If your stomach can handle it, think back to 2008 when there was panic about Wall Street banks, in the wake of Lehman Brothers' bankruptcy. The government gave insurance firm AIG an $85 billion loan in exchange for a 79.9% stake in the company, to prevent it from collapsing and taking other institutions with it (see: Too Big To Fail). Well, now former AIG CEO Maurice "Hank" Greenberg is suing the government, claiming the takeover was unconstitutional and that the "Fed breached its duty to A.I.G. shareholders when it unwound the company’s disastrous bets on mortgage securities," the NY Times reports. more ›

Shocking: The Federal Crisis Inquiry Commission issued a subpoena to investment firm Goldman Sachs, with FCIC chairman Phil Angelides saying, "Goldman Sachs has not, in our view, been cooperative with our requests for information, or forthcoming with respect to documents, information or interviews." But who said that getting answers from a vampire squid was going to be easy? more ›

Yesterday about 97% of the current employees at A.I.G. agreed to collectively accept a $20 million reduction in what was to have been a whopping $198 million bonus payout. Now it's just a modest $100 million, give or take a few mil. What heroes! But what about that other three percent who won't accept anything less than the fully gratuitous payout? And the 65 or so former employees who are demanding 100% of the promised bonuses—taxpayer and human decency be damned? Can Attorney General Cuomo get us their names and addresses and charter us a bus to Greenwich? more ›

Sure, there was populist anger over the $165 million in bonuses that bailed-out firm AIG said it had to pay out to executives. And some of it was returned. But now it turns out that less than half of the $45 million AIG executives promised to give back has actually been returend. more ›

A Treasury report suggests that the government will, as the NY Times reports, "recover all but $42 billion of the $370 billion it has lent to ailing companies since the financial crisis began last year, with the portion lent to banks actually showing a slight profit." The Obama administration had estimated TARP-related losses of $341 billion. more ›

The NY Times looks at how former AIG head Maurice Greenberg is building a new company that one person called "A.I.G. Two"—especially since he's "raiding people out of 'A.I.G. One.'" Which could be nice for AIG execs who now face limited pay. The problem? The Times says, "People who work in the industry say that if he is already luring A.I.G.’s people, he may soon be siphoning off its business and, therefore, its means to repay its debt to the government." more ›

Sure, little Damien Sosa was on the cover of People with Flight 1549 Captain Chesley Sullenberger—but his mom and 4-year-old sister are supposed to pay for their own therapy after the scary though miraculous flight. At least that's what U.S. Airways' insurer, AIG, tells the Sosa family, according to the NY Times. While the family has health insurance, Tess Sosa thinks AIG should help foot the bill, "It’s like telling me, ‘We aren’t responsible for this. This is your trauma. You deal with it.'" And when Sosa mentioned the taxpayer bailout, the AIG claims person said "their division didn’t get a cent from the bailout." AIG has offered others passengers $10,000 if they release them further liability. Airline insurance expert Bruce Chadbourne isn't surprised AIG is playing "hardball" but adds, "Even though they’re giving the passengers a hard time, eventually they will be compensated to some extent. There’s no big pot because there’s no death. But there’s still mental distress, and it is a compensatable illness which, eventually, in my opinion, they deserve. They went through hell." more ›

Embattled insurance giant AIG may be near a deal to sell two buildings—70 Pine Street and 72 Wall Street which are connected by skywalk—for $100 million to an overseas buyer, according to the Post. The deal is rumored to be for $100 million: "The buyers expect to create a mixed-use development that could include residential and retail. But because of anti-terror legislation, the Dept. of State will have to approve any overseas buyer." Well, $100 million is still way less than AIG's executive compensation payouts (AIG has received $182.5 billion in government aid). The company plans to move its employees in 2010. more ›

