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Ungrateful Corporation Slaps Government

royalpaladin
Posts: 22,357
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1/8/2013 8:37:29 PM
Posted: 3 years ago
AIG sues the government for bailing it out and claims the deal that it got a raw, unconstitutional deal when it took taxpayer money to cover itself.
thett3
Posts: 14,334
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1/8/2013 8:40:28 PM
Posted: 3 years ago
wait seriously? Lol that's ridiculously unethical if this is true
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Ore_Ele
Posts: 25,980
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1/8/2013 9:12:53 PM
Posted: 3 years ago
thinking of doing =/= actually doing

They are thinking of suing, which on the grounds that they mentioned, would easily fail.
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1Percenter
Posts: 781
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1/9/2013 1:32:25 AM
Posted: 3 years ago
HA! That's what the government gets for being big!

If only the money from the case came from the politician's wallets rather than the taxpayers.
lewis20
Posts: 5,093
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1/9/2013 3:31:30 PM
Posted: 3 years ago
I'll take any reason to stop corporate welfare. The bank is ungrateful? Haha sure why not.
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DanT
Posts: 5,693
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1/9/2013 4:08:04 PM
Posted: 3 years ago
"'The lawsuit does not argue that government help was not needed,' The New York Times reports. 'It contends that the onerous nature of the rescue -- the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients -- deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for 'public use, without just compensation.'"

In other words, they didn't just bail them out, they took over the company, imposed unrealistic interest rates, and stole from their shareholders.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
DanT
Posts: 5,693
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1/9/2013 4:11:43 PM
Posted: 3 years ago
At 1/9/2013 4:08:04 PM, DanT wrote:
"'The lawsuit does not argue that government help was not needed,' The New York Times reports. 'It contends that the onerous nature of the rescue -- the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients -- deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for 'public use, without just compensation.'"

In other words, they didn't just bail them out, they took over the company, imposed unrealistic interest rates, and stole from their shareholders.

If a private bank did this, the public and the media would be up in arms. The bank would be boycotted, and would go under. Since it was the nanny state, everyone seems to be OK with it, and instead blames the Trojans for accepting the "gift horse".
"Chemical weapons are no different than any other types of weapons."~Lordknukle
DanT
Posts: 5,693
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1/9/2013 6:13:22 PM
Posted: 3 years ago
At 1/9/2013 6:11:26 PM, jimtimmy wrote:
Hmmmm.

Maybe if we didn't bail out AIG, this wouldnt be a problem.

Just a thought.

I never thought I would say thing, but I agree with jimtimmy. *pigs sprout wings, and hell freezes over*
"Chemical weapons are no different than any other types of weapons."~Lordknukle
Khaos_Mage
Posts: 23,214
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1/9/2013 6:27:44 PM
Posted: 3 years ago
At 1/9/2013 4:11:43 PM, DanT wrote:
At 1/9/2013 4:08:04 PM, DanT wrote:
"'The lawsuit does not argue that government help was not needed,' The New York Times reports. 'It contends that the onerous nature of the rescue -- the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients -- deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for 'public use, without just compensation.'"

In other words, they didn't just bail them out, they took over the company, imposed unrealistic interest rates, and stole from their shareholders.

If a private bank did this, the public and the media would be up in arms. The bank would be boycotted, and would go under. Since it was the nanny state, everyone seems to be OK with it, and instead blames the Trojans for accepting the "gift horse".

Unless you can prove this is usury, I don't see the problem. AIG wanted the money bad enough to accept such a deal.

I don't see how the gov't stole from the shareholders, if the government had a controlling interest of 92%. I am assuming the "92% stake" was in shares, not bonds. If it were bonds, and the government was imposing limitation on what AIG was to do AFTER the money was lent, that is another avenue for the lawsuit.

Outside of these two scenarios, I don't see any winnable lawsuit. The assets weren't taken, they were bought/given in the deal, so the 5th amendment wouldn't apply.
My work here is, finally, done.
royalpaladin
Posts: 22,357
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1/11/2013 9:26:00 AM
Posted: 3 years ago
At 1/9/2013 4:08:04 PM, DanT wrote:
"'The lawsuit does not argue that government help was not needed,' The New York Times reports. 'It contends that the onerous nature of the rescue -- the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients -- deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for 'public use, without just compensation.'"

