jespirals: (Default)
Need a Real Sponsor here
MARCH 26, 2009

Give Back That Bonus!

Oh, and by the way, you still owe taxes on it.

So, you still work for AIG, having decided not to desert a sinking ship. For this you received a retention bonus, but the politicians have decided to make a scapegoat out of you. Last week the House passed a bill that would tax your bonus at 90%--which, since you live in high-tax New York City, means you'd end up paying more than 100% when you add up all the taxes. In McCarthyite fashion, your state attorney general, Andrew Cuomo, says he has a list of names, as the Washington Post reports:

New York Attorney General Andrew M. Cuomo had subpoenaed AIG for a list of Financial Products employees and how much money each had received.
Now, the firm's chief operating officer, Gerry Pasciucco, had set a 5 p.m. Monday deadline for staffers to indicate whether they planned to return their retention payments, and if so, what percentage. His e-mail included what appeared to be a tacit ultimatum from Cuomo.
"We have received assurances from Attorney General Cuomo that no names will be released by his office before he completes a security review which is expected to take at least a week," Pasciucco wrote."To the extent that we meet certain participation targets, it is not expected that the names would be released at all."

In light of all this, you do the right thing and give the bonus back.


That's the upshot of blogger Richard Belzer's analysis of the tax implications of giving back a bonus.

The good news is that the House bonus-confiscation bill specifically excludes "any amount if the employee irrevocably waives the employee's entitlement to such payment, or the employee returns such payment to the employer, before the close of the taxable year in which such payment is due," provided that the employee does not receive "any benefit from the employer in connection with the waiver or return of such payment."

That means you won't be taxed at 90% on the money you held only briefly. But you will be taxed. As Belzer explains:

All compensation, including the retention bonuses, received by employees for services is included in the recipient's gross income, and in determining his adjusted gross income (AGI). If a bonus recipient gives it back, does the bonus vanish from the employee's income?
No. Because the recipient was entitled to receive the amount of the bonus, and actually received it, it cannot be excluded from gross income or AGI.

This is true under existing law, irrespective of whether the House-passed bill is ever enacted. Belzer notes a couple of ways in which you may be able to reduce the tax on your relinquished bonus:

A recipient could donate all or a portion of the bonus to charity. The amount donated would be deductible on the employee's 2009 return to the extent it does not exceed 50% of his AGI (as increased by the amount of the bonus). Any excess may be carried over and deducted in the succeeding 5 years, always subject to the 50% limit.

This may work if the law doesn't change, but the House bonus-confiscation bill makes no provision for deductions, so if it becomes law, a bonus donated to charity would still be taxable at 90%. Giving the money to charity instead of returning it to AIG would also seem to constitute a refusal of Cuomo's offer you can't refuse.

Belzer continues:

Another option may be to deduct the amount of the bonus returned to the employer as an unreimbursed business expense, incurred to avoid litigation or public disparagement that could harm the employee's current or future employability. Understandably, the instructions for IRS Form 2106 do not address a situation like this, and it is entirely possible that it has never previously occurred.
Assuming that the IRS were to agree, then the employee would be able to deduct the portion of the bonus exceeding 2% of AGI (again, as increased by the amount of the bonus). The proportion of the bonus that would be deductible depends on the relative size of the bonus to total AGI. No matter the ratio, the employee's tax bill would go up in proportion to the size of the bonus even though he did not keep it.

But wait. Because you're "rich," you don't get to deduct all your deductible income:

Regardless of whether a bonus recipient donates the money to charity, or claims a deduction for the return of the bonus, if his AGI in 2009 exceeds $166,800 (if single, or married and filing a joint return), his itemized deductions (other than for medical expenses, investment interest, and certain losses) are reduced by the lesser of (1) 3% of the difference between his AGI and $166,800, or (2) 80% of his otherwise allowable itemized deductions. For many bonus recipients, this will mean that a significant portion of the bonus is not deductible.

And it's even worse than that. Belzer does not note that unreimbursed business expenses, while deductible from the ordinary income tax, are subject to the alternative minimum tax. Thus you will pay at least 26%, and probably 28%, of the bonus you no longer have in AMT.

Add it all up, and the cost of returning your bonus is somewhere north of 130%. Suddenly that 90% rate doesn't sound so bad.

jespirals: (Default)
Look who's getting the goodies

Angry about the AIG bonuses? Here's what should really disturb you.

By Allan Sloan, senior editor at large
Last Updated: March 26, 2009: 9:58 AM ET

NEW YORK (Fortune) -- To understand what Washington is actually up to, you have to watch what it does, not what it says. That's especially true when it comes to Washington's role in the ongoing bailout of Wall Street, part of its "let's hope this works" plan to revive the U.S. economy.

While Washington is setting the populist mob on the individual American International Group (AIG, Fortune 500) employees who got a total of $165 million in bonuses this year, far larger amounts of money are being quietly handed to Wall Street through programs that generate barely a peep of protest.

Let me count the ways - or at least some of them.

We'll start with the proposed public-private investment program for toxic assets. It depends heavily on a massive subsidy from the Federal Deposit Insurance Corp., which would insure the borrowings of the program's investors. The borrowings would be up to six-sevenths of the total invested; the Treasury and Wall Street (which I define as the nation's big financial institutions and money managers) would each put up half of the initial seventh.

I'm glad that taxpayers stand to get half the profits and fees because the Treasury's in the game. But the Treasury and the FDIC (whose guarantees for such huge sums are credible only because they're backed by the Treasury) run much more risk than the private investors, whose loss is limited to their investment.

The subsidy, by my back-of-the-envelope math, could be worth $18 billion a year to the Wall Street investors. That assumes that the program raises $75 billion from Wall Street and that the guarantees lower interest costs by 4% on the Street's $450 billion share of the borrowings. That's more than 100 times the AIG bonuses.

We also have the Federal Reserve Board's programs to revive the economy by offering cheap money under a dozen plans invented since the credit crunch began in earnest in the summer of 2007. They total around $1.1 trillion by my count, so a three-point saving - a very conservative number - is more than $30 billion a year.

Meanwhile, the Fed's decision to buy Treasury paper and assorted U.S. mortgage-backed securities isn't helping troubled home-owners. Rather, these purchases, designed to lower mortgage rates, benefit well-off homeowners, who can refinance at new, cheaper rates. It also boosts the market value of the tons of Treasuries and mortgage-backed securities held by Wall Street. Marginal or distressed homeowners don't qualify for cheap mortgages because lenders have toughened their credit standards.

I'm not saying, by the way, that any of these programs are necessarily bad. We have to get out of this horrible financial mess somehow, and the feds are throwing everything they have against the wall to see what sticks. But if you want to yell about taxpayer money subsidizing Wall Street, you should look at those programs, not waste time with AIG bonuses, which are symbolically important but economically meaningless.

Yes, AIG has received vast amounts of bailout money from the government. But that doesn't mean that every bonus-receiving employee is some sort of troll or incompetent who deserves to be threatened with a 90% tax or with having his address made public so that people can picket his house.

I won't even mention that this uproar in the name of preserving taxpayer money has cost taxpayers bigtime. We own 79.9% of AIG's stock and have committed $180 billion in loans and investments to it. This uproar has eviscerated our investment by destroying AIG's reputation and shredding the value of its businesses. Good luck on getting anything like our $180 billion back.

Finally, if you want a real bonus outrage, consider this: The operation getting the biggest taxpayer subsidy of all - the federal government - pays bonuses to its employees too. This year it plans to hand out about $1.6 billion of bonuses, despite running more than $1 trillion in the red.

So there you have it. While the public is focused on AIG small fry, Wall Street's big fish are getting the bulk of Washington's goodies. As always, follow the money. Not the noise.

Allan Sloan invites you to post your questions to him about Wall Street, dealmaking and the state of the financial crisis in a Fortune Talkback forum. He'll choose several questions to answer in a future online installment of his column, The Deal.

First Published: March 26, 2009: 4:03 AM ET
jespirals: (Default)
As this is getting wider circulation than originally anticipated...

For the record.

We own no houses, we rent.
Our car is 12 years old as is our TV.
We've not bought a house here because we could not afford to.
What we lost were involuntary investments in the company.
What we have is anything we kept in an ordinary savings account.

I home educate our youngest as he has Aspergers and the schools here could not provide what he needed.
I research and build early instruments and my idea of a hot designer can be found here

If it were only about money and only about me, I wouldn't care. But it was the children's education fund and 15 years of my husband's work. Even then I could say tough luck, it happens, and get over it, just like the folks at Enron & Lehman

But they were not vilified and threatened. That's the only reason I spoke up.

Read it again. I don't ask for sympathy, nor do I use exclamation points.

With gratitude to those who read it carefully the first time and responded thoughtfully.

-----------------------------------original post---------------------------

Once upon a time my husband, working as a contractor from Digital, helped move the offices of FP from Manhattan to Westport, CT. When he came home to Vermont he was glowing with satisfaction of a difficult job well done and the pleasure of having worked with so many committed and intelligent people. I said "Wow, I wonder what it would take to work for them?"

I got one answer then.

When the CEO left with most of the IT department, the contractors who had worked on the move were the heroes who came to the rescue. And my husband was hired.