AIG CEO Edward Liddy will be stepping down from the troubled insurance behemoth—once a replacement can be found, natch. Liddy, whose salary was $1, became CEO last September "within hours" of the firm's bailout; CNBC explains his "mandate [was] to sell off assets to generate funds to repay taxpayers." Liddy, who weathered criticism when hundreds of millions were handed out in bonuses, is the fifth person to run the company since 2005. An analyst told Bloomberg News, "It really is a terrible job, I’m not sure who would really want it. There is so much political baggage that whoever takes over the company is going to find it an extremely difficult and thankless job." In other news, Richard Fuld announced his resignation from Lehman Brothers last night, "I believe that we have worked together effectively in achieving an appropriate transition." more ›

So, you know how there was a lot of populist outrage over AIG's $165 million in bonuses? Well, now, Politico reports that the number is now almost three times bigger: "In a response to detailed questions from Rep. Elijah Cummings (D-M.D.), the company has offered a third assessment of exactly how much it paid out in bonuses last year. And the new number, offered in a document submitted to Cummings on May 1, is the highest figure the company has disclosed to date. AIG now says it paid out more than $454 million in bonuses to its employees for work performed in 2008." Politico points out that when it asked an AIG spokesman about bonuses, he gave them a $120 million number. The spokesman now says the $454 million “reflects all types of variable compensation across all of our businesses," while the $120 million was for folks at headquarters and other "high ranking officers." more ›

Despite signing up pledges from a roster of prominent donors whose company names have become synonymous with the financial collapse of the last year, the National September 11th Memorial has managed to keep its finances in good health. More than 15% of the $350 million the memorial announced raising a year ago was promised by financial firms like Merrill Lynch, Bear Stearns, Bank of America, JP Morgan Chase, Barclays and AIG and most have remained on target with their contributions. Notably, the Starr Foundation, which was created by AIG's founder and holds a lot of AIG stock, has given $20 million of its promised $25 million. The only one that dropped off dramatically was Lehman Brothers, who went from a $5 million pledge to a $1 million donation. The memorial's chairman Mayor Bloomberg said, "The creation of the memorial is uniquely important to New Yorkers, and the fact that the city’s corporate citizens are honoring their commitments to it despite the downturn is a reflection of that.” Bloomberg himself has already made good on a $15 million pledge. more ›

Treasury Secretary Timothy Geithner gave a few details about the Treasury's draft bill giving it "unprecedented emergency powers to wind down faltering nonbank firms such as American International Group Inc.," the Wall Street Journal reports. more ›

Last night, President Barack Obama said he saw "signs of progress" with the American economy but also added the public will need to be patient, "It’s important to remember that this crisis didn’t happen overnight and it didn’t result from any one action or decision. It took many years and many failures to lead us here. And it will take many months and many different solutions to lead us out. There are no quick fixes, and there are no silver bullets." more ›

Treasury Secretary Timohty Geithner and Federal Reserve Chairman Ben Bernanke told Congress that the "U.S. government needs to be able to take over and wind down a broad range of economically important non-bank financial institutions," the Wall Street Journal reports." Geither gave an example, "As we have seen with AIG, distress at large, interconnected, non-depository financial institutions can pose systemic risks just as distress at banks can." Bernanke added, "If a federal agency had had such tools on Sept. 16, they could have been used to put AIG into conservatorship or receivership, unwind it slowly, protect policyholders, and impose haircuts on creditors and counterparties as appropriate." The Fed Chairman also said he knew about the AIG bonuses last fall, warned AIG about them, and wanted to sue, but was told suing could give the bank big punitive damages if the government lost the case. The pair's testimony did help stocks rally in the afternoon, but ultimately the markets lost a little of yesterday's ground. more ›

Over the weekend, a crew removed any mention of "American International Group" from the exterior of 175 Water Street. That office is where the property-casualty business is located and AIG explained that it would be renamed "AIU Holdings Ltd" to "distinguish these well-capitalized businesses from AIG." The Post asked employees outside the building how they felt: One said, "I feel a lot safer now, it's true," while another, who said she was harassed outside the office, added, "If it means we can all turn up to work feeling safer, it's a small price to pay." Last week, AIG CEO Edward Liddy told Congress, "I think the AIG name is so thoroughly wounded and disgraced that we're probably going to have to change it." more ›

