Wow! Faking an Outrage....

Everyone from Obama to the writers in NYT and WSJ are expressing outrage at

1. The $165 million bonus payments made by AIG to its employees...Seventy-three employees were paid more than $1 million in the latest bonuses at the insurance giant American International Group, according to the New York attorney general, Andrew M. Cuomo. Of course, the names of these people were not released. Apparently these million dollar babies had no qualms stealing money from the public.
2. The parties that got big chunks of the $180 billion bailout money that was given to AIG.
   Financial companies that received multibillion-dollar payments owed by A.I.G. include Goldman Sachs ($12.9 billion), Merrill Lynch ($6.8 billion), Bank of America ($5.2 billion), Citigroup ($2.3 billion) and Wachovia ($1.5 billion). Big foreign banks also received large sums from the rescue, including Société Générale of France and Deutsche Bank of Germany, which each received nearly $12 billion; Barclays of Britain ($8.5 billion); and UBS of Switzerland ($5 billion). A.I.G. also named the 20 largest states, starting with California, that stood to lose billions last fall because A.I.G. was holding money they had raised with bond sales. In total, A.I.G. named nearly 80 companies and municipalities that benefited most from the Fed rescue, though many more that received smaller payments were left out. WOW! A BIG SURPRISE! Hanky Panky Paulson using public taxpayer money to benefit his own stake and bail out his buddies at Goldman and other banks. Corruption at its finest! Bangladesh does not even come close.

Dirty AIG, Crazy Benny

NYT reported the grilling of Ben Chopper Bernanke by legislators. Excerpts..

The Federal Reserve Chairman, Ben S. Bernanke, told lawmakers on Tuesday that the country faces “a prolonged episode of economic stagnation” if they do not address the economic crisis forcefully, but he quickly encountered deep anger, particularly over the dealings of the ailing American International Group. Mr. Bernanke told the Senate Budget Committee that the worst outlook, should action on the crisis prove inadequate, would be “further deterioration in the fiscal situation” and probably “lower output, employment and incomes for an extended period.”....
Mr. Bernanke replied that nothing had made him more angry during the months of the sprawling financial crisis than the episode involving the insurance giant that has reported astronomical losses and has been given financial lifelines worth billions of dollars. “A.I.G. exploited a huge gap in the regulatory system,” Mr. Bernanke said. “There was no oversight of the financial products division. This was a hedge fund, basically, that was attached to a large and stable insurance company.” And this quasi-hedge fund, Mr. Bernanke went on, to nobody’s surprise, made irresponsible bets and took huge losses. “We had no choice but to try to stabilize the system because of the implications that the failure would have had for the broad economic system,” he said.

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So, it is the fault of the legislators because they created the system with the loopholes? Ben absolves himself and the fed of all blame. Ben, every one knew what was going on.

Ben also went on to support Obama's massive spending plan. Usually the bankers want the government to be fiscally sound and balanced, and not run deficits because deficit spending has consequences. However, Big Ben is playing a new tune.

The chairman of the Federal Reserve on Tuesday tacitly endorsed President Obama’s call for huge increases in spending and trillion-dollar deficits over the next couple of years, saying the economic crisis required aggressive action. Though the chairman, Ben S. Bernanke, did not endorse any of Mr. Obama’s specific proposals, he echoed the president’s call for bold government action to address the economy’s immediate travails and pointedly refused to criticize his longer-term plans. “All else equal, this is a development that all of us would have preferred to avoid,” Mr. Bernanke told the Senate Budget Committee, referring to record-breaking deficits expected this year and in the next two years. “But our economy and financial markets face extraordinary challenges, and a failure by policy makers to address these challenges in a timely way would likely be more costly in the end.”

