My Plan For Bad Bank Assets

By TIMOTHY GEITHNER

THE WALL STREET JOURNAL

The American economy and much of the world now face extraordinary challenges, and confronting these challenges will continue to require extraordinary actions.

AP

No crisis like this has a simple or single cause, but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk. Those decisions have caused enormous suffering, and much of the damage has fallen on ordinary Americans and small-business owners who were careful and responsible. This is fundamentally unfair, and Americans are justifiably angry and frustrated.

The depth of public anger and the gravity of this crisis require that every policy we take be held to the most serious test: whether it gets our financial system back to the business of providing credit to working families and viable businesses, and helps prevent future crises.

Over the past six weeks we have put in place a series of financial initiatives, alongside the Recovery and Reinvestment Program, to help lay the financial foundation for economic recovery. We launched a broad program to stabilize the housing market by encouraging lower mortgage rates and making it easier for millions to refinance and avoid foreclosure. We established a new capital program to provide banks with a safeguard against a deeper recession. By providing confidence that banks will have a sufficient level of capital even if the outlook is worse than expected, more credit will be available to the economy at lower interest rates today -- making it less likely that the more negative economy they fear will take place.

Getty Images

We started a major new lending program with the Federal Reserve targeted at the securitization markets critical for consumer and small business lending. Last week, we announced additional actions to support lending to small businesses by directly purchasing securities backed by Small Business Administration loans.

Together, actions over the last several months by the Federal Reserve and these initiatives by this administration are already starting to make a difference. They have helped to bring mortgage interest rates near historic lows. Just this month, we saw a 30% increase in refinancing of mortgages, which means millions of Americans are taking advantage of the lower rates. This is good for homeowners, and it's good for the economy. The new joint lending program with the Federal Reserve led to almost $9 billion of new securitizations last week, more than in the last four months combined.

However, the financial system as a whole is still working against recovery. Many banks, still burdened by bad lending decisions, are holding back on providing credit. Market prices for many assets held by financial institutions -- so-called legacy assets -- are either uncertain or depressed. With these pressures at work on bank balance sheets, credit remains a scarce commodity, and credit that is available carries a high cost for borrowers.

Today, we are announcing another critical piece of our plan to increase the flow of credit and expand liquidity. Our new Public-Private Investment Program will set up funds to provide a market for the legacy loans and securities that currently burden the financial system.

The Public-Private Investment Program will purchase real-estate related loans from banks and securities from the broader markets. Banks will have the ability to sell pools of loans to dedicated funds, and investors will compete to have the ability to participate in those funds and take advantage of the financing provided by the government.

The funds established under this program will have three essential design features. First, they will use government resources in the form of capital from the Treasury, and financing from the FDIC and Federal Reserve, to mobilize capital from private investors. Second, the Public-Private Investment Program will ensure that private-sector participants share the risks alongside the taxpayer, and that the taxpayer shares in the profits from these investments. These funds will be open to investors of all types, such as pension funds, so that a broad range of Americans can participate.

Third, private-sector purchasers will establish the value of the loans and securities purchased under the program, which will protect the government from overpaying for these assets.

The new Public-Private Investment Program will initially provide financing for $500 billion with the potential to expand up to $1 trillion over time, which is a substantial share of real-estate related assets originated before the recession that are now clogging our financial system. Over time, by providing a market for these assets that does not now exist, this program will help improve asset values, increase lending capacity by banks, and reduce uncertainty about the scale of losses on bank balance sheets. The ability to sell assets to this fund will make it easier for banks to raise private capital, which will accelerate their ability to replace the capital investments provided by the Treasury.

This program to address legacy loans and securities is part of an overall strategy to resolve the crisis as quickly and effectively as possible at least cost to the taxpayer. The Public-Private Investment Program is better for the taxpayer than having the government alone directly purchase the assets from banks that are still operating and assume a larger share of the losses. Our approach shares risk with the private sector, efficiently leverages taxpayer dollars, and deploys private-sector competition to determine market prices for currently illiquid assets. Simply hoping for banks to work these assets off over time risks prolonging the crisis in a repeat of the Japanese experience.

Moving forward, we as a nation must work together to strike the right balance between our need to promote the public trust and using taxpayer money prudently to strengthen the financial system, while also ensuring the trust of those market participants who we need to do their part to get credit flowing to working families and businesses -- large and small -- across this nation.

This requires those in the private sector to remember that government assistance is a privilege, not a right. When financial institutions come to us for direct financial assistance, our government has a responsibility to ensure these funds are deployed to expand the flow of credit to the economy, not to enrich executives or shareholders. These provisions need to be designed and applied in a way that does not deter the participation by the private sector in generally available programs to stabilize the housing markets, jump-start the credit markets, and rid banks of legacy assets.

We cannot solve this crisis without making it possible for investors to take risks. While this crisis was caused by banks taking too much risk, the danger now is that they will take too little. In working with Congress to put in place strong conditions to prevent misuse of taxpayer assistance, we need to be very careful not to discourage those investments the economy needs to recover from recession. The rule of law gives responsible entrepreneurs and investors the confidence to invest and create jobs in our nation. Our nation's commitment to pursue economic policies that promote confidence and stability dates back to the very first secretary of the Treasury, Alexander Hamilton, who first made it clear that when our government gives its word we mean it.

