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DPChallenge Forums >> Rant >> The financial bailout... the cause of the problem?
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 10/07/2008 05:47:20 PM · #301
Read this and vomit.
 10/08/2008 12:35:23 AM · #302
Originally posted by Phil:
Read this and vomit.


Unbelievable... these bastards have absolutely no conscience. Everyone who went should have their share of this deducted from their pay.
 10/08/2008 07:23:09 PM · #303
Originally posted by Prash:
Originally posted by posthumous:
Originally posted by Prash:
I still believe a part of it also affects consumer confidence ultimately. Tell me.. would one spend as much this holiday season if they were scared to lose their job, or their house?


Yes, consumer confidence is a huge consideration, but it's not the reason for the Bailout specifically. After all, Joe Consumer hates the bailout.


Right. Sorry I wasnt clear. That was not the reason as I understood also. That is/may be one of the consequences.
Thanks again. Really appreciate it.

ETA: I just saw on TV, an LA Times columnist saying that now that the bailout is in process, the next most important part is consumer spending in teh coming months. Apparently, the bailout is like a morphine shot to reduce pain during the plunge.. the plunge will happen anyways.. slowly now.. over the months. And how much consumers spend will become a big part of how the economy takes shape now. So get your wallets out again, guys. The bailout wasnt expected to turn the economy around anyways (there goes the 700bln check down the carribeans and the limo house).. so now its up to us middle class dumbies again to spend as much as we can this holiday season to help refuel the economy. We paid then, and we pay now. lol!!


Just heard on NPR in an analysis report. Its not about liquidity anymore. The bailout was an attempt to boost the supply side of the market(banks, companies etc.). Now it is about demand side.. and the confidence... the lenders dont have confidence that their short term loans to the businesses will be repaid, so they are holding tight to their money.

I also heard that the state of California and Massachussets, for example, have to routinely raise operating expenses by selling whats similar to 'anticipatory tax notes'.. so they borrow against a tax revenue that will come in future. And this year, both Calif. and MA are having difficulties finding buyers for these traditionally secure bonds (that have never defaulted ever). So now they may have to turn to the feds to loan them some money.

ETA: Retail stores have started seeing the effects now. From last month's sales reports, every store (except WalMart:-) suffered a decline of at least 10% in sales last month. This is after most of them put so much merchandise up for sale (10-50% off) to get rid of the summer inventory in time for recieving the holiday inventory. A 10% decline in sales shows a decline in consumer confidence as I pointed earlier. And as many of these stores fail to repay their short term loans against inflated targets, there will be more jobs lost, compounding the whole situation.

Message edited by author 2008-10-08 19:31:07.
 10/09/2008 08:26:30 AM · #304
Now another 30+ billion for AIG?

Wow.
 10/09/2008 08:34:59 AM · #305
Originally posted by dponlyme:
Originally posted by Phil:
Read this and vomit.


Unbelievable... these bastards have absolutely no conscience. Everyone who went should have their share of this deducted from their pay.


I wonder if other big companies spend lavishly on luxury vacations for their top money earners? hmm. Every company does it and it isn't going to stop because of an economic slowdown. If you don't spoil your top money earners they will run to a company that does. It's part of the business and budgeted as such. I'm sure you know that all that money spent on spa treatments, etc, is also tax deductible, right? You pay part of it.
 10/09/2008 08:42:21 AM · #306
Originally posted by Jac:
If you don't spoil your top money earners they will run to a company that does. It's part of the business and budgeted as such.


Oh no! You mean these top money earners that are running corporations into the ground would have to go to another company and run it into the ground? Say it isn't so.
 10/09/2008 08:49:51 AM · #307
Originally posted by Phil:
Originally posted by Jac:
If you don't spoil your top money earners they will run to a company that does. It's part of the business and budgeted as such.

Oh no! You mean these top money earners that are running corporations into the ground would have to go to another company and run it into the ground? Say it isn't so.

No, that would be the top money earners in AIG's healthy U.S. insurance division, NOT the financial services arm that ran the company into the ground. If one group works their butts off for business success, how much do you punish them over the failure of a separate division?
 10/09/2008 08:55:04 AM · #308
Originally posted by scalvert:
Originally posted by Phil:
Originally posted by Jac:
If you don't spoil your top money earners they will run to a company that does. It's part of the business and budgeted as such.

Oh no! You mean these top money earners that are running corporations into the ground would have to go to another company and run it into the ground? Say it isn't so.

No, that would be the top money earners in AIG's healthy U.S. insurance division, NOT the financial services arm that ran the company into the ground. If one group works their butts off for business success, how much do you punish them over the failure of a separate division?


My preference would be to "punish" them as much as the employees who also had nothing to do with the company's failure. No bonuses this year, folks. No spas. It ain't punishment, just business.
 10/09/2008 08:56:34 AM · #309
Originally posted by scalvert:
Originally posted by Phil:
Originally posted by Jac:
If you don't spoil your top money earners they will run to a company that does. It's part of the business and budgeted as such.

Oh no! You mean these top money earners that are running corporations into the ground would have to go to another company and run it into the ground? Say it isn't so.

