Sickening spinelessness by Obama. Absolutely sickening.
This nonense that these bonus's can't be stopped is an insult to Americans.
Enough already. Nationalize and fire.

But using "every legal avenue" to recoup the money may not be enough, as AIG's lawyers have already advised the company that it's legally obligated to pay out the bonuses. And Obama said that Geithner would continue "to resolve this matter with the new CEO, Edward Liddy," who has already made it pretty clear that he wants the bonuses paid.

That's the thing about "every legal avenue". It means that the Justice Department can figure out a different legal theory than what the AIG lawyers are claiming. Litigation and settlement - that's what it's all about - not taking the AIG lawyers's word for what's legal.

Geithner and Summers look worse with every passing day. Probably Obama's worst picks so far.

Look, I love Obama and in general am very happy with his performance to date, with the sole disappointment being the financial bailout and his decision to put Summers and Geithner in charge of economic policy.

With 80 percent of the stock, we own this frigging company. We're in charge. We don't beg, plead and cajole, we order. Why Geithner can't bring himself to do that is beyond me. Why Obama isn't demanding it is disappointing.

As the owners of the company, we hire new lawyers and have them do a review. And then, we can just jolly well hold off on disbursing any more filthy lucre to AIG until they "reorient" their expectations. If their employees want to sue, let them.

Let's use the leverage of exposure as well: Publish the names of AIG bonus takers - It's extortion!

Josh had it right this morning.

In all of these various bailouts

in addition to picking up the tab we're being played for fools

I think the big mistake from the Obama Administration it seems is they fully miscalculated the public pulse and anger on the issue of AIG bonuses.

Let them sue!! Let them take the government to court. Let them. I'd love to see them in court. Publicly humiliate them. Make it cost them a ton in legal fees. Tie them in knots for years. Americans need a good show trial.

Make my day. Go to court. And if the trial exposes a bunch of politicians in the process all the better.

Look on the bright side people. Now you know. Know what, you ask?

Now you can begin to understand the perversion that runs through so-called high finance. These men are little more than thieves in nice suits.

An entire culture has come up getting us to believe that to work on wall street was to be blessed, that it showed you had a certain kind of acumen.

It is little more than a casino. An these guy will take their money any way they can get it and they simply do not care about your outrage.

Am I getting this right? Some of you are defending this weak response from the Obama administration?

As was pointed out at Glenn Greenwald's blog so effectively, as a CONDITION of the bail-out money, the automakers had to change their contracts with the unions. But, they can't do the same with AIG? The automakers aren't responsible for what happened here, they're one of many victims, and the people who have a substantial role in this crisis have contracts that are sacrosanct?

Fuck that.

At this point they might as well seize AIG, sell off the pieces to private investors, and void all credit default swaps. Instead of the CDS, we are already dealing with banks that are the counterparties -- at least in the US. Foreign banks, like Deutsche Bank, can get bailed out by Germany (irresponsible slacker/scofflaw that is is on stimulus issues) or UBS by Switzerland (harborer of US tax cheats).

Seize AIG, take it apart and sell it, and FIRE EVERY SINGLE ASSHOLE THAT WORKS THERE.

The ONLY realistic, as opposed to otherwordly solution - STOP GIVING AIG MONEY

Damn, I guess it's too late for a signing statement.

Public outrage is needed to build the kind of steam we need to pass real financial reform. No major reform happens without outrage strong enough to sweep aside entrenched interests. So the outrage is not without a larger purpose here.

One option might be a formal bankruptcy filing, which as a creditor the government could initiate. I am not a BR expert, but it might be an option because once in bankruptcy, the bankrupt entity can elect to continue or reject all contracts, presumably including the employment agreements at issue here with respect to the bonuses. Although it seems that the "right" to the bonuses may have already accrued, that "right" can be contested in bankruptcy court (with useful theories like equitable estoppel and equitable subbordination) and even if that fight is lost, the only thing that the employees would have are claims as unsecured creditors which I believe are very low priority claims (though I don't know if employees have preferred status or, if so, whether bonuses (as opposed to straight salary) would be given preferred status. There would appear to be little chance that unsecured claims would be paid out at all, given the debt at issue here and the amount of assets available to AIG to try to pay those debts. Of course, all the banks would also presumably be unsecured creditors to the extent they hold CDS papers, and that presents its own problems, but given the US government's position as a significant owner of AIG, perhaps the goverment could work out a restructuring deal where it bought out the banks' claims under the CDS agreements (at a fraction of their worth) and then crammed down a reorg plan on the bonus-claiming employees under which those employees got next to nothing. You could break up AIG and sell off the worthwhile parts while you were at it. Of course, this might not work at all -- need a BR atty to weigh in.

Ya know, its funny how everybody was all about "rule of law" when Bush was ignoring laws he didn't like. There was lots of hollering and shouting about it, here and all over the place. I did a lot of it myself.

In fact, when I googled "talkingpointsmemo" and "rule of law" I got 56,000 hits.

Now, however, when faced with the prosepct that Obama will yield to the rules of contract law, we're suddenly seeing a different perspective? AIG's Financial Products Division are really, really bad people who did us great harm, evildoers, if you will, so now we want to set up special legal rules, just for them and just for this one situation? Special rules for them that are different from the rules applicable to our own employment agreements and we're all okay with that because, once that precedent is set, we're absolutely confident that no one will ever come along who will use those special emergency rules against us?

Is that really what all you angry people (yes, Josh included) are saying?

"Rule of law" means just that: that the law, not men making shit up as the go based upon the exigencies and passions of the moment, rules and rules everyone. Sometimes, that means having to accept results you don't like--like, say, letting a murderer walk, or trying terrorists in open court according to the established rules, or letting some reckless sociopath in London get a bonus for helping to wreck the world's economy.

If you're a mature citizen of a democracy, you accept the occaisional awful, and even potentially dangerous, unjust outcome, not because those are good things, but because the alternative is a steep slippery slope with tyranny at its foot.

What breach would that be? These guys did exactly what the people above them paid them to do. The board of directors, the senior management and, yes, the United States Treasury Department and Federal Reserve knew they exploiting a gap in the regulatory environment by trading derivatives without setting aside adequate--or any--reserves. Until the dominoes started tumbling, they all thought that was just dandy.