In other words, they didn't just bail them out, they took over the company, imposed unrealistic interest rates, and stole from their shareholders.

Ok, so? I don't see the problem. AIG accepted the deal. The government has now become the primary shareholder in the company, so the shareholders aren't being cheated out of anything.
royalpaladin
Posts: 22,357
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1/11/2013 9:26:52 AM
Posted: 3 years ago
At 1/9/2013 6:27:44 PM, Khaos_Mage wrote:
At 1/9/2013 4:11:43 PM, DanT wrote:
At 1/9/2013 4:08:04 PM, DanT wrote:
"'The lawsuit does not argue that government help was not needed,' The New York Times reports. 'It contends that the onerous nature of the rescue -- the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients -- deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for 'public use, without just compensation.'"

In other words, they didn't just bail them out, they took over the company, imposed unrealistic interest rates, and stole from their shareholders.

If a private bank did this, the public and the media would be up in arms. The bank would be boycotted, and would go under. Since it was the nanny state, everyone seems to be OK with it, and instead blames the Trojans for accepting the "gift horse".

Unless you can prove this is usury, I don't see the problem. AIG wanted the money bad enough to accept such a deal.

I don't see how the gov't stole from the shareholders, if the government had a controlling interest of 92%. I am assuming the "92% stake" was in shares, not bonds. If it were bonds, and the government was imposing limitation on what AIG was to do AFTER the money was lent, that is another avenue for the lawsuit.

No, because the company chose to accept the deal. It didn't have to, and it wasn't the state's responsibility to bail it out.
Outside of these two scenarios, I don't see any winnable lawsuit. The assets weren't taken, they were bought/given in the deal, so the 5th amendment wouldn't apply.
Khaos_Mage
Posts: 23,214
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1/11/2013 2:33:24 PM
Posted: 3 years ago
At 1/11/2013 9:26:52 AM, royalpaladin wrote:
At 1/9/2013 6:27:44 PM, Khaos_Mage wrote:
At 1/9/2013 4:11:43 PM, DanT wrote:
At 1/9/2013 4:08:04 PM, DanT wrote:

Unless you can prove this is usury, I don't see the problem. AIG wanted the money bad enough to accept such a deal.

I don't see how the gov't stole from the shareholders, if the government had a controlling interest of 92%. I am assuming the "92% stake" was in shares, not bonds. If it were bonds, and the government was imposing limitation on what AIG was to do AFTER the money was lent, that is another avenue for the lawsuit.

No, because the company chose to accept the deal. It didn't have to, and it wasn't the state's responsibility to bail it out.

No what?
Are you saying that usary loans are not illegal (e.g. loansharking)? So, a bank could charge a client 100% APR on a standard multi-year loan?

Are you saying that if you and I entered into a contract, a month later, you can change the terms? I did not know that my fixed mortgage could have all of a sudden have a higher interest rate.

It is irrelevant if someone willingly agrees to the terms, if either of these two scenarios occurred. AIG does have a legitimate lawsuit if it can prove either of these occurred, which I don't think it can.
Outside of these two scenarios, I don't see any winnable lawsuit. The assets weren't taken, they were bought/given in the deal, so the 5th amendment wouldn't apply.
My work here is, finally, done.
wrichcirw
Posts: 11,196
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1/11/2013 3:50:49 PM
Posted: 3 years ago
At 1/11/2013 9:26:00 AM, royalpaladin wrote:
At 1/9/2013 4:08:04 PM, DanT wrote:
"'The lawsuit does not argue that government help was not needed,' The New York Times reports. 'It contends that the onerous nature of the rescue -- the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients -- deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for 'public use, without just compensation.'"

In other words, they didn't just bail them out, they took over the company, imposed unrealistic interest rates, and stole from their shareholders.

Ok, so? I don't see the problem. AIG accepted the deal. The government has now become the primary shareholder in the company, so the shareholders aren't being cheated out of anything.

The shareholders were not cheated by the government directly, but by government imperatives that AIG compensate their Wall Street clients at 100% of the value of the failed derivatives that took AIG down in the first place. (see bolded). This funneling of assets was done at the expense of shareholders - the government could have easily demanded that AIG compensate Wall Street at 50%, or even 20% of the value of the derivatives and by doing so put AIG on a better footing, but they didn't.

