Sunday, March 29, 2009

AIG Trader Writes Letter

Jake DeSantis explaining why he feels entitled to a $740K bonus (after tax!) rings a bit hollow. This article takes it apart pretty well. Basically he tells DeSantis:

1) There are only 400 employees in the AIGFP, with two offices. The statement you knew nothing rings hollow, because with that much money flying around, people talk about how it was made ($3.5B in last 7 years doled out to those 400 employees).
2) If you did know nothing, there is no reason to pay you $1MM to unwind these complex deals, which is supposedly why you are getting the big bonus.
3) You analogize that your plumbing work was ruined by an electrician that burned the house down. The plumber should still get paid. Not if they work for the same company.

I wish the government just let them fail, and we could avoid this. A capitalist can't whine about government messing with the free market when he is getting a bail out. Further, the AIG contagion effect is based on a domino theory that I do not buy. If you take out a bookie, don't be scared by notional obligations because the cancel out.

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