Just like during the last Great Depression, a Bonus Army is forming.
Not the one formed 76 years ago by disgruntled veterans setting up camp in D.C. to demand respect and money.
This century’s Bonus Army consists of Wall Street execs.
While Wall Street CEOs make a big show of eschewing bonuses and dropping their stated salaries to zero, they’re still giving one another bonuses. They’ve just changed the name to “retention program.”
This is far less funny wordplay than Illinois Governor Rod Blagojevich‘s referring to Barack Obama as a “motherfucker,” a factoid I culled yesterday from the graft complaint against the governor.
Take AIG, the giant insurer that got some of the first bailout money and is still in freefall. Seeking Alpha notes this morning:
The latest installment in the farcical story of the black hole that is AIG(reed) (AIG) is that they have managed to chalk up another $10bn in losses.
It must be time for another trip to that luxury spa. They have some neck with news that managers are getting retention payouts topping $4 million! Where is the oversight? Who is minding the purse strings on behalf of Joe the Plumber? Maybe one of the key challenges for the future will be to prevent monstrosities like AIG from becoming “too big to fail” as the alleged economies of scale are dwarfed by the staggering costs of bailout nation.
Investment News gives the straight version:
American International Group Inc. will award 38 of its executives with as much as $4 million each as part of a retention program, according to a letter from chief executive Edward Liddy.
Employees with salaries between $160,000 and $1 million can receive between $92,500 and $4 million in retention pay, according to a Dec. 5 letter Liddy sent to Rep. Elijah Cummings, D-Md., and a member of the House Committee on Oversight and Government Reform.
Cummings did not take the news well, writing a nasty letter back to Liddy, as the AP notes:
“Concerned” is, in this case, letterspeak for “so pissed off that blood is spurting from my eyeballs.”
Instead of retention for these Wall Streeters, how about detention?
And not in the California spa where AIG execs relaxed after they got their $85 billion bailout money.
Now, while I have you detained …
NO PARTICULAR ORDER:
Wall Street Journal: ‘Panel to Criticize Handling of Bailout’
The panel overseeing the Treasury Department’s $700 billion financial-rescue fund is expected to release a report Wednesday that is highly critical of the government’s handling of the bailout, people familiar with the matter said. It will also press the Bush administration to act more aggressively to prevent foreclosures. …
The Treasury Department has faced a steady drumbeat of criticism about the way it has handled the first half of the $700 billion fund, which Congress authorized in October to help stabilize the financial system.
Congress could move to block Treasury’s access to the remaining $350 billion portion of the fund, a prospect government officials fear could send financial markets reeling. House Financial Services Committee Chairman Barney Frank (D., Mass.), said Monday that Treasury would have to commit to using a large amount of the money to help prevent foreclosures in order to satisfy him. He said it would still be a tough sell with other lawmakers.
Wall Street Journal: ‘Governor Is Arrested on Graft Charges’
… The arrests came after a highly publicized investigation that has been continuing for more than five years and has helped pull Mr. Blagojevich’s approval rating as low as 13%, so weak that even before Tuesday’s arrests, there was talk of impeachment.
The government alleged Mr. Blagojevich was considering appointing himself to the Senate to avoid impeachment, resuscitate his career and make corporate contacts that would pay off after leaving public office. He also believed, the government claimed, that he would have greater leverage to rehabilitate his reputation and consolidate his power base for a possible run at the presidency in 2016.
Register (U.K.): ‘Facebook ignores huge security hole for four months — and counting’
Wall Street Journal: ‘AIG Faces $10 Billion in Losses’
N.Y. Daily News: ‘Workers’ hero falls from grace’ (Juan Gonzalez)
Gov. Rod Blagojevich of Illinois showed up at Republic Windows and Doors to proclaim support for 250 workers who refused to leave the factory after the bosses shut it down.
The next time Blagojevich appeared in public, it was in a federal courtroom, accused Tuesday of trying to sell Barack Obama’s Senate seat and other of acts of brazen corruption.
Here was Blagojevich, a one-time prosecutor, a man who rose to the highest office in this state as a so-called reformer, caught on FBI wiretaps in one astonishing shakedown after another.
Slate: ‘Unsolicited Advice for David Gregory’ (Jack Shafer)
Instead of dissipating, the cult of Tim Russert has only swollen in the six months since his death. One measure of the cult’s staying power has been the media’s incessant speculation on who would replace him as host of Meet the Press. …
The media fuss wasn’t so much about the importance of who was good enough to sit in Russert’s chair but–like the over-coverage of Russert’s death, funeral, and memorial service–another demonstration of the Washington press corps’s extraordinary high regard for itself.
So, the president-elect thinks the economy will get worse before it gets better. As refreshing as his candor is, Barack Obama really doesn’t understand what he’s up against. …
Unless the incoming president quickly gets his act together we are going to be hearing the word “depression” a lot next year and he will — in a very short period of time — be as unpopular as the guy leaving the job.
Washington Post: ‘A Perfect Storm? No, a Failure of Leadership’
Washington Post: ‘Pakistan Detains Extremist’
House arrest of suspected terrorist leader Masood Azhar draws scoffs from U.S. and Indian officials.
For the second time in a decade, suspected Pakistani terrorist leader Azhar was placed under house arrest yesterday after being linked to attacks in India. His detention, announced by Pakistan’s Defense Ministry, was intended to show the country’s resolve in hunting for the organizers of last month’s deadly rampage in Mumbai.
Yet in the U.S. and Indian capitals, the news of Azhar’s arrest drew mostly scoffs. As officials in both countries noted, Pakistan never bothered to charge the Kashmiri extremist when it detained him in connection with a deadly attack on India’s Parliament in December 2001. A Pakistani judge freed him 11 months later.
Jewish Journal [Via HuffPost]: ‘The Los Angeles Bagels’
… From John Peter Zenger until Sam Zell —have those names ever appeared in the same sentence before? — press owners have maintained that their mission is to do well while doing good, to turn a profit while also living up to their democratic responsibilities. Many of them have figured out how to do both: partly by subsidizing the stuff we need to be good citizens by selling us the fun and fluff we want; partly by deploying journalists’ storytelling skills in order to turn essential information into compelling must-reads.
To Sam Zell, however, running the [Los Angeles] Times, as well the other papers he bought when he acquired the Tribune Co., isn’t a public trust, and its stewardship doesn’t include serving the public interest, no more than would running a bagel joint.
N.Y. Times: ‘Investors Buy U.S. Debt at Zero Yield’
In the market equivalent of shoveling cash under the mattress, hordes of buyers were so eager on Tuesday to park money in the world’s safest investment, United States government debt, that they agreed to accept a zero percent rate of return.
A senior Justice Department official said today that “99.8 percent” of the department’s work with President-elect Barack Obama’s transition team has gone smoothly. The 0.2 percent snag: The department has reservations about granting the team’s request to review classified legal opinions related to secret CIA and National Security Agency programs.
The opinions, some of which have been released to Congress in redacted form, contain the legal rationale of the NSA’s warrantless spying program and the CIA’s detention and interrogation policies, among other intelligence initiatives.