Attorney General Andrew Cuomo revealed that most AIG executives who received big bonuses returned them. Nine of the top 10 recipients may return their money; casting a slightly wider net, 15 of 20 executives returned their bonuses, which accounts for $30 million of the controversial $165 million bonuses that the extremely bailed out insurer doled out. The NY Times reports, "Mr. Cuomo acknowledged that some bonus recipients declined to give back bonuses, especially those overseas who are outside the jurisdiction of New York State. He said he did not think it would be in the public interest to release the names of those who gave back their bonuses." About $80 million in bonuses were given to American employees, and Cuomo expects to get that money back. more ›

Reader Dan Albanese sent us photographs of the anonymous-looking exterior of 175 Water Street. The building formerly had "American International Group" prominently over the front doors, along with "AIG" etched in the windows and doors. According to the Post, AIG spokespeople explained that "the company had decided to replace the large AIG sign -- outside the entrance to its property-casualty offices -- as part of its plan to change that operation's name to AIU Holdings Ltd"—to "distinguish these well-capitalized businesses from AIG." Is the subtext, then, that the employees here are not the ones protesters should be harassing? more ›

Eliot Spitzer continued its comeback tour with an appearance on Fareed Zakaria's CNN show yesterday. While most of the talk about about the economy and Spitzer's former target (back from his Attorney General days) AIG, Zakaria got to brass tacks:

ZAKARIA: You know that a number of people watching you are going to say, "Eliot Spitzer doesn't have credibility to talk about these issues" because of what happened over the last year with your own behavior. What would you say to them? more ›

Yesterday, the Connecticut Working Families Party organized bus tours of AIG's Wilton office as well as the homes of various AIG executives, just as Connecticut Attorney General said, based information he received, the bonuses given by the bailed-out firm were around $218 million, $53 million more than previously reported. Protesters yelled "Bail out Main Street, not Wall Street" outside the office," while holding signs like "Dude, Where's My Life Savings?" more ›

Everyone is mad as hell at AIG and they're not going to take it anymore! From President Obama and NY Attorney General Andrew Cuomo railing against AIG and its executive compensation to the House passing a bill to tax 90% of all bonuses from financial firms receiving bailout funds, the anger has also spread to the Connecticut suburbs where many AIG executives live. more ›

Today, the House of Representatives passed a bill, 328-93, that would put a 90% tax on bonuses from financial firms receiving bailout funds, such as AIG. One of the bill's cosponsors, Rep. Carolyn Maloney (D-Manhattan), who proposed a 100% tax earlier, said, "I’m proud that the House has taken action to return these bonuses to the federal treasury... It would be morally reprehensible and fiscally irresponsible to allow millions to go to those who cost our country billions. Bonuses should be based on creating value, not destroying it." more ›

With various officials being blamed for the economy, bailouts, and bonuses, one politician who has come out of the scrum looking stronger is New York's Attorney General Andrew Cuomo. He has drawn praise from GOP members on the Senate floor and led one local DNC committee member to say, "This is a is a bipartisan disgrace and Andrew Cuomo has risen above the partisan game of who’s at fault by showing real leadership and taking real action." more ›

While Treasury Secretary Timothy Geithner says the U.S. government is demanding that the AIG pay back extravagant bonuses, some suggest he should have known about the "retention compensation" since he was NY Federal Reserve chairman when the government bailed out the insurer. Senator Christopher Dodd even said that the Treasury forced him to add language to the stimulus bill that created a loophole preserving the bonuses. The NY Times's feature on Geithner calls this a "defining moment," reporting how he works 15 hour days and that he's doing of work "without the usual complement of Treasury assistants because of administration delays in vetting potential nominees — a consequence in part of its efforts to avoid embarrassments like the disclosures of Mr. Geithner’s past tax lapses." Political consultant Joe Trippi tells Politico that Geithner needs to fight back or else, "Some of this anger that is dissipated when it is aimed at AIG or Treasury could start to take a toll on the president and the White House." more ›