Thus began 15 years of being on call every hour of every day of every week of every year.

Never getting to read the boys a bedtime story without the phone ringing from Hong Kong or Tokyo or London or Paris because the mail server was down or someone couldn't log on to their office machine from home or....

Eating at his desk with a phone to his ear - at dinner - at home.

And that was in Connecticut where we had bought a modest home and were able to save most of the 'bonus'.

Then we were asked to go to London. My only questions were When and How!

Little did I know he was moving over and would use my husband as his chief geek and whipping boy for the next 10 years.

My husband was held accountable by Cassano for other people's performance but never given direct authority over them, screamed at in public (as were most employees who had to encounter Joe) if any fault was found. Systems must never fail or there must be an instant correction and explanation and preventative measures put in place for the future - or else. That someone else beyond his control had made the error was never allowed as an explanation.

Some how my husband managed to get most of the others in the department to work with him.

Fortunately these challenges were a joy. But the lack of authority or promotion or respect were not. Especially when one person was hired to work in London who set out to undermine what trust there was between Cassano and my husband. This cost us most of our year's 'bonus' and lowered the level of rises for the next 3 years.

Joe Cassano is a bully. I wanted very much to like the person who made our amazing London adventure possible but it was not going to happen.

Sent to London on a 2 to 3 year commitment, half a house left in storage in CT, we have been here 'indefinitely' for 11 years pushing 12. We were unable to press for anything more than the ex-pat package we were given at the beginning and lost even housing support after the first 5 years.Our housing costs rose to 5 times what we paid in Connecticut. The salary did not.

Raises were only given in the 'bonus'. So imagine having to pay 5 times your mortgage or rent on your current salary with the promise of the rest of your compensation to come once a year, in December. How do you leave that job?

Do you leave in December and disrupt your children's education? Well, not without a very good reason.
Do you leave at the end of the school year and essentially throw away 6 months of under compensated work? Not likely.

- Oh and, a percentage of your paycheck you will be forced to 're-invest' in the company for 5 years before you will see it.

It is a very pretty velvet lined cage with a tyrant holding the key.

It was ok while the company was ok. I was familiar enough with the way the deals worked and the internal as well as external oversight to be willing to stay in the cage in order to try to save enough to be able to send the boys to university some day. - like the ordinary tax paying citizens we happen to be.

FP had ridden through some heavy weather. While rogue traders took down other banks, I knew of the peer review of the trades and the transparency that would keep that from happening at FP.

When one rogue did get in and began setting up false deals with fake companies it was my husband who pulled together all the evidence that was used to remove him and keep him from ever getting another trading job.

I had many reasons to trust that, though I was having to do most of the utility parenting and keep the world ticking over for the family while he spent all hours working, we would come out of the long hard road with money for the boys education and a retirement fund that would allow my husband to have time to do the things he loves.

Then Cassano betrayed us. The CDO business was his. The other businesses were profitable and still are. When the executive in charge of risk challenged him he was told to shut up. When it blew up Joe walked around the office, looking at people who had worked loyally for him (no choice there if you wanted to stay) and took home $1,000,000 per month, knowing that those around him were going to lose their savings and more. We have.

Ok, it was a huge blow but the government stepped in and my husband still had a job for now. But the description had changed.

Since January 2008 he has been working with Congressional auditors and investigators and the FBI to compile evidence on the deals and dealings of the people responsible, most particularly Joe Cassano.

Then the government and AIG parent lied to us. My husband had been asked to, and signed an agreement to stay for the next 2 years. In October we were told that all the prior compensation we had been forced to 're-invest' in AIG was gone and would never ever be paid to us EVER no matter whether the company ever made any more money ever again.

It was a body blow. It was what we had worked 15 years for. It was our children's education, our retirement, the down payment on a house (we own nothing). Can you feel it? That's the draining away of hope.

But one bone was thrown - we were assured that the 'retention payments' (remember we're still on a 15 year old salary that's never risen so this is actually the bulk of our annual compensation)
would be paid.

Assured by Cuomo, the Federal Government and Liddy, the CEO of AIG. So he went back to work for another 6 months.

They paid us part in December - I suppose I should have smelled a rat, but that's that 20/20 hindsight thing. It was nice, we'd planned on no Christmas as we didn't expect the money until March. So the boys got to pick out something they really wanted and we had a nice Christmas.

The year before they had moved our payment from December to March. Yes, we had budgeted for 12 months and it suddenly turned into 15. Could you do that? Go 3 months without getting paid. Amazingly we managed.

We waited worried that the March payment might not come, despite the assurances. We counted the days until the transfer was to be made, checking the FX rate, wondering what the final number would be that we would live on and try to rebuild the children's education fund with - retirement fund will have to wait.

And then our government betrayed us, painted us as thieves and threw our co-workers in Connecticut to the mob. No one ever approached anyone at FP to re-negotiate those contracts and everyone currently screaming about them knew what they contained in October if not in January.

And now Cuomo says that the security of our families can be purchased by returning the compensation we had been promised with his re-assurance in October. He is no better than a highwayman waiving a gun "Your money or your lives."

Now I know what it would take for my husband to work AIGFP.
jespirals: (Default)
Little populist outrage at latest AIG hearing
The Associated Press
Tuesday, March 24, 2009; 5:30 PM

WASHINGTON -- Treasury Secretary Timothy Geithner made a House Republican go "hmmm."

This was news, considering Geithner's audience on Tuesday: the venerable, and lately venomous, House Financial Services Committee, for which no explanation, professed sorrow or death threat report from a witness last week was good enough.

No, Rep. Frank Lucas, R-Okla., actually let Geithner answer a question about how much risk public investors might take on under the Obama administration's public-private partnership to relieve non-banks, like the demonized AIG, of toxic assets.

Very little risk, Geithner said. Potentially, an investor's dollar might earn six times that.

"Hmmm," Lucas replied thoughtfully. "Hmmm."

No scoffing? No populist rejoinder? No call for Geithner's head?

Was this the same committee that six days earlier beat the tar out of Edward Liddy, American International Group Inc. chief executive who came out of retirement for a salary of $1 to steer the failed insurance giant back to solvency, only to be told that AIG stood for "Arrogance. Incompetence. Greed?"

The same panel whose hearing spurred Republican calls for Geithner's resignation, for failing to talk Liddy into canceling the bonuses?

It was. Chaired by Rep. Barney Frank, D-Mass., the committee this week pivoted from calling for people's heads to probing what's in Geithner's, and that of the man wearing an identical tie, Federal Reserve Chairman Ben Bernanke. In many cases, panel members asked about actual economic policy.

One Democrat who had been part of the pitchfork brigade during Liddy's hearing suggested the panel should apologize to Liddy and the employees of AIG.

"Some of us are learning that we've hurt a lot of otherwise innocent and decent people that just fulfilled their contractual obligations in ... this massive company having nothing to do with the real problem that took place in the financial products division" of AIG, said Rep. Gary Ackerman, D-N.Y.

The cooler heads in the committee room reflected the breezier attitude toward AIG generally, from House leaders on down. Obama has signaled opposition to a House-passed bill that would levy a 90 percent tax on the roughly $170 million in bonuses AIG paid to some of its employees out of federal bailout funds.

And that's OK, in light of the news that AIG's senior bonus-receiving executives seem likely to return the money, House Majority Leader Steny Hoyer, D-Md., said.

"Apparently, the House bill had its effect _ they're giving it back," Hoyer told reporters at his weekly press availability.

This newfound tameness and earnest approach seemed fitting, since Frank's committee has a big job ahead that tracks Geithner's and Bernanke's.

It's composed of what are supposed to be the House's 70 leading experts on the housing and financial services sectors. Well before the 2010 elections, when every one of them will be on the ballot, the committee will have considered enough economic rescue legislation to own the results.

So most spent their time Tuesday asking substantive questions, a marked change from a week earlier. And a newly-confident Geithner defended the administration's plans, his new staff and the intentions of many like Liddy who have been demonized in the financial sector.

Rep. Maxine Waters, D-Calif., wanted to know whether the big investment firm, Goldman Sachs, was exerting too much influence over Geithner's plans.

"You hear a lot about the dissatisfaction about the bonuses, et cetera, but underneath all of this is a conversation about the linkages and the connections of the small group of Wall Street types that are making decisions," Waters told Geithner. "That's what's causing a lot of the distrust."

He did not dispute that and acknowledged that Goldman Sachs has connections to Liddy and some of Geithner's new staff. But he stuck up for Liddy and for AIG employees, calling the public treatment of them unfair.

He faced little challenge from other questions.

"What in the Constitution could you point to to give authority to the treasury for the extraordinary actions that have been taken?" asked Michele Bachmann, R-Minn.

The treasury, the Federal Reserve and the FDIC were acting under powers granted "by this body, the Congress," Geithner said, looking puzzled.

"In the Constitution, what could you point to?" Bachmann pressed.

"Under the laws of the land, of course," Geithner replied.

Apparently satisfied, Bachmann moved on.

Rep. Lynn Jenkins, R-Kan., wanted to know how much more public money AIG would need. Bernanke said that depended on how well the economy does.