AIG can sue anyone it wants to sue. It's apparently not suing about the bailout, but rather about specific aspects of the bailout. No question that if the government hadn't stepped in, something far worse than 2008 would have happened, or so we are led to believe.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
OMGJustinBieber
Posts: 3,484
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1/11/2013 3:51:10 PM
Posted: 3 years ago
They are either rational or not-human, there is however no middle ground. 4 and 5 year olds are typically rational beings who are capable of decisions

I want you to read that last part again:4 and 5 year olds are typically rational beings who are capable of decisions. The part I object to isn't that they're capable of making decisions, as rationality doesn't concern the ability to simply make decisions as much as the ability to basically just make sense of things. Yes, there's a kind of dogmatism to that concept, and if you honestly think 4 and 5 year olds are rational beings then you probably need a little more experience on this front. Do you actually know any 4 or 5 year olds? Have you ever known 4 or 5 year olds? You know they'll believe mostly anything you tell them?
wrichcirw
Posts: 11,196
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1/11/2013 3:56:40 PM
Posted: 3 years ago
At 1/11/2013 3:50:49 PM, wrichcirw wrote:
At 1/9/2013 4:08:04 PM, DanT wrote:
"'The lawsuit does not argue that government help was not needed,' The New York Times reports. 'It contends that the onerous nature of the rescue -- the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients -- deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for 'public use, without just compensation.'"

In other words, they didn't just bail them out, they took over the company, imposed unrealistic interest rates, and stole from their shareholders.

The shareholders were not cheated by the government directly, but by government imperatives that AIG compensate their Wall Street clients at 100% of the value of the failed derivatives that took AIG down in the first place. (see bolded). This funneling of assets was done at the expense of shareholders - the government could have easily demanded that AIG compensate Wall Street at 50%, or even 20% of the value of the derivatives and by doing so put AIG on a better footing, but they didn't.

AIG can sue anyone it wants to sue. It's apparently not suing about the bailout, but rather about specific aspects of the bailout. No question that if the government hadn't stepped in, something far worse than 2008 would have happened, or so we are led to believe.

From a link in the article:

The report concludes that the Federal Reserve Board"s intimate relations with the leading powers of Wall Street"the same banks that benefited most from the government"s massive bailout"influenced its strategic decisions on AIG. The panel accuses the Fed and the Treasury Department of brushing aside alternative approaches that would have saved tens of billions in public funds by making these same banks "share the pain."

Bailing out AIG effectively meant rescuing Goldman Sachs, Morgan Stanley, Bank of America and Merrill Lynch (as well as a dozens of European banks) from huge losses. Those financial institutions played the derivatives game with AIG, the esoteric practice of placing financial bets on future events. AIG lost its bets, which led to its collapse. But other gamblers"the counterparties in AIG"s derivative deals"were made whole on their bets, paid off 100 cents on the dollar. Taxpayers got stuck with the bill.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
RoyLatham
Posts: 4,488
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1/12/2013 12:43:08 PM
Posted: 3 years ago
At 1/11/2013 9:26:00 AM, royalpaladin wrote:
Ok, so? I don't see the problem. AIG accepted the deal. The government has now become the primary shareholder in the company, so the shareholders aren't being cheated out of anything.

The government should not have bailed out AIG. Instead they should have gone into bankruptcy, and under court supervision the insurance part of the company (which was always profitable) used to pay off the debts. However, the government really forced the bailout on government terms.

Let me make an extreme analogy. Your house catches on fire and the fire department arrives and offers a deal, "We'll save your children, but it's going to cost you big time ... sign here." You agree, but there is no practical alternative. I don't know if AIG was really forced to take a very bad deal, but that's the argument.

The AIG board refused to join Greenberg's lawsuit. For the company the bad publicity could not be worth the amount recovered.

