more AIG

[mattycub]

In response to my post yesterday, Greg mondragon brought up a reasonable point. Since my response to it is as long as a normal post, I thought I'd repurpose it as a post. Double content generation points! Greg's comment:

I appreciate you taking the time to write this, but one question pops out at me: there are two assumptions here - one is that there are

Comments

[foodpoisoningsf]

My sense is that "these people" are at their roots, gamblers, and that they're bluffing when they say their skills are critical to retain. This is more Liar's Poker.

Someone here is going to get scapegoated. If it's the upper-level management of certain divisions of AIG, so be it. In fact, it's probably a necessary cathartic.

[mattycub]

Well, but it's not "these people" that are saying it. It's the guy that we hired to run the company after we took it over, who from what I can tell has no real incentive to lie. His job is to get as much of our money back out of this company as possible. If he says he did the risk analysis and decided that it was important to try to retain these people, I'm prepared to accept that analysis if there's no evidence-based refutation of it offered up. I mean, do you or I really know how easy it is to find people that can successfully manage a $1.6T derivatives portfolio? On short notice? At a company everyone hates?

Again, the big gamblers were the folks running the CDS sub-division. Those people are gone. The upper level management folks that I agree should be scapegoated? Those folks are gone too. We already got rid of them. Liddy took great pains to make the case that a lot of the people that are left in the FP division are good people who have done nothing wrong and didn't contribute to the mess the company is in.

[foodpoisoningsf]

If Liddy is unable to save these bonuses, and the 400M in bonuses coming down the pipeline at AIG, no one he knows will ever speak to him again.

He'll be playing golf, alone, for the rest of his days. Probably in Belize or Uruguay.

He should have changed his name, too. "Liddy" brings up deeply submerged memories of Watergate.

[mattycub]

Good thing we couldn't convince Bichard Bixon to run AIG for us, think of the psychic damage that would cause! :)

If Liddy is unable to save these bonuses, and the 400M in bonuses coming down the pipeline at AIG, no one he knows will ever speak to him again.

Eh. This is exactly the kind of statement I'm skeptical of. I could be naive, but I don't buy it as a reasonable motivation.

[foodpoisoningsf]

I know that I'm treating a subject that's very serious with a certain bitter levity, but I think the fear of social exile is a very potent, especially in the clubby world of finance. These are not lawyers, where everyone shakes hands and moves on to the next case.

Think about the complaints about corporate compensation committees- massive reach-arounds to get each other the best deals. If you're not voting for your friend's multi-million dollar severance packages, they're not going to go to bat for you.