Rep. Peter King, R-N.Y., asked Geithner how the government should go about preventing companies that receive bailout money from handing out contracted bonuses, without undermining legal contracts generally?

Geithner said there can be limits placed on contracts for bonuses among firms receiving taxpayer rescue money.

There wasn't a pitchfork in sight.

Ackerman was contrite about the committee's treatment of Liddy and AIG employees generally.

"We probably owe them an apology and maybe even more than that," he said. "We owe them some kind of a remedy to the damage that it looks like we've been engaging in."

© 2009 The Associated Press

Yes, yes they do.
jespirals: (Default)
This man attempted to negotiate an agreement with AIG and other parties that our returned "bonuses" (remember these are payments in lieu of a proper salary - so don't let the term confuse you) should go to a charity benefiting the victims of the economic troubles, the jobless and homeless.

This offer was refused by AIGs CEO. Liddy has never once negotiated with us. All overtures are refused. The PR that work for AIG do nothing but assist the media in pillorying FP. What about AIGIG? What about Cassano, the man who wrote the business?

This guy can afford to leave, we can't.


New York Times

March 25, 2009
Dear A.I.G., I Quit!

The following is a letter sent on Tuesday by Jake DeSantis, an executive vice president of the American International Group’s financial products unit, to Edward M. Liddy, the chief executive of A.I.G.

DEAR Mr. Liddy,

It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:

I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

You and I have never met or spoken to each other, so I’d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the institute’s generous financial aid enabled me to attend. I had fulfilled my American dream.

I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.’s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable — in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.’s effort to repay the American taxpayer.

The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers.

I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your country’s call and you are taking a tremendous beating for it.

But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didn’t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.

My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. That’s probably why A.I.G. management assured us on three occasions during that month that the company would “live up to its commitment” to honor the contract guarantees.

That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts “distasteful.”

That may also be why you authorized the balance of the payments on March 13.

At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts — until several hours before your appearance last week before Congress.

I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. It’s now apparent that you either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

You’ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.

The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to “name and shame,” and his counterpart in Connecticut, Richard Blumenthal, has made similar threats — even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.

So what am I to do? There’s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.

That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.

On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less — in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.

This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.

Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the company’s diverse businesses — especially those remaining credit default swaps. I’ll continue over the short term to help make sure no balls are dropped, but after what’s happened this past week I can’t remain much longer — there is too much bad blood. I’m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that I’ll leave under my own power and will not need to be “shoved out the door.”


Jake DeSantis
jespirals: (Default)
Not from someone I know. But from someone I would be privileged to meet....

Dear Family, Friends and Colleagues,

As most of you know I work at AIG, specifically in the division known
as Financial Products which is often cited as the "root of the
problem" at AIG. It seems to me that given the media circus, political
hypocrisy and witch-hunting going on in the US right now, I should try
to set a few facts out and make a few points that, while they are
appearing in the press, are being drowned out in the populist frenzy.

First of all, what happened at AIG? AIG has been destroyed by a
systemic failure of management that started when Hank Greenberg was
booted out. I have facts that prove that had Greenberg not been
removed, AIG would be in fine form today, but he does need to accept
the blame for the weak overall structure of the place. Now what I mean
by systemic failure is this: while it is true that AIG FP lost a
fantastical amount of money, something like 45 billion dollars, other
units at AIG, namely AIGGIC in its securities lending activity has
lost even more. It is misleading and an intentional distortion of the
facts by AIG and the treasury to pin this solely on FP, much as FP
does richly deserve blame. The real issue is that AIG management was
absent from FP, they left it to be run as the personal royal estate of
Joe Cassano, entrusting him with risk management, deal making, and all
compensation decisions with no recourse by the employees to AIG
management nor any oversight by AIG management. By the way, the head
of Risk Control for the whole of AIG, Bob Lewis, is still working in
that role today.

Even worse than this is that the failure of AIG is part of a systemic
failure of the anglo-saxon financial world. If AIG alone had failed,
then the lessons to be learned would be at AIG alone. However, as
clearly as AIG itself is a case study in corporate governance failures
that I hope will be taught to the future class of sheep/managers at
Harvard Business School, the real failures in the US and UK banking
systems stem from an extremist belief in the free market. How else to
explain the simultaneous failures of virtually every large US and UK
bank? And the blame for this lies squarely in the corrupt circles of
US politico-business classes. Joe Cassano used to extort contributions
from his employees for Chris Dodd, the very man now leading the charge
against the employees of FP. Basically at the heart of the US
democratic system is the fundamental issue that those with money can
influence those with power and that usually their interests are
narrow, short term and take no account of the country at large.

Personally I hate this system, I fear for the future of America and
the world and I and many of my colleagues strongly supported
candidates of change like Obama because we could see something was
amiss. I will tell you though, what was amiss was not that a bunch of
hard working, highly motivated and intelligent individuals working in
finance got paid a lot, what was amiss was that the wider culture led
by people like W Bush and Dick Fuld and Jimmy Cayne set and reinforced
the example that money was the ultimate arbiter of goodness and
rightness and that people who stuck to their traditional values and
actually cared about the institutions they worked in and refused to do
crappy business that would blow up their banks were sidelined and
underpaid and made to feel like fools for "not getting it". My team
contained a Slovak physicist who in act of great courage and wisdom,
defected from the eastern block during the cold war. A French civil
engineer who would like to build bridges but couldn't resist the lucre
of finance. A Russian-Jewish immigrant who has worked his way up from
busboy in a brooklyn diner to key member of the the commodities
business and an indian graduate of IIT who fixes his own broken
electronics gear on his desk at work.. These people are not corrupt.
They have earned their success. Their stories are even testament to
the simple fact that anyone could come get a job in finance and
succeed. If anything, the tragedy is that so many talented people
worked in finance when they and society would have been better off
with their efforts focussed else where.

I and most of colleagues at FP are in that group. Last year, amidst
the greatest financial crisis in a long time and the crumbling of AIG,
the businesses I ran made tens of millions of profit eve after
deducting losses taken when we had to pay others to take over our
books of business after AIG failed. In my career I have probably made
something like a billion dollars for the banks I worked for (Bear
Stearns and AIG) and doing this required all my intelligence, energy
and hours. I have spent over 15 years waking up at 5am and coming home
late at night , playing by the rules, making thought-through, ethical
and conscientious decisions in the framework of an industry that has
existed for thousands of years and currently employs hundreds of
thousands of people in the major financial centers. None of What I did
was illegal, none of what I did was unethical, none of what I did
keeps me up at night. I will happily stand in front of congress and
justify every deal, every mark, every decision I made. And most of the
employees at FP, many of whom I count as friends and honorable people,
will happily do the same. I can also tell you that for my profits I
have earned less than Joe Cassano earns in interest every year on what
he was paid for producing world record losses. Joe Cassano has not
been asked to return a penny of his 280 million dollars.

What is happening in the US political system today is a travesty of
fairness, basic rights and transparency. Where was this congressional
outrage and mob-baiting over abu-ghraib, guantanomo, the failing
educational system, the failing health care system, the incredible
inequality of opportunity and outcome in the US, the illegal war in
iraq and I'm sure this list can go on? This outrage is manufactured by
the very politicians, Barney Frank, Chris Dodd, Andrew Cuomo and
others who supervised the system, who took it's fruits as campaign
contributions, to hide their own far greater culpability in the
creation of the mess we are in. The crisis is systemic and the leaders
of the system are trying to blame it on 10 guys in connecticut.
Please, you should feel insulted to your core that the US political
establishment tries to lie to you again.

I am not shocked. I am an observer of US foreign policy. I see how the
US corrupts, betrays, its principles lies, mis-names its deeds and
turns on its allies all over the world all day every day. That this
rot and corruption are now being evidenced domestically in the form of
a McCarthy like witch-hunt of "bankers" is much less shocking than
that they would kill a million Iraqi's and then declare victory for
democracy. I am not shocked that in a country where only 30% of the
population can name the three branches of government (but 70% can name
an America Idol judge) that it does not seem important that congress
is trying to pass ex-post-facto taxes or secure bills of attainder.
It flows naturally that the vitiation of contract law doesn't seem
Because congressman only really care about the next election and care
nothing about the long term. The same crappy incentive scheme that has
destroyed finance is destroying the US government. The real leaders
are being mocked for their stands on principle. Today it is not god
bless america, it is god help america.

Now on the specific case of the AIG bonuses, let me spread a little
1) On October 22nd 2008 (one month after bailout) Andrew Cuomo
reaffirmed our right to payments under the retention plan.
2) On October 9th Bill Dooley, the head of financial services at AIG,
restated that the treasury and AIG were committed to payments under
the ERP.
3) AIG reduced the value of our deferred compensation to zero,
effectively cutting the value of the contracts under the ERP by about
30-50% depending on the amount due to each employee.
4) AIG wiped out the value of our previously earned deferred
compensation, costing me, for example, about half my saving and many
others in the company the same.
5) At no time did AIG ask to renegotiate the contracts or plead
extenuating circumstances. Many of us would have worked for much less
or for nothing just to clean things up.
6) AIG prepaid 30% of the ERP amount in December with their hearty
thanks for a job well done. The treasury knew of and had to approve

Is it really fair of them to try to renegotiate after we have
performed on our half of the contract? It would have been fair in
september during the bailout, or in october. Those were extraordinary
circumstances. But is it fair of them to come to us after the end of
the contract and then ask for the money back after many of us have
made personal and professional sacrifices based on these contracts? I,
along with many of my colleagues, have expressed a willingness to give
the money to charity. But under no circumstances will we accept that
we did not earn the money. Is it fair or criminal that Cuomo would
threaten us with the release of our names if we don't return the
money? That is blackmail. It is a crime of the most despical nature.
Hopefully Cuomo will meet the destiny of the last New York Attorney
General to mess with AIG, Spitzer.

