, CEOs, corporations, GM, guns, profits, SEC, violence
Tags: AIG, art, banks, cards, crisis, games, Wall Street
The series continues with the Nine of Clubs: Joe Cassano.
Joseph J. Cassano was a prominent insurance executive at the American Insurance Group (AIG) Financial Products Division from 1987 until February 2008.
Cassano sold billions of CDOs without any collateral backing them up. This type of insurance had been deregulated by Senator Phill Gramm’s Commodity Futures Modernization Act of 2000 during the Clinton Presidency. This legislation included the infamous “Enron loophole” that exempted oil and energy transactions from regulation. This fueled the ENRON debacle.
Cassano received $280 million in cash and $34 million in bonuses during his career at AIG. He remained on the payroll even after U.S taxpayers were asked to provide AIG with $85 billion to correct his divisions errors. When the financial crisis boomeranged in 2008, AIG could not pay insurance money to investment banks for their collapsing derivative products. Joseph Cassano was a major player in this financial meltdown.
Tags: AIG, banks, capitalism, crisis, Elizabeth Warren, Leonard Horner
Here’s Barry Ritholtz’s overall assessment of Tim Geithner’s bailout of AIG:
The Federal Reserve Bank of New York, in a desperate headlong rush to rescue American International Group, screwed the pooch.
Ritholtz bases his analysis on the the most recent audit from the Office of the Special Inspector General (SIG) for the Troubled Asset Relief Program.
Andrew Leonard tries to be more sanguine but ends up in the same place:
OK. I’m wrong, again. It is embarassing [sic] and pathetic. The Fed was played for patsies. And it was Tim Geithner’s Fed.
Elizabeth Warren, a contemporary Leonard Horner (the hero of volume 1 of Capital, whose “services to the English working class will never be forgotten”), has done more than anyone else in revealing how TARP involved taxpayers’ subsidizing billions in investor profits with little oversight or results, especially for those at the bottom. Her own way of putting it:
Look, it saved the top of the system. It helped stabilize it, but not so much for families who are hard hit down on the ground, the real economy. We said, in effect, at the top, there’s really not any pain in return for taxpayer support. Not so much so when it comes to folks at the bottom. We said wait a year, we’ll get there, we’ll do what we can.
The way I think of it is: they say something like “Give me your money, investors and I’m going to Las Vegas and put it all on red 22. And if red 22 comes in — woo! we are RICH. If red 22 doesn’t come in, don’t worry because the taxpayers will pay you back the money you invested.”