No, that would be the top money earners in AIG's healthy U.S. insurance division, NOT the financial services arm that ran the company into the ground. If one group works their butts off for business success, how much do you punish them over the failure of a separate division?


Not giving these people a half million dollar trip to a spa after you've borrowed 80 billion from the taxpayers is a punishment? Seriously?
 10/09/2008 09:00:43 AM · #310
Originally posted by posthumous:
My preference would be to "punish" them as much as the employees who also had nothing to do with the company's failure. No bonuses this year, folks. No spas. It ain't punishment, just business.

So if Benjamin Moore or Dairy Queen had a banner year, you would tell the employees they get no bonuses because Geico did really lousy? They're all part of Berkshire Hathaway. From a business perspective, do you think the profitable people will try as hard next year?
 10/09/2008 09:01:46 AM · #311
Originally posted by Phil:
Not giving these people a half million dollar trip to a spa after you've borrowed 80 billion from the taxpayers is a punishment? Seriously?

Different people. The insurance division didn't borrow a nickel.
 10/09/2008 09:15:22 AM · #312
Originally posted by scalvert:
Originally posted by Phil:
Not giving these people a half million dollar trip to a spa after you've borrowed 80 billion from the taxpayers is a punishment? Seriously?

Different people. The insurance division didn't borrow a nickel.


Did the people who work the insurance division get paychecks?
 10/09/2008 09:26:19 AM · #313
Originally posted by Phil:
Did the people who work the insurance division get paychecks?

I'm sure they got paychecks from the money their profitable division earned, and I'm equally sure 100% of them would quit if they didn't... leaving you with only the losing divisions. Now THERE'S an interesting business strategy.

Note also that events of this type are often paid for well in advance. If the executives didn't go, the half million would very likely have been wasted.

Message edited by author 2008-10-09 09:35:00.
 10/09/2008 09:50:32 AM · #314
Originally posted by scalvert:
Originally posted by Phil:
Did the people who work the insurance division get paychecks?

I'm sure they got paychecks from the money their profitable division earned, and I'm equally sure 100% of them would quit if they didn't... leaving you with only the losing divisions. Now THERE'S an interesting business strategy.


So payment for services rendered isn't enough anymore? Now we are forced to give ridiculous trips to those who can afford to pay for them themselves?

I worked for AIG's insurance division up until March of this year and we were paid well because we performed well. Bonuses are included in EVERY PAYCHECK if you perform. Just keep old business on the books and write a certain amount of new business each week and there is a lot of money to be made in "bonuses" (paychecks). Trips like these are to the executives who did nothing more than hold meetings where they PUBLICLY praise those who had great sales this week and chastise those who didn't. Not bitter, just fact and common knowledge. Of course, there are incentive trips to the grunts who sell sell sell but they are hardly as extravagant/expensive and you'd be hard pressed to find 10% of those attending are honest and have the clients best interest at heart - but that's another story altogether.

When I was there, the biggest selling point was that you were AIG - the largest financial services corporation in the world. Not as easy to sell on that point anymore when your stock was 70 bucks a year ago and 3 now. They don't seperate the two in the market.

Message edited by author 2008-10-09 10:35:20.
 10/09/2008 10:02:01 AM · #315
Originally posted by scalvert:

Note also that events of this type are often paid for well in advance. If the executives didn't go, the half million would very likely have been wasted.


There are also policies allowing for cancellation.

Also, nearly $25K was for spa treatments like facials, massages pedicures, suanas etc. Things that were certainly not paid for in advance.
 10/09/2008 10:06:35 AM · #316
And after "chastising" them, now the government is going to give AIG some more money. Damn, i bet my kids wished i used that strategy when they got in trouble...
 10/09/2008 12:00:23 PM · #317
Originally posted by posthumous:
Originally posted by scalvert:
Originally posted by Phil:
Originally posted by Jac:
If you don't spoil your top money earners they will run to a company that does. It's part of the business and budgeted as such.

Oh no! You mean these top money earners that are running corporations into the ground would have to go to another company and run it into the ground? Say it isn't so.

No, that would be the top money earners in AIG's healthy U.S. insurance division, NOT the financial services arm that ran the company into the ground. If one group works their butts off for business success, how much do you punish them over the failure of a separate division?


My preference would be to "punish" them as much as the employees who also had nothing to do with the company's failure. No bonuses this year, folks. No spas. It ain't punishment, just business.


I dont know if you read one of my earlier posts, but after part of a company got sold and we lost some colleagues (I am a witness), the executives organized a grand yacht party.:-)
 10/09/2008 12:02:41 PM · #318
Originally posted by Prash:
Originally posted by posthumous:
My preference would be to "punish" them as much as the employees who also had nothing to do with the company's failure. No bonuses this year, folks. No spas. It ain't punishment, just business.


I dont know if you read one of my earlier posts, but after part of a company got sold and we lost some colleagues (I am a witness), the executives organized a grand yacht party.:-)


Unfortunately, my preferences seem to do little to shape economic policy... :(

Message edited by L2 - Continue here.
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