Lastly, let me say one thing on the matter of the practicality of
running AIG FP with out us. AIG FP is the nexus of thousands of
contracts of incredible complexity. These are managed in purpose built
systems using carefully crafted procedures. If all of us leave, who
will maintain the systems for which there are no manuals? Who will
know how to operate the technological machinery that is totally
purpose built in house? Who will have the relationship with the
relevant client with whom we have to negotiate as we unwind their
contracts? True one or two or ten of us could be replaced (although
after the current furor they would would want to paid a lot and in
advance and with a letter from the president and the treasury and the
supreme court that they can keep their pay) but if we all leave? Even
a hijacker has enough sense not to shoot the pilot unless he can fly.
Mr Frank, Mr Dodd and Mr Cuomo, can any of you run AIG FP?

I didn't think so.
jespirals: (Default)
AIG Employees to Repay $50 Million in Bonuses
Executives at Troubled Unit Vow to Give Up Payments, Staving Off Cuomo Threat to Release Names
By Brady Dennis
Washington Post Staff Writer
Tuesday, March 24, 2009; D01

The e-mail went out at 6:46 p.m. on Friday.

It had been a brutal week inside AIG Financial Products. News that the firm had doled out more than $165 million in retention payments over the past week had angered the country and sent lawmakers into fits of rage. American International Group's president, Edward M. Liddy, had asked that the unit's employees consider returning some, if not all, of the money. New York Attorney General Andrew M. Cuomo had subpoenaed AIG for a list of Financial Products employees and how much money each had received.

Now, the firm's chief operating officer, Gerry Pasciucco, had set a 5 p.m. Monday deadline for staffers to indicate whether they planned to return their retention payments, and if so, what percentage. His e-mail included what appeared to be a tacit ultimatum from Cuomo.

"We have received assurances from Attorney General Cuomo that no names will be released by his office before he completes a security review which is expected to take at least a week," Pasciucco wrote."To the extent that we meet certain participation targets, it is not expected that the names would be released at all."

Yesterday afternoon, 18 of the 25 most senior Financial Products executives had agreed to return their retention payments, amounting to more than $50 million thus far. Company officials expect more employees to follow suit.

"They are doing the right thing," Cuomo said on a conference call with reporters, adding that he now saw no need to reveal the names.

In addition, AIG issued a news release that said, "We are deeply gratified that a vast majority of FP's senior leadership have expressed a willingness to forsake their recent retention payments."

AIG's efforts to retrieve the payments after last week's outpouring of public indignation marked a dramatic reversal to months of assurances to Financial Products employees that the insurance giant would honor those contracts, according to numerous internal AIG e-mails and memos obtained by The Washington Post.

The retention program at Financial Products was created in March 2008. The unit's longtime president, Joe Cassano, had announced his resignation as it became clear that the housing bubble was collapsing and the firm's now-famous credit-default swaps were going to cost AIG billions of dollars. Company executives planned to keep Financial Products afloat, but they worried that its employees would flee without the promise of financial stability.

"AIG is committed to the future of AIG-FP and is confident about the long term prospects for the business," Bill Dooley, an AIG senior vice president, wrote to Financial Products employees on March 18, 2008. "AIG recognizes that it is important to combine our statements of support for the business with a retention plan that reassures employees regarding their current and future financial prospects with the company. We hope that this plan will encourage all of you to make the same continuing long-term commitment to AIG-FP that AIG is making."

Those promises kept coming -- even as the federal government rescued AIG in September, even as the company decided that Financial Products must be closed down, and even as it hired consulting firms such as McKinsey and BlackRock to work alongside the Federal Reserve to help chart the path ahead.

"The unwinding of FP's complex portfolio will take time to complete and will require the specialized skills and unique knowledge that you have," Dooley wrote to the Financial Products staff on Oct. 3. "I ask that you continue to operate with the same professionalism and grace that you have shown to date. . . . Although many issues remain to be resolved, I can tell you that AIG will live up to its commitment in honoring your retention guarantees."

Several AIG executives said that Cuomo was aware of the retention payments last fall.

"They showed it to Cuomo," said one executive, who was not authorized to speak on the record. "Cuomo was aware this thing was signed up."

Cuomo's office did not respond to a request to comment yesterday on when he became aware of the payments.

Cuomo had met with Liddy in October to express displeasure over executive compensation and lavish spending at AIG. In a news release that AIG and Cuomo's office jointly issued after the meeting, Cuomo was quoted as saying, "These actions are not intended to jeopardize the hard-earned compensation of the vast majority of AIG's employees, including retention and severance arrangements, who are essential to rebuilding AIG and the economy of New York."

In November, AIG hired Pasciucco, a Morgan Stanley veteran, to help Financial Products carefully dismantle the unit's more than $2 trillion in exposures. "This is a tremendous undertaking and it will require the effort of the entire company," he wrote to the staff that week. "There is great urgency around this task."

Months later, on March 2, AIG posted a $62 billion loss for the fourth quarter of 2008 and announced an expanded bailout that included access to another $30 billion of taxpayer money. That day, Pasciucco sent another e-mail to his staff.

"Our mission at FP remains unchanged," he wrote. "Today is not a day to pause and be distracted by the news flow. Fortunately, today can be a day like any other. The restructuring allows us to continue to have the tools we need to stay focused and continue to professionally execute our plan."

Soon, however, the tide began to change. On March 13, the day the retention payments began to go out and two days after Treasury Secretary Timothy F. Geithner had chided Liddy about them, another e-mail arrived from Pasciucco.

"Although today we honored our legal obligation to make this payment," he wrote, "it would be irresponsible for us not to recognize the extraordinary circumstances we find ourselves in, and to do as much as we are able to reduce other, non-contractually obligated payments."

Pasciucco noted that each of the firm's employees had "been severely tested in the past year and will continue to be challenged in the weeks and months ahead."

Little did he know how much they would be tested in the coming days, receiving the scorn of the public and the Congress and even facing death threats as word of the retention payments spread. As the hysteria began to swell early last week, Pasciucco e-mailed his colleagues once again.

"Barring a new meltdown by Britney Spears, we are likely to occupy the front page for some time to come," he wrote. "Ignore it. Focus on what we each do control. Focus on the future. Focus on the professional completion of the work at hand so that, when viewed fairly and away from the heat of easy populist sophistry, we will all be proud."
jespirals: (Default)
March 21, 2009
The Problem With Flogging A.I.G.

Can we all just calm down a little?

Yes, the $165 million in bonuses handed out to executives in the financial products division of American International Group was infuriating. Truly, it was. As many others have noted, this is the same unit whose shenanigans came perilously close to bringing the world’s financial system to its knees. When the Federal Reserve chairman, Ben Bernanke, said recently that A.I.G.’s “irresponsible bets” had made him “more angry” than anything else about the financial crisis, he could have been speaking for most Americans.

But death threats? “All the executives and their families should be executed with piano wire — my greatest hope,” wrote one person in an e-mail message to the company. Another suggested publishing a list of the “Yankee” bankers “so some good old southern boys can take care of them.”

Or how about those efforts to publicize names of individual executives who received bonuses — efforts championed by Attorney General Andrew Cuomo of New York and Barney Frank, chairman of the House Financial Services Committee. To what end?

How does outing these executives fix skewed compensation incentives, which have created that unjustified sense of entitlement that pervades Wall Street? No, it’s mostly about using subpoena power to satisfy the public’s thirst for blood. (In light of the death threats, when Mr. Cuomo received the list of A.I.G. bonus recipients on Thursday, he promised to consider “individual security” and “privacy rights” in deciding whether to publicize the names.)

Then there was that awful Congressional hearing on Wednesday, in which A.I.G.’s newly installed chief executive, Edward Liddy, was forced to listen to one outraged member of Congress after another rail about bonuses — and obsess about when Treasury Secretary Timothy Geithner learned about them — while ignoring far more troubling problems surrounding the A.I.G. rescue.

Oh, and let’s not forget the bill that was passed on Thursday by the House of Representatives. It would tax at a 90 percent rate bonus payments made to anyone who earned over $250,000 at any financial institution receiving significant bailout funds. Should it become law, it will affect tens of thousands of employees who had absolutely nothing to do with creating the crisis, and who are trying to help fix their companies.

Meanwhile, the real culprits — like Joseph J. Cassano, the former head of A.I.G.’s financial products division— are counting their money in “retirement.” Nobody on Capitol Hill seems much interested in getting that money back. (And the bill does nothing about bonuses that were paid before 2009, meaning that most of those egregious Merrill Lynch bonuses, paid at the end of last year, will not be touched.)