"All American" Socialism-Style Bail-Outs

The American International Group Story, reported in the NYT.
Extracts:
The American International Group said on Monday that it lost almost $25 billion in the third quarter and had secured a new $150 billion government assistance package intended to stem the bleeding from its complex financial contracts. Originally, the Federal Reserve rushed in with an $85 billion line of credit. When that proved inadequate, the Fed added a $38 billion supplementary lending facility, and A.I.G. recently qualified to sell $21 billion of commercial paper to the Fed.The new assistance package reduces the original $85 billion loan to about $60 billion, lowers the interest rate and gives A.I.G. five years, instead of two, to pay it off. The government will also use money from its Troubled Asset Relief Program to buy $40 billion of preferred shares in A.I.G. Another important feature will be government investments of about $50 billion to create special-purpose entities to relieve the company of its most tainted assets. About $30 billion of the government money will be used to buy complex debt securities that were insured by A.I.G. and about $20 billion more will be used to buy securities backed by home loans. A.I.G.’s counterparties — financial institutions in the United States and Europe — have not borne significant losses on the financial contracts that led A.I.G. to the brink, and the new program suggests they will not. “We’re funding somebody on the other side” of A.I.G.’s derivatives contracts, said Lynn E. Turner, a former chief accountant with the Securities and Exchange Commission who has been critical of the way the insurer’s crisis has been handled. Even though a large amount of public money is being extended, neither A.I.G. nor the federal government has been willing to provide the names of the company’s biggest counterparties, or their amount of exposure. “We’ve had way too many things here that nobody knows anything about,” said Mr. Turner, who is on the Treasury’s Advisory Committee on the Auditing Profession. “That’s why no one has faith in the capital markets.”

This hand-out is rushed out to the egregious AIG managers and shareholders while hardworking folks who acted "foolishly" and did not take out the 0% down no doc loans are now paying for their "sensibility."

American Express to Be Bank Holding Company (NYT)

Extracts:
American Express, the nation’s last big independent credit card company, said late Monday that it would transform into a bank holding company to strengthen its position in the market turmoil. Federal Reserve banking regulators said they approved its application because of the “unusual and exigent circumstances” roiling financial markets and the company’s interest in tapping up to $3.8 billion in government money. As a full-fledged bank, American Express would gain greater access to the Treasury Department’s bailout plan for banks, a move that might allow it to lend more freely and perhaps acquire a larger deposit-taking institution.

Everyone who is anyone is rushing to get the loot from Helicopter Ben and his piggy bank, the Fed.

Now, to the all-important jobs situation

Circuit City Short-Circuited:

Circuit City Stores Inc. filed for bankruptcy protection Monday. It said it cut 700 more jobs at its Richmond, Va., headquarters, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.

DHL grounded

Delivery company DHL, hit by heavy losses and fierce competition, is significantly reducing its air and ground operations in the U.S. and cutting 9,500 American jobs, leaving rivals like FedEx, UPS and the U.S. Postal Service to fight over the customers it will stop serving.

Nortel Hangs-up

Canadian telecommunications equipment maker Nortel Networks Corp. posted a third-quarter loss Monday, reversing a year-ago profit as the economic turmoil and a large goodwill impairment charge weighed on results.The struggling company also announced a new round of job cuts, saying it plans to eliminate about 1,300 positions starting this year and ending in 2009.

Government Bailout helps Executives 'Retreat'

According to AP...less than a week after the federal government had to bail out American International Group Inc., the company sent executives on a $440,000 retreat to a posh California resort, lawmakers investigating the company's meltdown said Tuesday.

September consumer sales drop sharply: MasterCard

Falling behind: More Americans see utilities cut off.....The number of Americans whose electricity or natural gas has been shut off for nonpayment of their bills is up sharply in many parts of the country as people struggle with higher prices and a shaky economy.

On Education

Video Game Helps Math Students Vanquish an Archfiend: Algebra
....This fall, New York City is rolling out Dimension M — M stands for math — in 109 middle schools across the five boroughs after trying the game out in two dozen schools, including I.S. 30, last year. Like a modern twist on “Jeopardy!,” the fast-paced video game quizzes students on prealgebra and algebra topics ranging from prime numbers to fractions and complex equations. A correct answer brings 500 or more points, a wrong one as few as 25; the player with the most points wins. (No prizes, just glory.)...