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Rescued by a Bailout, A.I.G. May Sue Its Savior

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81–90 of 99 posts

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#81
post #69

Earlier quoted context omitted.

I'd like to see them try and prove they were taken advantage of by referencing their own incompetence. "Your honor, the defence claims that we were sophisticated investors but look at what we did. Are these the acts of a sophisticated man who knows what he's doing?"

You are glossing over the fact that the current board of directors are not the same people who got the company into trouble in 2008. They are the ones who turned the company around. They also have the same mandate as the board of any other publicly traded company: maximize value for the shareholders.

  They also have the same mandate as the board of any other publicly traded company: maximize value for the shareholders.
This is wrong.

http://blogs.law.harvard.edu/corpgov/2012/06/26/the-sharehol...

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#82
post #69

Earlier quoted context omitted.

I'd like to see them try and prove they were taken advantage of by referencing their own incompetence. "Your honor, the defence claims that we were sophisticated investors but look at what we did. Are these the acts of a sophisticated man who knows what he's doing?"

You are glossing over the fact that the current board of directors are not the same people who got the company into trouble in 2008. They are the ones who turned the company around. They also have the same mandate as the board of any other publicly traded company: maximize value for the shareholders.

>You are glossing over the fact that the current board of directors are not the same people who got the company into trouble in 2008.

That doesn't bear on whether they could (jokingly obv.) claim to be an unsophisticated victim of predatory lending, only the board at the time matters for that.

The board can run the company the way they want, barring gross misconduct or fraud, the shareholders had their say at the AGM.

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#83
post #7

Earlier quoted context omitted.

I agree with the emotion but I can also see the argument that the agreement was made under duress. If you are about to die and the only person who could save you, offers to do so, but asks you to agree to something reprehensible in exchange for saving you, what do you do? At the risk of creating a strawman (the goal is illustration not substitution) let us construct a scenario, you're hanging by a rope which is break…

You are being extremely disingenuous. You are equating the dead of a person with the dead of a company. By doing this you are biasing the argument in your favor because people know is bad to let people die. All in all I cannot take your argument seriously if you do stuff like that. You are apealling to emotion rather than reason.

Time to have some serious, un-edited conversation here folks.

The comments around this question have been really interesting to watch. But the underlying subtext of corporations 'good' vs 'bad' and the level of seriousness it entails when they are dissolved is even more amazing.

First off, on a discussion group that is pretty much focused on creating innovation through technology, the concept of corporations is pretty much fundamental. If you hate corporations and everything they stand for then starting one should be the last thing on your mind. Further helping other people create theirs should also be pretty low on your list. Without the existence of these collectives there is no framework for seed rounds, 'happy exits', or IPOs. There is no 'acqui-hire' and no structure in which to build a vision that is greater than yourself.

But the second bit that must be understood is that "corporations" are composed of people, just as a marriage is composed of people. These companies are things that people invest time, emotion, and money into to further their goals. When they fail, people feel badly, sometimes really badly about that.

If you decide to live in the community of people who build companies from the ground up, or work to make them great, then someone you know personally will commit suicide when they come to the realization that their company has failed and they could have prevented it. I know it is hard to imagine this as a young person who has yet to face their own mortality in any serious way, but please try to understand this scenario.

You have been working with folks for 3, 4, 5, or maybe 10 years on building something together. Imagine someone you knew in 6th grade is is now graduating with you in college. There are challenges that you don't think you can overcome, personal hardships that you weather together, shared victories you've achieved. You've shared in people making progress toward their life goals, perhaps they have saved up enough to buy their first house, maybe their kids have made it into an Ivy League college, maybe their kids have married your kids. And now, all of this and more is going to be destroyed. These people, these friends and colleagues, are going to have their lives turned upside down, and some more than others. Some will lose their houses, their kids will be told they have to come home because there is no money for school, reputations will be smeared, and good people who did nothing but great work will be villified by a public which has been fed information in a way that creates the most rage and the least understanding.

If you, latinohere, or anyone else reading this, ever get the "opportunity" to be standing at that abyss and look into it, you may feel that your own death is actually preferable than having to live with that. Sadly I know friends who decided it wasn't worth it and they ended their own lives rather than live with the knowledge they had led people into a place that turned out not as they had hoped. And in that moment, that moment of decision, do you take this "deal" which converts a bad outcome to a slightly less bad outcome. it really comes down to people living and dying. Corporation or not, real people who have to live with themselves the day after and the day after that.

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#84
post #47

Earlier quoted context omitted.

Rolling Stone has a huge anti-bank bias. The material they present is usually misleading, out of context and often plain wrong or mis-informed. This is absolutely not a credible source on the financial crisis. Indeed Matt Taibbi is basically just a troll.

It would help your argument if you cite misleading, plain wrong, out of context or misinformed parts of the article to make your point.

Sure. But I have a day job and no time to put together critical analyses of random stuff on the internet. Plus I don't really care what other people chose to believe.