By week’s end, I was more depressed about the financial crisis than I’ve been since last September. Back then, the issue was the disintegration of the financial system, as the Lehman bankruptcy set off a terrible chain reaction. Now I’m worried that the political response is making the crisis worse. The Obama administration appears to have lost its grip on Congress, while the Treasury Department always seems caught off guard by bad news.

And Congress, with its howls of rage, its chaotic, episodic reaction to the crisis, and its shameless playing to the crowds, is out of control. This week, the body politic ran off the rails.

There are times when anger is cathartic. There are other times when anger makes a bad situation worse. “We need to stop committing economic arson,” Bert Ely, a banking consultant, said to me this week. That is what Congress committed: economic arson.

How is the political reaction to the crisis making it worse? Let us count the ways.

IT IS DESTROYING VALUE During his testimony on Wednesday, Mr. Liddy pointed out that much of the money the government turned over to A.I.G. was a loan, not a gift. The company’s goal, he kept saying, was to pay that money back. But how? Mr. Liddy’s plan is to sell off the healthy insurance units — or, failing that, give them to the government to sell when they can muster a good price.

In other words, it is in the taxpayers’ best interest to position A.I.G. as a company with many profitable units, worth potentially billions, and one bad unit that needs to be unwound. Which, by the way, is the truth. But as Mr. Ely puts it, “the indiscriminate pounding that A.I.G. is taking is destroying the value of the company.” Potential buyers are wary. Customers are going elsewhere. Employees are looking to leave. Treating all of A.I.G. like Public Enemy No. 1 is a pretty dumb way for a majority shareholder to act when he hopes to sell the company for top dollar.

IT IS, UNFORTUNATELY, BESIDE THE POINT Even on Wall Street this week, I didn’t hear anyone condoning the A.I.G. bonuses. They should never have been granted, and Mr. Liddy should have been tougher about renegotiating them. (A rich irony here is that any nonfinancial company in A.I.G.’s straits would be in bankruptcy, and contracts would have to be renegotiated. The fact that the government is afraid to force A.I.G. into bankruptcy, despite its crippled state, is the main reason Mr. Liddy felt he couldn’t try to redo the contracts.)

But there is a much bigger issue that has barely been touched upon by Congress: the way tens of billions of dollars of taxpayers’ money has been funneled to A.I.G.’s counterparties — at 100 cents on the dollar. How can it possibly make sense that Goldman Sachs, Bank of America, Citigroup and every other company that bought credit-default swaps from A.I.G. should be made whole by the government? Why isn’t it forcing them to take a haircut?

What’s worse, some of those companies are foreign banks that used credit-default swaps to exploit a regulatory loophole. Should the United States taxpayer really be responsible for ensuring the safety of European banks that were taking advantage of European regulations?

The person who has made this point most forcefully is Eliot Spitzer, of all people. In his column for, he wrote: “Why did Goldman have to get back 100 cents on the dollar? Didn’t we already give Goldman a $25 billion cash infusion, and aren’t they sitting on more than $100 billion in cash?” Mr. Spitzer told me that while “there is a legitimate sense of outrage over the bonuses, the larger outrage should be the use of A.I.G. funding as a second bailout for the large investment houses.” Precisely.

IT IS DESTABILIZING How can you run a company when the rules keep changing, when you have to worry about being second-guessed by Congress? Who can do business under those circumstances?

Take, for instance, that new securitization program the government is trying to get off the ground, called the Term Asset-Backed Securities Loan Facility — or TALF. Although it is backed by large government loans, it requires people in the marketplace — Wall Street bankers! — to participate.

This program could help revive the consumer credit market. But at this point, most Wall Street bankers would rather be attacked by wild dogs than take part. They fear that they’ll do something — make money perhaps? — that will arouse Congressional ire. Or that the rules will change. “The constant flip-flopping is terrible,” said Simon Johnson, a banking expert who teaches at the M.I.T. Sloan School of Business.

A.I.G. offers another good example. Not all the employees who face the possibility of having their bonuses taxed out from under them work for the evil financial products division. Many of them work in insurance divisions. Very few of them pull down million-dollar bonuses, and none of them brought A.I.G. to its knees. (And employees who bought the company’s stock are already hurting financially, having seen its value virtually wiped out.) They are the ones the company badly needs to keep if it hopes to sell those units at a healthy price. Taking away their bonuses — after they’ve already put the money in their bank accounts — hardly seems like the right way to motivate them. And demonizing them in Congressional hearings doesn’t help either.

In previous columns, I have been an advocate of nationalizing big banks like Citigroup. But after watching Congress this week, I’m having second thoughts. If this is how Congress treats A.I.G., what would it do if it had a bank in its paws?

What the country really needs right now from Congress is facts instead of rhetoric. Instead of these “raise your hand if you took a private jet to get here” exercises of outraged populism, we need hearings that educate and illuminate. Hearings like the old Watergate hearings. Hearings in which knowledge is accumulated over time, and a record is established. Hearings that might actually help us get out of this crisis. It’s happened before. In 1932, Congress established the Pecora committee, named for its chief counsel, Ferdinand Pecora. It was an intense, two-year inquiry, and its findings — executives shorting their own company’s stock, for instance — shocked the country. It also led to the establishment of the Securities and Exchange Commission and other investor protections. One person who has been calling for a new Pecora committee is Senator Richard Shelby of Alabama, a Republican and key member of the Senate Banking Committee.

“As we restructure our regulatory system, we need to be thorough,” he told me. “We need to understand what caused it. We shouldn’t rush it.”

Meanwhile, the House Financial Services Committee has scheduled a hearing on Tuesday featuring Mr. Bernanke and Mr. Geithner. The hearing has been called to find out only one thing: what did the two men know about the A.I.G. bonuses, and when did they know it?

Is that Nero I hear fiddling?
jespirals: (Default)
Wire: BLOOMBERG News (BN) Date: 2009-03-20 04:01:00
Congress Curses the AIG Frankenstein It Created: Ann Woolner

Commentary by Ann Woolner
March 20 (Bloomberg) -- For all the righteous indignation
at American International Group Inc. spewing from Capitol Hill
this week, you would think Congress had played no role in
creating this mess.
All the screaming this week at AIG’s Chief Executive
Officer Edward Liddy diverts attention from the role Congress
played. It helped build the mammoth firms taxpayers are bailing
out and the risky, unregulated derivatives business that made
them so vulnerable.
At a mid-week House hearing focused on AIG, New York
Democrat Gary Ackerman ridiculed credit default swaps as
insurance dressed up as something else to avoid regulation and
full collateralization. And yet, in just a few years swaps
became a multitrillion-dollar market, one so toxic that it lies
at the very heart of AIG’s near-collapse, spreading economic
chaos around the world.
“How is this suddenly an industry?” an outraged Ackerman
demanded, wondering aloud how it all happened.
Ackerman and other longstanding members of the House
Financial Services Committee should know full well how it
Lawmakers made the monsters they have reluctantly been
trying to rescue in recent months and which they’re now
bludgeoning by popular demand. They did it with laws passed in
1999 and 2000.
What ignited the firestorm this week was news that AIG, the
beneficiary of a $173 billion government bailout, had set aside
a $165 million pool of retention bonuses for people in the very
unit whose reckless trading threatened to bring down the firm
and wreaked havoc on the economy.

Eve of Destruction

“They’re getting paid for the destruction they’ve caused
to our communities,” House Ways and Means Chairman Charles
Rangel said yesterday. “They’re getting away with murder.”
House members traded partisan blame yesterday over who’s to
blame for mishandling AIG’s bailout. But no rescue would have
been needed if it hadn’t been for earlier legislation that
opened the door to the current meltdown.
First with the Gramm-Leach-Bliley Act in 1999, Congress
tore down a 66-year-old wall that kept investment and consumer
banks separate from each other and from insurance companies,
securities firms and any other outfit with a financial service
to sell.
That allowed the creation of “behemoths” that “would
would become too big to fail or, more importantly, too big to
manage,” says James Cox, who teaches securities and corporate
law at Duke University.

Bigness Is In

Next came the Commodity Futures Modernization Act of 2000,
which exempted credit default swaps and collateralized debt
obligations from government regulation by the Commodity Futures
Trading Commission.
President Bill Clinton signed both bills into law.
So to answer Ackerman’s question, that’s how this industry
was born. The 1999 law was Republican-driven in Congress and
pushed by the powerful financial services lobby. Sanford Weill
had already merged the Travelers Group with Citicorp in 1998 on
a bet that Congress would legalize the move.
Next, both parties in Congress gave Wall Street a Christmas
present at the end of 2000, allowing credit default markets to
grow in the dark, away from the spotlight of government
“The credit default market has grown to gargantuan
proportion in a very sort period of time,” Cox says. “It’s a
classic illustration how private enterprise not closely
monitored by government can change the face of the Earth,” he

$1 Trillion Collapse

Lawmakers can’t claim they weren’t warned against the
danger of letting credit default swaps avoid government
When the hedge fund Long-Term Capital Management with more
than $1 trillion in derivative contracts almost collapsed in
1998, it should have set off alarms.
Yet when Brooklet Born, then-acting chairwoman of the
Commodity Future Trading Commission warned that an unmonitored
market in private derivative contracts would pose “grave
dangers to our economy,” she went unheeded.
Working against her was the powerful financial services
lobby as well as then-Federal Reserve Chairman Alan Greenspan,
Clinton Treasury Secretary Robert Rubin and Arthur Levitt, then
chairman of the Securities and Exchange Commission. Levitt is a
director of Bloomberg LP, parent of Bloomberg News.
They argued Born was trying to stretch the Catch’s reach
beyond congressional intent. So no agency was put in charge of
monitoring the derivative contracts.
Now there are more calls for regulating the derivates
market. Back in September SEC Chairman Christopher Cox called on
Congress to do it “immediately.”
We’re still waiting for that.
But don’t we feel better that Congress is so quickly acting
to recoup a few million dollars in bonuses?

