Lets not go crazy over AIG bonuses.

March 17, 2009

I’ve watched enough Hollywood Entertainment to have seen the scene where the hero defuses the BOMB a 1000 times. The Hero only has a few seconds and he has to choose between a few colored wires. Red or Blue??? Tense suspense through and through. But how accurate is that. Not very. After a little online research I find that most bombs are never defused. They are instead control explosions. That is, Bomb experts simply explode the bomb with minimal damage. This is the art not the defusing. Because only the bomb builder can accurately defuse.


This is what we have to remember with the MESS surrounding AIG. The same people who created the GINORMOUS derivative bomb that brought down AIG are being asked to defuse. And for good reason. The stakes are too high. Bring in the bomb maker. Of the maybe hundred of so people in the world that could have leveraged so much with so little a few dozen reside at the financial products division of AIG. These are the same group of people who many rightfully blame for a large chunk of our economic crisis. These people are the bomb makers. They, like most bomb makers are very good at what they do. Given the stakes in the trade you have to be. One false move and KaBoom!!! We had a near “KaBoom” last year. And acorrding to Ex Treasury Secretary Paulson to “avoid a severe economic slowdown” we needed the Troubled Assets Relief Program. TARP allowed the world to avoid a “KaBoom” for a few months but we still needed someone to defuse. Hence the AIG bomb makers to the rescue.

Piece by piece the AIG bomb makers have been steadily taking apart their creation. Like Dr. Frankenstein only they truly know the monster they created. And so far according to most done an excellent job. We are much further than anyone expected 6 months ago. And last week on 60min Uncle Ben said we could even be out of the recession by 4th Qtr. So how do you compensate someone for doing a good job? Money, Cash, Bonus? Right.This is all that was done last week at AIG. These guys are doing a great job and they expect to get paid. Short of issuing criminal charges and hanging immunity in front of their faces in exchange for bomb defusing I don’t see any other way but to pay people for what they do best. Although we could have fired these people and brought in others but…#1 why take the chance, remember it could still “Kaboom”, #2 Who are you gonna call? There really aren’t that many people in the world that you could?, #3 Expect to pay twice for any new person you hire. They would understand the position you are in and ask for 2X.

The sky is gonna fall!!!

So this is why we are where we are. Paying the same people that created the mess to undo. Its not without precedent. Happens all the time on many different levels. At this point lets keep these people happy. Who wouldn’t pay a 100 Million to save a few Trillion?

On a side note. Which no one in the press has mentioned. And this surprised me. Because It’s kinda important. And maybe I just know b/c I know. And maybe others don’t. But how could you ignore? We are talking about LONDON. That is LONDON England. It’s the financial products division of AIG in LONDON. These guys aren’t even U.S. citizens. Or pay U.S. taxes. Why the HELL should they care about U.S. government money to pay bonuses??? I probably wouldn’t care about English government pounds to pay me nor Canadian dollars nor Mexican pesos.

AIG London

As in London England

Maybe Obama has a nationalistic card up his sleeve that he is waiting to pull out on England and this is the Tipping Point. England and Europe are much further behind us in overall economic recovery. So we will have to wait and see.

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