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#85

Earlier quoted context omitted.

You are being extremely disingenuous. You are equating the dead of a person with the dead of a company. By doing this you are biasing the argument in your favor because people know is bad to let people die. All in all I cannot take your argument seriously if you do stuff like that. You are apealling to emotion rather than reason.

Time to have some serious, un-edited conversation here folks. The comments around this question have been really interesting to watch. But the underlying subtext of corporations 'good' vs 'bad' and the level of seriousness it entails when they are dissolved is even more amazing. First off, on a discussion group that is pretty much focused on creating innovation through technology, the concept of corporations is prett…

Chuck: Well said.

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#86
post #64
post #60

Earlier quoted context omitted.

Not exactly. The key thing you're missing is that AIG weren't actually the main beneficiaries of the AIG bailout, the people who bought CDSs from them were. Effectively, a bunch of other companies convinced AIG to to sell them insurance for way less than it should cost, in many cases on property they didn't actually own, by conning them as to how risky it would be. To continue the metaphor, it's like if a guy conned…

AIG isn't a company run by widows and orphans. The department that issued that insurance was full of the most stereotypical Wall Street shark assholes around, who thought they were smarter than everyone else and getting a big free payday. They got scammed in the way a casino scams the idiot wearing sunglasses at the craps table. Yes, the government bailout of AIG went towards paying off their counterparties. But thos…

By that standard you must also reject legislation that limits interest rates charged by payday loan shops? It is very much the same situation: What is a reasonable interest rate for a loan made to someone or some corporation under duress?

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#87
post #69

Earlier quoted context omitted.

You are glossing over the fact that the current board of directors are not the same people who got the company into trouble in 2008. They are the ones who turned the company around. They also have the same mandate as the board of any other publicly traded company: maximize value for the shareholders.

They also have the same mandate as the board of any other publicly traded company: maximize value for the shareholders. This is wrong. http://blogs.law.harvard.edu/corpgov/2012/06/26/the-sharehol...

Just because some professor says it is harmful doesn't mean boards don't have that as a priority.

And, the AIG CEO has publicly said his goal is to make his company as profitable as possible, and that may mean going to court.

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#88

Earlier quoted context omitted.

You are being extremely disingenuous. You are equating the dead of a person with the dead of a company. By doing this you are biasing the argument in your favor because people know is bad to let people die. All in all I cannot take your argument seriously if you do stuff like that. You are apealling to emotion rather than reason.

Time to have some serious, un-edited conversation here folks. The comments around this question have been really interesting to watch. But the underlying subtext of corporations 'good' vs 'bad' and the level of seriousness it entails when they are dissolved is even more amazing. First off, on a discussion group that is pretty much focused on creating innovation through technology, the concept of corporations is prett…

[deleted]

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#89
post #86
post #64

Earlier quoted context omitted.

AIG isn't a company run by widows and orphans. The department that issued that insurance was full of the most stereotypical Wall Street shark assholes around, who thought they were smarter than everyone else and getting a big free payday. They got scammed in the way a casino scams the idiot wearing sunglasses at the craps table. Yes, the government bailout of AIG went towards paying off their counterparties. But thos…

By that standard you must also reject legislation that limits interest rates charged by payday loan shops? It is very much the same situation: What is a reasonable interest rate for a loan made to someone or some corporation under duress?

legislation that limits interest rates charged by payday loan shops

If the government were a payday loan shop and gouging thousands of independent companies everyday, your analogy would hold water. Till then, this is merely a straw-man argument.

Re: Rescued by a Bailout, A.I.G. May Sue Its Savior

#90
post #64
post #60

Earlier quoted context omitted.

Not exactly. The key thing you're missing is that AIG weren't actually the main beneficiaries of the AIG bailout, the people who bought CDSs from them were. Effectively, a bunch of other companies convinced AIG to to sell them insurance for way less than it should cost, in many cases on property they didn't actually own, by conning them as to how risky it would be. To continue the metaphor, it's like if a guy conned…

AIG isn't a company run by widows and orphans. The department that issued that insurance was full of the most stereotypical Wall Street shark assholes around, who thought they were smarter than everyone else and getting a big free payday. They got scammed in the way a casino scams the idiot wearing sunglasses at the craps table. Yes, the government bailout of AIG went towards paying off their counterparties. But thos…

Guess who owned most of the AIG shares that were diluted as part of the Government bailout, though? It certainly wasn't the guys that were running the shop - it was your pension scheme, and everyone else's pension scheme.

Also, I got my analogy wrong. It would be more like if the Government seized 92% of your house in exchange for loaning you the money to pay off the scammer with interest, which they knew you could repay.

Even after the massive swindle, AIG's problem was liquidity and not insolvency - they had enough assets to repay everyone and if they'd actually gone bankrupt, the shareholders may well have come out better in the end, but their counterparties would've been screwed because they'd have had to have waited for the bankrupcy proceedings to get paid.

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