Insurance and Credit

The Obama administration released a plan to unfreeze credit by helping struggling banks to rid themselves of bad loans through a one to two trillion dollar purchase to stimulate economic activity. The news caused in a huge stock rally, though it cooled down on as all the info released in the presidential address started to take root and settle in. The initial shock and hesitancy should wear off as the pieces start to fall in place in the Presidents plan.

The President and his administration have plans to change financial regulations including such plans as greater government regulation and even in some cases to take over financial companies who are in danger of collapsing and causing chaos throughout the entire system, such as the controversial AIG. President Obama continues to stress the importance of helping companies such as AIG in order to build the economy up and stop the bleeding. If Insurance coverage and lending cease it would destroy what is an already faltering economic system.

The nations greater needs take precedence over continuing the focus on the recent bonus scandals that have been encircling such companies. President Barack Obama has urged the Nation to turn their attention to the bigger picture rather than focus on executive bonuses. While he has demonstrated outrage over this himself, he sites continued micro-attention on it as a distraction from the crisis at hand.

Obama stated that his administration is working on all angles of this crisis as we have seen through recent task forces designed to stop just this sort of behavior. He reiterated one part of his economic plan saying that its a strategy to create jobs, to help responsible homeowners, and to restart lending. This will help grow our economy over a period of time.

The president remains positive despite the worst economic crisis we’ve faced in over 25 years, but reminds Americans with his usual directness that it will take some time. It will also take composure and it will take an understanding that when we work together, when each of us looks beyond our own short term benefits to the wider set of obligations we have to each other, thats when we shall succeed.

The Obama administration released a plan to unfreeze credit by helping struggling banks to rid themselves of bad loans through a one to two trillion dollar purchase to stimulate economic activity. The news caused in a huge stock rally, though it cooled down on as all the info released in the presidential address started to take root and settle in. The initial shock and hesitancy should wear off as the pieces start to fall in place in the Presidents plan.

The President and his administration have plans to overhaul financial regulations including such plans as greater government regulation and even in some cases to take over financial companies who are in danger of collapsing and causing havoc throughout the entire system, such as the controversial AIG. President Obama continues to stress the importance of helping companies such as AIG in order to build the economy up and stop the bleeding. If Insurance coverage and lending cease it would destroy what is an already faltering economic system.

The nations greater needs take precedence over continuing the focus on the recent bonus scandals that have been surrounding such companies. President Barack Obama has urged the Nation to turn their attention to the bigger picture rather than focus on executive bonuses. While he has shown outrage over this himself, he sites continued micro-attention on it as a distraction from the crisis at hand.

Obama stated that his administration is working on all angles of this crisis as we have seen through recent task forces designed to stop just this sort of behavior. He reiterated one part of his economic plan saying that its a strategy to create jobs, to help responsible homeowners, and to restart lending. This will help grow our economy over a period of time.

The president remains optimistic despite the worst economic crisis we’ve faced in over 25 years, but reminds Americans with his usual directness that it will take a while. It will also take diligence and it will take an understanding that when we work together, when each of us looks beyond our own short term gains to the wider set of obligations we have to each other, thats when we will succeed.

All I can say is WOW.

On Monday March 16, 2009, President Obama ordered to pursue every single legal avenue to block these bonuses to AIG Executives.

This is turning into your typical scandal now as the word is that The Treasury and Federal Reserve officials said they had known about the bonus program as far back as last fall. The program has provoked public protests from a handful of critics and at least one Democratic lawmaker in Congress ” Representative Elijah E. Cummings of Maryland, a member of the House Committee on Government Oversight, who demanded without success in December that A.I.G. provide information about the bonuses.

So essentially there is a breakdown of communication here. Some people knew about it while others claimed to not have known about it.

There was apparently a major lack of communication here. Next question is why? Was it incompetence? Possibly. If not, I really do not like the alternative. President Obama is going to have to do some investigation as to why the information flow stopped along the way. The hands off idea does not fly when the US Taxpayer is on the hook for over $170 billion.

It really surprises me that such key issues such as extraordinarily large bonus payments like this can get overlooked. In my years in the Commercial Finance Industry, I know the lengths that we go through investigating and verifying information prior to funding a deal and it really looks like there were some due diligence short comes on this venture.

Will anything happen to the individuals that were in the know, but did not do anything about these line items, as it sounds as though that is what these were laid out as. Executive bonuses of this magnitude are not line items in most peoples view; they would be better classed as extraordinary payments. So who is going to be held accountable?

Many people feel that the US Taxpayer is being played a fool in this deal and that the AIG executives are taking advantage of the situation.

Since November, A.I.G.s financial products unit has been led by Gerry Pasciucco, a former vice chairman of Morgan Stanley who was brought in by Mr. Liddy with instructions to wind down the unit. Company executives said they faced a need to keep skilled professionals in the business unit, which traded trillions of dollars worth of financial derivatives, because it would take great expertise to shut down the business in an orderly manner and without causing more turmoil.

This will be a very monumental subject to monitor over the coming weeks to see what President Obama will do with this as the President is a very fair and strong man. What will his next move be? Stay tuned for more