In the bailout, the government used a lot of force. They forced Bank of America to buy Countrywide Financial, and now the government is suing B of A for the illegal lending practices made by Countrywide before the buyout. If countrywide had been allowed to go bankrupt, the government would have been stuck paying for the bad loans.
Ore_Ele
Posts: 25,980
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1/12/2013 3:06:42 PM
Posted: 3 years ago
At 1/11/2013 2:33:24 PM, Khaos_Mage wrote:
At 1/11/2013 9:26:52 AM, royalpaladin wrote:
At 1/9/2013 6:27:44 PM, Khaos_Mage wrote:
At 1/9/2013 4:11:43 PM, DanT wrote:
At 1/9/2013 4:08:04 PM, DanT wrote:

Unless you can prove this is usury, I don't see the problem. AIG wanted the money bad enough to accept such a deal.

I don't see how the gov't stole from the shareholders, if the government had a controlling interest of 92%. I am assuming the "92% stake" was in shares, not bonds. If it were bonds, and the government was imposing limitation on what AIG was to do AFTER the money was lent, that is another avenue for the lawsuit.

No, because the company chose to accept the deal. It didn't have to, and it wasn't the state's responsibility to bail it out.

No what?
Are you saying that usary loans are not illegal (e.g. loansharking)? So, a bank could charge a client 100% APR on a standard multi-year loan?

Are you saying that if you and I entered into a contract, a month later, you can change the terms? I did not know that my fixed mortgage could have all of a sudden have a higher interest rate.

Your fixed rate can't, but if you signed up for an ARM then the fact that it can change is in the contract.

Of course, if the government is the 92% shareholder (though it is actually just 80%, but that doesn't really matter), then the company DOES agree to any changes because the company's will is the sum of the shareholders, period.


It is irrelevant if someone willingly agrees to the terms, if either of these two scenarios occurred. AIG does have a legitimate lawsuit if it can prove either of these occurred, which I don't think it can.
Outside of these two scenarios, I don't see any winnable lawsuit. The assets weren't taken, they were bought/given in the deal, so the 5th amendment wouldn't apply.
"Wanting Red Rhino Pill to have gender"
Khaos_Mage
Posts: 23,214
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1/12/2013 4:27:30 PM
Posted: 3 years ago
At 1/12/2013 3:06:42 PM, Ore_Ele wrote:
At 1/11/2013 2:33:24 PM, Khaos_Mage wrote:
At 1/11/2013 9:26:52 AM, royalpaladin wrote:
At 1/9/2013 6:27:44 PM, Khaos_Mage wrote:
At 1/9/2013 4:11:43 PM, DanT wrote:
At 1/9/2013 4:08:04 PM, DanT wrote:

Unless you can prove this is usury, I don't see the problem. AIG wanted the money bad enough to accept such a deal.

I don't see how the gov't stole from the shareholders, if the government had a controlling interest of 92%. I am assuming the "92% stake" was in shares, not bonds. If it were bonds, and the government was imposing limitation on what AIG was to do AFTER the money was lent, that is another avenue for the lawsuit.

No, because the company chose to accept the deal. It didn't have to, and it wasn't the state's responsibility to bail it out.

No what?
Are you saying that usary loans are not illegal (e.g. loansharking)? So, a bank could charge a client 100% APR on a standard multi-year loan?

Are you saying that if you and I entered into a contract, a month later, you can change the terms? I did not know that my fixed mortgage could have all of a sudden have a higher interest rate.

Your fixed rate can't, but if you signed up for an ARM then the fact that it can change is in the contract.

I know this. That is I agreed to a fixed rate, and they changed it, I could sue them, just like if the gov't changed its terms with AIG.

Of course, if the government is the 92% shareholder (though it is actually just 80%, but that doesn't really matter), then the company DOES agree to any changes because the company's will is the sum of the shareholders, period.

True, so the question becomes what changes occured and if they are something general stockholders can normally enforce. Saying no bonuses for upper management is okay, but not using this majority to engage in "detrimental" action to the company, like voting to accept new money with more stingent strings attached, when the lender is the majority shareholder (conflict of interest). We are also assuming those shares the gov't owned had voting rights.


It is irrelevant if someone willingly agrees to the terms, if either of these two scenarios occurred. AIG does have a legitimate lawsuit if it can prove either of these occurred, which I don't think it can.
Outside of these two scenarios, I don't see any winnable lawsuit. The assets weren't taken, they were bought/given in the deal, so the 5th amendment wouldn't apply.
My work here is, finally, done.