http://www.youtube.com/watch?v=A9xuyB5mWdA
If you spent anytime watching the NFL playoffs on the old TV box over the weekend, it’s likely that you came across AIG’s not-terribly-subtle and entirely self-congratulatory commercials touting both their work in recent disasters and gratitude towards the American public and the federal government that bailed the firm out during the 2008 crash. This being America, home of freedom, capitalism and blind plutocratic entitlement, that’s not all AIG was up to the last few days.
To anyone who’s witnessed even a shred of the Wall Street avarice that has put the country (and frankly, the world) into what history will likely recall as a depression, it should come as absolutely no surprise that insurance giant AIG ‘seriously considered’ joining a lawsuit launched by former CEO Hank Greenberg against the United States government. That would be the same government that stepped into the breach to hand AIG $182 billion to pull its floundering backside out of the fire when the entirety of the private capital market had dried up. Ultimately, AIG passed on the lawsuit late Wednesday night, buckling as much to public pressure as to what one would hope amounts to common sense.
Nevertheless, grizzled hate-skeleton Hank Greenberg will continue with his lawsuit against the US government, which claims that the New York Fed charged an ‘unreasonable interest rate’ on its initial loan. Fortunately for the old bag, Greenberg has at least one person who thinks that the lawsuit isn’t necessarily a bad thing. From the Yahoo! Finance blog of Matt Nesto:
Ultimately, the suit will proceed and could even succeed, which is not necessarily a bad thing given the speed at which things were handled and the almost arbitrary manner in which certain assets were seized and sold — or the price at which contracts were settled.
One assumes that Matt Nesto would advocate suing the firefighter who pulls your mother out of a burning building for the bump on the head she received on the way out the door, because he/she should have moved a little more carefully.
Also getting a little further out from under the thumb of the terrible, no good US Government that bailed its sorry ass out is terrible financial institution Bank of (fuck you) America. Settling out for over $10B for bad deals made in part by Countrywide, which the bank purchased prior to the meltdown, BofA cleared its balance sheet for 2013 as it looks to spike its stock price, which, because of freedom, is all that matters. Bank of America is joined by a number of other banks in settling up with the government for bad deals and the like over the past two weeks, with some of the money earmarked to, in theory, help homeowners adversely affected by the spate of robo-signing during the worst of the foreclosure crisis in 2009 and 2010.
Fortunately for the big banks, there is little on the horizon to indicate that their dominance in the market will wane as they leave the financial crisis in the rearview. Emerging relatively unscathed, and only moderately encumbered by Dodd-Frank, they forge on, knowing that, when they bankrupt the world again, the consequences will be minor. It feels somewhat like the financial equivalent of handing Jeffrey Dahmer a pocket full of roofies and turning him loose in Boystown, Chicago on New Years Eve, with a pat on the head and a reminder to behave himself.
Fortunately, there are good soldiers in this fight, looking to help foreclosure victims and the communities ravaged by the Great Recession in ways the federal government is both too monolithic and too bought and paid for to investigate. In California, an old venture capitalist by the name of Steven Gluckstern is pitching the idea of helping towns use eminent domain to alleviate the damage being done by the mortgage and foreclosure crisis:
It (Gluckstern’s firm) would arrange the funding for these eminent-domain purchases and then help a city like Merced reduce the loans’ principal and resell them to new investors, who’d cover the city’s costs and MRP’s brokerage fee. In this scenario, Gluckstern calculates that a family in Merced that bought a $300,000 house that’s now worth $100,000 (a common situation here) would see its monthly payments decrease from $800 to $300.
Helping a community and turning a buck? Sounds like someone doesn’t understand the true meaning of capitalism.
