House sets up vote today on taxing AIG bonuses

[ReardenSteel]

Thanks to the transfer of power the Do-Nothing Congress has become the Do the Most Damage Congress.
I liked the former better.

Right. Wow. That Obama lie that those who opposed him prefered to do "nothing" seems to be making his fictional opponents much smarter than the POTUS himself.

 

[Hawkgirl]

These bonuses are like the icing on a cake.

I like my analogy better.

[Hawkgirl]

much smarter than the POTUS himself.

 

My 17 year old calico is smarter than the POTUS 

[Duke Nukum]

Maybe Hawkgirl is right.  Wouldn't it give them greater loses every quarter thus more money from the taxpayer?

My understanding is mark-to-market is what led to the greater losses because of how the toxic assets have to be reported since Enron.  My simplistic understanding is under the old pre-Enron rules, a toxic asset might have no value today but 5 years down the line it could be profitable but under the post-Enron rules the assets have to be reported under their current market value.  If the economy is doing well, the post-Enron rules don't hurt as much but once the housing bubble burst those assets became instantly worthless and caused the balance sheets of the financial institutions that hold them to crater which caused a huge sell off of their stocks which led to a devaluing of people's 401K's.

Other than changing the accounting rules, eliminating the capital gains tax for a while could get money flowing into the market again but right now we have seen fit to elect the exact people who hate tax cuts into office.

[Hawkgirl]

There's lots of toxic ass in Congress.

Sorry, I just wanted to use that term.

[debk]

Duke, I think you are right on all counts.  I also think that what people are pissed about is NOT necessarily bonuses but the bailout in general.  MSM has ginned up the bonuses but the tea parties were going on before this occurred.  In one sense, it might have helped as it may get more people out and about regarding the spending that is going on out-of-control in Washington.  

I think Hawkgirl is correct in that the bonuses were predominately paid to the complex instrument unit (toxic assets) and if I am not mistaken also to foreign workers (seems to me in London).   Still, since it was in the Porkulus Bill to pay the bonuses they should be paid.  I want to know what they are gonna do with the toxic assets that keep sucking the funds.  Oh, never mind FASB/SEC will change mark-to-market to mark-to-magic and that will solve it.  

Some of the money AIG paid out was to Deutsche Bank ....which is making a lot of people angry because it's a German bank.

Deutsche is the trustee for the registered holders of Equifirst Mortgage Loan Trust, AIG insures the mortgages.

I have done several foreclosures here held by Deutsche. Equifirst is one of those companies that buys bundled mortgages from independent mortgage companies.

[Black Swan]

My understanding is mark-to-market is what led to the greater losses because of how the toxic assets have to be reported since Enron.  My simplistic understanding is under the old pre-Enron rules, a toxic asset might have no value today but 5 years down the line it could be profitable but under the post-Enron rules the assets have to be reported under their current market value.  If the economy is doing well, the post-Enron rules don't hurt as much but once the housing bubble burst those assets became instantly worthless and caused the balance sheets of the financial institutions that hold them to crater which caused a huge sell off of their stocks which led to a devaluing of people's 401K's.

Other than changing the accounting rules, eliminating the capital gains tax for a while could get money flowing into the market again but right now we have seen fit to elect the exact people who hate tax cuts into office.

Well, yea, that is how I understand them also.  If I were going to invest in a bank wouldn't you want to know what the value of their holdings is?  If some of their assets are valued to fantasy or off the books then who can believe they are solvent.  These institutions didn't even believe each other.  This is the reason I understood that they did not loan money.  They didn't have it to loan and they didn't trust those who they could loan to.  What was given to them plugged a hole that keeps returning every quarter.  Naturally, there is gonna be a sell off if you don't think there will be any payoff.  I don't know what triggered the 401K's but they surely had these toxic assets mixed in their portfolios and lost based on that.  

Until the toxic assets are dealt with we are just spinning wheels I believe and I don't believe Mark-to-Market should be changed.  Rather than do that I would like to see those who promoted and dealt in the CDS and those bet (unregulated) instruments that were created and sold as AAA called what they really were.  Deceptive and fraudulent and those responsible dealt with accordingly.  Including the rating agencies.  

This is where the real scandal lies IMO.        

[Black Swan]

There's lots of toxic ass in Congress.

Sorry, I just wanted to use that term.