(Ann Woolner is a Bloomberg News columnist. The opinions
expressed are her own.)
jespirals: (Default)
Inside AIG-FP, Feeling the Public's Wrath

Brady Dennis
Washington Post Staff Writer
1210 words
19 March 2009
The Washington Post

Copyright 2009, The Washington Post Co. All Rights Reserved

A solitary flat-screen television hangs on the back wall of the trading floor inside the headquarters of AIG Financial Products here. Wednesday afternoon, the most-talked-about employees in America huddled around it to find out just how despised they have become.

They watched quietly as members of Congress referred to them as greedy and incompetent. They heard more than one demand that their names be released to the seething American public. They heard the chairman of American International Group, Edward M. Liddy, tell lawmakers that people, in e-mails sent to AIG-FP, suggested that the firm's leaders "should be executed with piano wire around their necks."
The evening before, the firm's chief operating officer, Gerry Pasciucco -- whom Liddy recruited in November from Morgan Stanley to shut down Financial Products before it could do more harm to the economy -- had gathered them together in the same spot.

Pasciucco urged them to keep their heads down, to act professionally and to continue working to extricate Financial Products from its more than $1.6 trillion in outstanding derivative contracts. He acknowledged that the past few days have been like being "inside the pinata."

In reply, they told him that they worried mostly about getting shot, despite the guards now patrolling the parking lot, the front door and some of their homes.

A sense of fear hung in the room -- the palpable, unsettling kind that flashes across people's eyes. But there was anger, too. No one would express it publicly, of course. Who wants to hear a wealthy financier complain? And yet, within those walls off Danbury Road lies a deep sense of betrayal -- first by their former colleagues, now by their elected leaders.

The handful of souls who championed the firm's now-infamous credit-default swaps are, by nearly every account, long since departed. Those left behind to clean up the mess, the majority of whom never lost a dime for AIG, now feel they have been sold out by their Congress and their president.

"They've chosen to throw us under the bus," said a Financial Products executive, one of several who spoke on condition of anonymity, fearing reprisals. "They have vilified us."

They say what is missing from this week's hysteria is perspective. The very handsome retention payments they received over the past week were set in motion early last year when the firm's former president, Joe Cassano, was on his way out the door. Financial Products was already running into trouble on its risky credit bets, and the year ahead looked grim. People were weighing offers from other firms, and AIG executives feared that too many departures could lead to disaster.

So AIG stepped in with an offer to employees of Financial Products. Work through all of 2008, and you'd get a lump payment in March 2009. Stick around through 2009, and you'll get paid through 2010. Almost all other forms of compensation -- bonuses, deferred payments and the like -- have vanished.

"People are trying to do the right thing," the same Financial Products executive said. "Guys have worked their [tails] off to try to get value for the taxpayer. This isn't money that's being advanced to us. People have performed the work and done it exactly as we asked them to do."

Pasciucco cringed at the notion, articulated by many lawmakers and even President Obama, that Financial Products is a firm of nearly 400 reckless and greedy derivatives traders.

In actuality, he said, nearly all the troublesome sectors of the business -- namely, the risky credit derivatives written on mortgage-backed securities -- are now out of the equation, as are the people who worked on them. That leaves a small number of employees to untangle the remaining trades in four main areas: commodities, interest rates, currency and equities -- most of which were fully hedged and have caused little problem. The effort also requires a sizable number of "back office" staff, such as systems, computing, accounting, human resources and legal teams.

"Everybody, including my secretary and including the guy down the hall that serves lunch, gets a payment," said Pasciucco, who added that he received no retention payment and has no contract.

But what about the argument made by top AIG officials that the people receiving retention bonuses have unique skills and knowledge that make them indispensable?

"They are replaceable," Pasciucco acknowledges. "If we were running a long-term business, we could probably replace them over time, not all at the same time."

But it would be impractical at best, dangerous at worst, to get rid of everyone at Financial Products, according to AIG officials. If everyone leaves, Pasciucco said, "you don't have people that really, truly understand the book [of business]. We're still big enough that that matters."

If they did walk out the door, who would volunteer to work at the Chernobyl of the financial world? And what would become of the mammoth portfolio that remains?

"It would become the biggest naked position on Wall Street," one longtime Financial Products executive said, "and everybody would exploit it."

Before he waded into the circus on Capitol Hill on Wednesday, Liddy e-mailed a letter to the employees of Financial Products, asking them to "step up and do the right thing." He asked that anyone who received more than $100,000 in retention payments return at least 50 percent.

The Financial Products staff met twice Wednesday inside one of the firm's large, glass-walled conference rooms to discuss the boss's letter. Numerous employees indicated that they would be willing to return the money, but most wanted nothing more to do with the firm. It was a preview of the possible exodus to come, one that concerns Liddy himself.

"My fear is that the damage is done," he told a congressional subcommittee. "That they will return [the money], but that they will return it with their resignations."

There is little doubt within Financial Products that he's right about that.
"Nobody is going to give it back and then stay," said one of the firm's employees. "If they give back the money, then they will walk. And they will walk into the arms of AIG's counterparties."

In the meantime, the e-mails from the public have continued to roll in, including death threats and calls to blow up the firm's Wilton headquarters. Reporters and photographers have camped out in front of the offices in London and Connecticut. They have staked out employees' houses. The New York Post identified one executive and labeled him "Jackpot Jimmy." Another employee had to relocate his family after a London tabloid printed his address. A protest group is organizing an "AIG magical mystery tour" Saturday, loading up a 47-seat bus to stop at Financial Products and at the homes of some of its executives.

"People are really upset. Everybody's calling them," one Financial Products employee said. "College roommates are calling. In-laws, relatives, cousins nobody has heard from. Because people are reading this around the world and saying: 'Oh, my God, you work for that place?' "
jespirals: (Default)
The money consistently referred to here and in the various media as "bonus" was NOT on top of a large salary.

We had no pay rise for 15 years but were compensated in a lump sum at the end of the year for back office work that simply allowed the company to function.

It was our compensation for a year's work.

Could you afford to work for a third of your salary?

Neither can we.

Below is the analysis that preceded the payments and the current public hysteria.

AIGFP Employee Retention Plan
Executive Summary
AIG is contractually obligated to pay a total of about $165 million of previously awarded
retention pay to AIGFP employees (in respect of 2008). This amount is due pursuant to a
retention plan entered into in early 2008. About $55 million of retention pay was
previously paid around December, and about $93 million of additional retention pay will
be eliminated because of losses at AIGFP (in accordance with the terms of the plan). AIG
is also obligated to pay about $6 million of guaranteed pay to AIGFP employees under
contractual obligations outside of the retention plan.
AIG is required to make these payments on or before March 15 by the terms of the
retention plan or individual contract guarantees, all of which pre-date TARP and AIG’s
current Chief Executive Officer. Outside counsel has advised that AIG is legally obligated
to pay and, under applicable law, risks a doubling of the amount owed as a penalty. In
addition to this and other legal obstacles, business requirements necessitate payment.
AIG has also attempted to develop acceptable alternatives to restructure guaranteed
amounts owed. However, efforts have not been successful for payments in respect of 2008
in light of the employees’ contractual rights to receive these payments combined with new
tax limits under Section 409A of the Internal Revenue Code that limit the ability of
employers and employees to alter payment dates for deferred compensation. However, AIG
has committed to use its best efforts to reduce the amounts AIG owes in respect of 2009.
This will be accomplished through voluntary acts such as salary reductions, through
negotiations when we sell businesses and through other arrangements over time. We
believe that guaranteed payments at AIGFP for 2009 can be reduced by at least 30%.
Details Regarding Retention Plan
In the first quarter of 2008, AIGFP adopted a retention plan for about 400 employees that
provided guaranteed payments to employees if they worked through specified payment
dates (or either resigned for good reason or was terminated without cause before the
relevant dates). At the time, AIGFP was expected to have a valuable, on-going role at AIG.
The plan was implemented because there was a significant risk of departures among
employees at AIGFP, and given the $2.7 trillion of derivative positions at AIGFP at that
time, retention incentives appeared to be in the best interest of all of AIG’s stakeholders.
The program was evidenced by a written plan distributed to employees and by individual
agreements executed by them.
For senior management the plan provides that 2008 and 2009 compensation will be 75%
of 2007 expected compensation levels. Other participants are set at the full 2007 level.
This resulted in a $313 million total for 2008 and a $327 million total for 2009 (because
some employees who had other guaranteed compensation for 2008 were excluded for that
year). The 2008 awards range from $1,000 to slightly less than $6.5 million. Only seven
employees will receive more than $3 million.
The total for each year is divided into two components. The first is required to be paid on
or before March 15 of the following year (this is $220 million for 2008), and the second is
retained by AIGFP, serves as part of AIGFP’s capital structure and is at risk for losses (this
is about $93 million for 2008). The division between current pay and at-risk pay is
highest for the most senior employees – up to almost half. This is how AIGFP has
traditionally structured its compensation.
Of the $220 million, about $165 million is required to be paid on or prior to March 15,
2009 and about $55 million was previously paid. In light of the large losses incurred last
year, current and former employees will see their deferred compensation accounts reduced
to the point where they will have negative balances. As a consequence there is no
immediate prospect that employees will receive any payout of the at-risk piece for 2008
(about $93 million) or the remaining approximately $582 million in at risk pay earned from
prior years.1 A senior AIGFP manager therefore worked in 2008 for about 43% of his 2007
expected level.
An additional $6 million is guaranteed to employees for 2008 pursuant to contractual
arrangements outside of the retention plan. To avoid any confusion, the information in
this section is specific to the retention plan.
Details Regarding Legal Obligation to Pay
AIG has been advised by outside counsel that a breach of the retention plan would subject
it to claims for not only the contractually owed payments, but also penalties and fees
under the Connecticut Wage Act.2 The Wage Act provides for the recovery of double
damages and attorneys’ fees when wages are improperly withheld and the employer’s
refusal to pay wages lacks a good faith basis. (Conn. Gen. Stat. §31-72.)3 In addition,
individual managers who decide to withhold wages that are due are individually liable for
violation of the Wage Act.4
“Wages” are defined as “compensation for labor or services rendered by an employee,
whether the amount is determined on a time, task, piece, commission or other basis of
calculation.” (Conn. Gen. Stat. §31-71a.) The courts have concluded that guaranteed
bonuses constitute wages under the statute when “the payment is premised upon work or
services the employee has performed as opposed to the general success of the company or

