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Financial Planning > Behavioral Finance

Tar And Feathers

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One hates to disappoint loyal readers. So, for those of you who expected me to celebrate (gloat) over the results of the presidential election, here is my reaction (preferably sung in a lusty voice while dancing and snapping fingers): Yes! Yes! Oh yes! Yes, yes, yes! Oh yes! Oh yes! Yes! Oh yes!

Whew! A few years ago I could have gone on for paragraph after paragraph, but celebrating isn’t as easy as it used to be. Could be that age has something to do with it (doubtful); more likely is the realization that the mess awaiting Mr. Obama’s attention is undoubtedly the most staggering that any president has had to face since FDR in 1933. Thus is my exultation somewhat tempered.

I don’t think we’re anywhere near the end of this ongoing disaster and the scary thing is that probably no one (including the guys at Treasury who are doling out the billions in bailout funds) really knows the depth or breadth of the rot that has eaten away at the foundation of our financial system like some kind of economic leprosy gone wild.

One interesting byproduct of the financial collapse, however, is a unique astronomical discovery. Never before was it thought possible for a black hole to exist on a planet. The only black holes known were thought to exist only in space as a result of a star collapsing. Their unique property, of course, is that anything that comes within their gravitational pull gets sucked in, never to be seen again.

Well, the financial implosion has made apparent that a black hole does indeed exist right here on the third planet from the sun and its name is American International Group. Any money that comes anywhere near the vicinity of AIG is sucked in, never to be seen again. $85 billion? Bye-bye. $123 billion? So long. We’re up to $150 billion to save this company, folks, and still going strong! Say sayonara to that too!

I sure wouldn’t mind seeing some former AIG executives sucked into the black hole, never to be seen again. But first I’d like to tar and feather them, retrieve every single bonus dollar they ever made and then put their house(s) in foreclosure. And that’s just for starters!

I don’t care how irrational it seems, I want executives who were running this company to pay for their massive incompetence and arrogance in a very public and humiliating way. Never mind going before Congressional panels and getting lashed by senators and representatives whose egos are only slightly less bloated than the bonuses that hedge fund managers used to rake in once upon a time. A couple of hours of withstanding outrage, sarcasm and insufferable self-righteousness do not seem to me to be sufficient penalty for what these executives perpetrated at AIG.

I certainly hope that federal authorities, who can be so assiduous in rounding up refugees from South of the Border, are now turning their attention to AIG to uncover any indication of fraud, with the idea of prosecuting should such be found.

AIG has tainted all insurance companies, never mind that it was the holding company that indulged in shenanigans like credit default swaps. For most people, including the Congressmen who’ll be overseeing the institution of a brand new regulatory system, that is a distinction without a difference.

Anyone who prizes what this industry stands for should be outraged at the damage AIG has done to it, and that includes those who have been plumping for federal oversight, which is likely to be the result of the meltdown.

So let’s make a deal: You bring the feathers, I’ll bring the tar.

Steve Piontek



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