AIG CEO Edward Liddy was in the hot seat today, testifying in front of the House Financial Services Committee, and revealed that he had asked some employees to return their controversial bonuses, "Specifically, I have asked those who received retention payments of $100,000 or more to return at least half of those payments." According to the NY Times, "The A.I.G. chief said that some recipients had already offered to give up all of their bonuses, and he added later that he expected to get most of the money back." more ›

AIG CEO Edward "We're Legally Obligated to Pay Millions to Executives Who Helped Bring the Company Down" Liddy is scheduled to face questions from Congress's Financial Services Committee today. Yesterday, Liddy wrote an op-ed in the Washington Post, "The anger is understandable, and I share it... No one knows better than I do that AIG has been the recipient of generous amounts of government financial aid. We are acutely aware not only that we must be good stewards of the public funds we have received but that the patience of America's taxpayers is wearing thin." more ›

Republican Senator Charles Grassley of Iowa told a Cedar Rapids radio station how he really feels about the AIG executives taking bonuses after needing to be bailed out with $170 billion in federal money: "I suggest, you know, obviously, maybe they ought to be removed. But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide. And in the case of the Japanese, they usually commit suicide before they make any apology." His spokesman later said Grassley was speaking rhetorically. more ›

AIG's insistence that it must pay out over $165 million in bonuses to, as the NY Times put it, "executives in the same business unit that brought the company to the brink of collapse last year," has now drawn the ire of President Barack Obama and NY Attorney General Andrew Cuomo. more ›

As AIG weathers the bad PR storm from issuing over $165 million in bonuses to executives that helped bring the company down, the insurer has released the names of the companies and municipalities it paid out. The NY Times reports that AIG repaid "Goldman Sachs ($12.9 billion), Merrill Lynch ($6.8 billion), Bank of America ($5.2 billion), Citigroup ($2.3 billion) and Wachovia ($1.5 billion)" as well as foreign banks "Société Générale of France and Deutsche Bank of Germany, which each received nearly $12 billion; Barclays of Britain ($8.5 billion); and UBS of Switzerland ($5 billion)." California and Virginia each received about $1 billion each (NY is getting $210 million). You can see read AIG's statement (PDF)—the company used about two-thirds of its rescue funds for these payments. As for the bonus outrage, Rep. Barney Frank said these execs "may have a right to their bonuses. They don't have a right to their jobs forever," adding "it does appear to be that we're rewarding incompetence." more ›

Insurer AIG, whose business has been shored up by $170 billion in federal funds, says it is proceeding with $165 million in bonuses to, as the NY Times puts it, "executives in the same business unit that brought the company to the brink of collapse last year." Last week, Treasury Secretary Timothy Geithner told AIG it had to scale back its compensation, but, in a letter yesterday to Geithner, AIG CEO Edward Libby cited legal obligations saying its "hands are tied" and said the government's involvement would make it difficult for the company to retain its best employees. Um, wouldn't most people would understand not getting bonuses for crappy performance? Also, the Wall Street Journal says that bonuses total...$450 million. Naturally, this hits the sweet spot of the government (and public) railing against crazy bonuses—Rep. Barney Frank wants to find out if the bonuses are recoverable. Related: AIG reported a 4th quarter loss of $61 billion. more ›

The Dow Jones Industrial Average is currently at 6,833, after falling over 200 points, making its first sub-7,000 visit since 1997. A large part of the drop is due to the government's additional bailout funds for AIG, whose CEO wouldn't rule out another bailout. Elliot Wave International's Robert Prechter (whose company predicted the 1987 stock market crash) told Bloomberg Radio, "The bear market has only begun. I don’t see the clear weather yet," while UBS director of floor operations Art Cashin told CNBC, "You're beginning to hear people get a little more despondent as this continues to sell day after day. There's a growing sense of frustration about not quite being in control here — Not knowing where the next shoe in Imelda Marcos's shoe closet is." more ›