Over the longer-term, AIGFP’s deferred compensation plans provide for the adoption of a
plan for restoring reductions to at risk pay, but only after all creditors (including the Federal
Reserve and Treasury) have been repaid.
The retention plan is governed by Connecticut law. (Section 4.04) Because the plan
mandates the application of Connecticut law, it is likely that Connecticut substantive law
will apply to claims related to the plan brought in the United States, the UK, France, Hong
Kong or Japan. Under Connecticut law, the payments are legally enforceable contractual
obligations of AIGFP. In addition, the payments are guaranteed by AIG. (Section 3.03)
Schoonmaker v. Lawrence Brunoli, Inc., 828 A.2d 64 (Conn. 2003)(double damages
appropriate for “bad faith, arbitrariness or unreasonableness”).
Butler v. Hartford Technical Inst., Inc., 704 A.2d 222 (Conn. 1997).
the whim of management.”5 Here, the retention payments are fixed payments that
compensate for services rendered in 2008 and 2009.
In addition to claims for breach of contract and violation of the Wage Act, employees
denied their contractually guaranteed payments could likely claim constructive discharge,
allowing them to resign immediately and sue to recover the guaranteed payments for 2008
and 2009. We have also been advised that AIGFP employees in foreign jurisdictions,
including France, Japan, the United Kingdom and Hong Kong, could bring valid claims for
unfair constructive dismissal in those jurisdictions.
We have been advised that the bonus provisions of the American Recovery and
Reinvestment Act of 2009 prohibiting certain bonuses specifically exclude bonuses paid
pursuant to pre-February 11, 2009 employment contracts.
Details Regarding Business Impact of Failure to Pay
AIGFP’s derivatives portfolio stands at about $1.6 trillion and remains a significant risk.
Failure to pay the required retention payments therefore could have very significant
business ramifications.
For example, AIGFP is a party to derivative and structured transactions, guaranteed by
AIG, that allow counterparties to terminate in the event of a “cross default” by AIGFP or
AIG. A cross default in many of these transactions is defined as a failure by AIGFP to
make one or more payments in an amount that exceeds a threshold of $25 million.
In the event a counterparty elects to terminate a transaction early, such transaction will
be terminated at its replacement value, less any previously posted collateral. Due to
current market conditions, it is not possible to reliably estimate the replacement cost of
these transactions. However, the size of the portfolio with these types of provisions is in
the several hundreds of billions of dollars and a cross-default in this portfolio could trigger
other cross-defaults over the entire portfolio of AIGFP.
There are also substantial risks related to the hedging of AIGFP’s various books. Although
we view the large-market risk books at AIGFP as generally well hedged, the hedging is
dynamic – that is, it must be monitored and adjusted continuously. To the extent that
AIGFP were to lose traders who currently oversee complicated though familiar positions
and know how to hedge the book, gaps in hedging could result in significant losses. This
is driven to some extent by the size of the portfolios. In the interest rate book, for example,
a move in market interest rates of just one basis point – that is 0.01% or one-100th of one
percent – could result in a change in value of $700 million dollars if the book were not
hedged. It has virtually no impact on the hedged book. There are similar exposures in the
foreign exchange, commodities and equity derivatives books.
AIGFP’s books also contain a significant number of complex – so-called bespoke –
transactions that are difficult to understand and manage. This is one reason replacing
key traders and risk managers would not be practical on a large scale. Personal

See, e.g., Feilbogen v. AIG Trading Group, Inc., No. 3:03CV1624 (DJS), 2006 U.S. Dist. LEXIS
29184 at *26-27 (D. Conn. May 15, 2006) (holding that whether guaranteed retention bonus
payments were wages was an issue of fact).
knowledge of the trades and the unique systems at AIGFP will be critical to an effective
unwind of AIGFP’s businesses and portfolios.
In this current environment, any perceived disruption in AIGFP’s ability to conduct
business, such as one that would result from the departure of a number of key employees,
could also cause parties to limit or cease trading with AIGFP. Obviously, this would
adversely affect its ability to continue to cost-effectively hedge its positions.
Departures also have regulatory ramifications. As an example, the resignation of the
senior managers of AIGFP’s Banque AIG subsidiary would allow the Commission Bancaire,
the French banking regulator, to appoint its own designee to step in and manage Banque
AIG. Such an appointment would constitute an event of default under Banque AIG’s
derivative and structured transactions, including the regulatory capital CDS book ($234
billion notional amount as of December 31, 2008), and potentially cost tens of billions of
dollars in unwind costs. Although it is difficult to assess the likelihood of such regulatory
action, at a minimum the disruption associated with significant departures related to a
failure to honor contractual obligations would require intensive interactions with
regulators and other constituents (rating agencies, counterparties, etc.) to assure them of
the ongoing viability of AIGFP as well its commitment to honoring counterparty contracts
and claims.
Details Regarding Progress of Wind-down
The team that remains at AIGFP has made significant progress in bringing down the risks
and winding down the portfolio. Since October of 2008, they have reduced the number of
trades by over 25% and AIG believes they have reduced most risks commensurately. They
have focused initially on reducing complex and difficult to manage positions, so several
risk measurements have been disproportionately reduced.
From another perspective, late last year AIG divided the risks at AIGFP into 22 separate
risk businesses or “books”. Progress has been made on assessing and managing the risk
in all books, and five books are almost completely wound down.
From the personnel side, AIGFP has gone from about 450 employees in five locations in
early 2008 to about 370 employees today. AIGFP is scheduled to close two locations,
Tokyo and Hong Kong, this year.
Details Regarding 2009 Fiscal Year
Under the retention plan, $327 million is due for 2009. Of that, $97 million constitutes at
risk pay that will be eliminated by AIGFP’s losses. An additional $7.6 million is
guaranteed to employees for 2009 pursuant to contractual arrangements outside of the
retention plan.
AIG has taken significant steps to limit overall compensation at AIGFP where it can and
has committed to doing more. The 25 highest paid active contract employees have agreed
to reduce their remaining 2009 salaries to $1. Salaries for this group ranged up to
$500,000, and the average salary was in excess of $270,000. (There are apparently legal
limits that may complicate the implementation of this and AIG will likely implement the
lowest salary levels we can equitably put in place across the relevant jurisdictions.) The
remaining 2009 salary of all other officers – anyone with a title of associate vice president
or higher – is being reduced by 10% (subject to compliance with local law requirements).
In addition, other forms of non-cash compensation will be reduced or eliminated.
We also believe that there will be considerably greater flexibility to reduce contractual
payments in respect of 2009, and AIG intends to use its best efforts to do so. AIGFP
intends to sell some of its books of business during the year. The employees related to
these books will go with the sold businesses, and we intend to require the buyer to assume
going-forward compensation payments. It is also expected that, over the course of the
year, employees will leave voluntarily or be terminated for cause and will therefore no
longer be entitled to retention amounts from AIG. Because the plan was designed to
provide security for employees, including protection against terminations without cause,
AIG is required to pay the amounts owed to employees who are downsized. However, if a
downsized employee finds new employment, retention amounts will be reduced by the
earnings from the other employer. In addition, for employees in foreign jurisdictions who
are not U.S. taxpayers, to whom the limits of Section 409A do not apply, AIG will have the
ability to negotiate with employees who are downsized. With all of these actions and other
creative restructuring solutions, AIG hereby commits to use best efforts to reduce expected
2009 retention payments by at least 30%.
Plans Complex
The preceding constitutes only a summary of the terms and operation of the AIGFP
retention plan. It is necessarily incomplete and was produced quickly, in light of
applicable time constraints. AIG has provided additional, more detailed information that
is relevant to an understanding of, and should be considered with, the summary
information in this document.

jespirals: (Default)
not mine but I like it....

Dear World:

The United States of America, your quality supplier of the ideals of liberty and democracy, would like to apologize for its 2001-2008 service outage.

The technical fault that led to this eight-year service interruption has been located. Replacement components were ordered Tuesday, November 4th, 2008, and have begun arriving. Early tests of the new equipment indicate that it is functioning correctly and we expect it to be fully operational in the coming months.

We apologize for any inconvenience caused by the outage and we look forward to resuming full service -- and hopefully even improving it in the years to come. Thank you for your patience and understanding.

Very Truly Yours,

jespirals: (Default)
Well now that I've got a teacher and am learning how to skate like the "real" skaters do, I can go into the rink in the early hours before the mere public have their chance and only the 'serious' skaters are allowed.

Today I ventured up to the rink for the 8:45 am session (takes 15 minutes to run the Zamboni).

Ok, all I'm up to is skating in a series of sweeping curves, doing circles of forward and backward cross overs, and linked 3 turns. But hey, I'm uh, older than most of them and I've not had much time to practice since I started taking lessons last year so I really need the practice time.

I now know how a toad feels attempting to cross a motorway.
jespirals: (Default)
Last weekend a dear friend of mine left us.

It all began in an off licence six years ago, I was buying vodka, he was standing around drinking wine & chatting up anything pretty that walked in. He tried to twig the precise origin of my muddled accent. I confessed to too many years in the theatre to be regional of voice and thus began our friendship.

I didn't know who he was for a month or more, until a friend pointed out his CV to me. By then it really didn't matter, he was my friend, his career was just another bit of the conversation and he was well on the way to becoming a regular presence at Sunday roasts and holiday dinners.

I had the great good fortune to see him perform "Merely Players" at a benefit for the Theatre Museum.

He was one of the kindest, loveliest people I have ever had the pleasure to call friend and will always imagine what fun it would have been to work with him.

He had been getting weaker over the last year or so and sometimes needed to be reminded of the details of some of his stories. I can recommend his biography which was compiled in a series of interviews and reads very much like standing around at Gerry's. There was talk about editing the interviews on to an audio CD, I imagine it will be done now.

The next time you raise a glass of red wine (the only thing he would drink) spare a thought. And if you are ever in London on a Saturday stop in at Gerry's on Old Compton Street and look at all the pictures. Join me there and we can waste a brilliant afternoon.

Fun stuff

Sep. 23rd, 2007 02:15 pm
jespirals: (red fraggle)
Free core workout - instead of leaning back when you are on public transport, try sitting perfectly straight no matter what the vehicle does.

nearly cracked the backwards 3 beat weave (still hitting myself in the head 'doh!)
& can do butterfly take outs with both hands!
phun with physics
jespirals: (Default)
I wrote this a year ago this weekend. It was posted on a forum where the thread got hijacked by a fundamentalist who took it as a personal insult, which was sad. But reading it again.... I still mean it.

-----------24 Sept 2006----------------------------

This morning as I was bicycling to the market I was stopped by a member of the faithfull who's daughter had dropped her sweater in the park I was about to enter. She asked me to pick it up and put it on a bush or post so they could collect it later.

As I crossed the park I found the sweater and rather than leave it there where it might blow to the ground again, and figuring they weren't walking that fast I rode back to them and delivered it. This act was met gratitude of course, but the degree of astonishment was also considerable. To me it was a small kindness and took very little effort on my part and I knew from the sad look on the girl's face when they asked me to look for it that it would make her very happy.

Her mother went on and on about how unexpected and kind it was. And it got me thinking. There we were she in her dress and hat on her way to a day of prayer and contemplation, me in my bike kit obviously not of her community on my way to more earthly endeavors. I'm glad that I surprised her. It is not the first time I've had this reaction. As I left the exchange the thought that filled me was how glad I felt that she was off to a day of prayer with a reminder that not all the kind and just in the world belong to her's or necessarily any other faith.

an atheist's letter to the faithful -

Remember me

while you pray in your community of fellow faithful, please take a moment and

remember me

I have helped you when you needed it and will do so again with pleasure

I let you out in traffic during rush hour
return the money you dropped
retrieved your child's lost jumper
picked up a few things for your grandmother next door while I was out shopping
look after her plants while she's away
a thousand little things that I will think nothing of doing

remember me,
when you are surrounded by your community

do not pray for my salvation or conversion to your faith
it will not help and is not wanted
I have searched my heart and mind and soul and found no ability to believe

just remember me

I picked the rubbish up that blew down our street
called the police and waited with you when you were in an accident
helped keep your children calm when you were too shaken

you will not meet me in your church, synagog, temple, mosque or shrine
I will not be sitting next to you there.

but I am in your world and I will help you where I can

I will defend your right to pray in whatever way is right for you
I will defend your right to live by the rules of your heart and your faith
but I will never sit beside you as you do

I will be there to help when you are in need because I know it is right to do so, because that is the rule of my heart.

I sometimes envy you in your secure faith and community as I have never felt that security but wrestle alone with every moral and ethical question. So when you are there remember me.

And when you need me I will help as I can without a second thought or any need of recompense.

just remember me
jespirals: (Default)
What a week!

No.2 son & I went skating on Monday. 2 Months off the ice and it was a slow start, but got most of it back by the end of the hour & a half. Tuesday we walked about 6 miles on Hampstead Heath to meet some other Home Educators at Parliament Hill Fields. We took Poi to play with whilst we waited for everyone else to negotiate the thrills of getting across London during a Tube Strike. We were there about an hour early which gave me time to learn this...
...which left me grinning.

Got home and No.1 son was too knackered from school to go climbing with me :-(
so I made lemon chicken instead :-)
when in doubt ... cook

Wednesday was the usual morning Farmer's Market & groc run. I've been going to the same market for 5 years now and all the stall holders know me. I love knowing the people who produce the food I cook.
But considering it was my birthday I thought I needed to do something more so, as I had been invited, I went to this....
... and drank my way around all the stalls...mmmmm

Staggered home (with lots of free bottles!) and had a cup of tea and a bit of a rest because...

We were destined for mountains of gorgeous sushi that night.

A very different birthday for me as I usually prefer to spend the day on my own, preferably in a boat.
But except for the few hour sojourn into booze-land in the afternoon...
I had a lovely day with the most important men in my life.

Thursday was an adventure as I needed to head to Shoreditch to meet up with my future tutor at...
Yup, taking the plunge and putting a piece of paper behind all the work I've been doing for the last 7 years on Anglo Saxon and Viking instruments.
The meeting went well and he likes my idea of focusing on a particular image, researching and building the instruments it depicts. So I now have an MA program and should have the paper in 2 years (part time).
No.1 son was feeling good after school today so CLIMBING!!!!
It was warm and a little damp on the wall, good for the muscles but not so great for the holds. 3rd time on a wall and I tried some routes rather than just grabbing the easiest/nearest hold. I couldn't complete a route on one colour clean but it certainly showed me the problems to be solved. & I tortured No.1 son by making him touch the top hold before I'd let him down on one ascent :-D ... which of course he then did to me on his next belay.
Worst of all we were playing hookey from his Parent's Back to School Night. But I had gone on my own last year (and hated it completely) and his Dad refused to go this year so..... I sent an appologetic email to his teachers before I went to bed.

Today has been another adventure. No.1 son has been invited to an international theater program but it is close on the heels of another school trip so it required multiple phone calls and plotting. No.2 son needed to be registered for this...
he's a home educated aspie in need of a social world... here's hoping this one works!
then we were off to...
with apples from the garden and a cooperative game to share.

Now No.1 son is home with a friend he met whilst in Vienna with the International Schools Boys Choir....
... and I'm off on my bike to make copies and get my MA application in the post....

and tomorrow I'll be bending an elbow with webcowgirl
jespirals: (Default)
Well he's done it again...
has found yet another way to enable my finely honed time wasting skills.


things I should be doing rather than writing this...

setting up the cupboards for No.2 son's study materials
cleaning - anything
turning the piles of apples into something that won't rot
completing the application for the MA program
ringing education contacts
making appts. for OT assessments
working on any number of half built instruments
practicing the harp
finishing the current book

hmmm maybe a bit of Bejeweled before I move on....
jespirals: (Default)
I was sent a link to someone else's journal on this site and needed to register in order to leave a message.... sigh.

So now that I'm here I thought I might as well stay and write something.

Here's what I'm usually up to
Page generated Sep. 26th, 2017 05:29 am
Powered by Dreamwidth Studios