For all the challenges we face, we still have a diverse and resilient financial system. The process of repair will take time, and progress will be uneven, with periods of stress and fragility. But these policies will work. We have already seen that where our government has provided support and financing, credit is more available at lower costs.

But as we fight the current crisis, we must also start the process of ensuring a crisis like this never happens again. As President Obama has said, we can no longer sustain 21st century markets with 20th century regulations. Our nation deserves better choices than, on one hand, accepting the catastrophic damage caused by a failure like Lehman Brothers, or on the other hand being forced to pour billions of taxpayer dollars into an institution like AIG to protect the economy against that scale of damage. The lack of an appropriate and modern regulatory regime and resolution authority helped cause this crisis, and it will continue to constrain our capacity to address future crises until we put in place fundamental reforms.

Our goal must be a stronger system that can provide the credit necessary for recovery, and that also ensures that we never find ourselves in this type of financial crisis again. We are moving quickly to achieve those goals, and we will keep at it until we have done so.

Mr. Geithner is the U.S. Treasury secretary.

MUST READ :
The Most Complete Breakdown of AIG/Wallstreet's Con of America
(The Facts You NEVER Hear in MSM)

The Big Takeover
The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution

MATT TAIBBI
Rolling Stone.com

It's over — we're officially, royally fu**ed. No empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.

The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).

So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck — bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: "The marketplace is a pretty crummy place to be right now," he said. "When the world catches pneumonia, we get it too." In a pathetic attempt at name-dropping, he even whined that AIG was being "consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down."

Liddy made AIG sound like an orphan begging in a soup line, hungry and sick from being left out in someone else's financial weather. He conveniently forgot to mention that AIG had spent more than a decade systematically scheming to evade U.S. and international regulators, or that one of the causes of its "pneumonia" was making colossal, world-sinking $500 billion bets with money it didn't have, in a toxic and completely unregulated derivatives market.

Nor did anyone mention that when AIG finally got up from its seat at the Wall Street casino, broke and busted in the afterdawn light, it owed money all over town — and that a huge chunk of your taxpayer dollars in this particular bailout scam will be going to pay off the other high rollers at its table. Or that this was a casino unique among all casinos, one where middle-class taxpayers cover the bets of billionaires.

People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders — people who wear seat belts and build houses on high ground — and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people's money would make his di*k bigger.

That guy — the Patient Zero of the global economic meltdown — was one Joseph Cassano, the head of a tiny, 400-person unit within the company called AIG Financial Products, or AIGFP. Cassano, a pudgy, balding Brooklyn College grad with beady eyes and way too much forehead, cut his teeth in the Eighties working for Mike Milken, the granddaddy of modern Wall Street debt alchemists. Milken, who pioneered the creative use of junk bonds, relied on messianic genius and a whole array of insider schemes to evade detection while wreaking financial disaster. Cassano, by contrast, was just a greedy little turd with a knack for selective accounting who ran his scam right out in the open, thanks to Washington's deregulation of the Wall Street casino. (read rest of article)

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6th Anniversary of the Iraq Invasion

Iraq: Six Long Years of Deception

By: John Bruhns

Iraq War Veteran & Freelance Writer

Six years ago today I was in Kuwait awaiting orders to cross the border into Iraq with the first wave of invading forces. It was predicted that U.S. troops would be greeted as liberators, weapons of mass destruction would be found, and democracy would flourish across the Mideast. What a gross miscalculation of the aftermath. Iraq became a slaughterhouse while political and social unrest emerged here at home.

So many questions remain unanswered. Did the Bush administration knowingly deceive us into an unnecessary war? Did we kill Iraqis to protect America? Did our troops die fighting terrorism? Or was it just for an ideology of a select group of people in power? Was it for oil? Was it all for nothing?

Why do I torture myself with these questions when I already know the answers? I know this was a needless war of choice, but at the same time I just can't fully grasp the abusive political authority exercised by our government.

Many Americans still don't understand the ramifications of the Iraqi occupation. Reason being is that the sacrifice was/is very much unshared. This war has generated great support from people who could serve but don't. So many young able-bodied American males have lobbied for a continuation of the Iraq conflict yet never had the guts to go anywhere near it. On many occasions they've called veterans who have served in Iraq "traitors" for conveying their disillusionment with the war to the public. These cowardly imbeciles view their activity as a substitute for military service. What a crock. My crowd calls them chicken hawks, but that's an understatement. They're one of the worst elements of society. There is nothing American or patriotic about advocating for others to die for your cause while you stay home. They're true followers of Bush and Cheney's foot steps. They can't fade away into obscurity quick enough for me.

The war has caused much bloodshed for the Iraqi people. How many Americans care about that? Not too many. We can't envision a foreign army invading this country and changing our way of life at gunpoint. If the tables were turned we would be out in the streets demonstrating our right to bear arms -- kicking ass and taking names. Would that make us terrorists? Hell no! So why is it shocking that Iraqis have violently resisted our occupation of their country? The human psychology behind this should not be difficult to understand. The fact of the matter is we don't want to accept the reality of the situation.

Imagine if the Russians or the Chinese invaded Iraq and seized control of the oil fields. We would have been singing a totally different song all of these years. We would call it aggression and communism. So what affords us the right to do it?

Our troops and the Iraqi people who've lived through this war will have a lifetime to dwell on it. My hope for the Iraqis is that something good comes out of this catastrophe. That one day Iraq does become a free and peaceful nation. However, I don't see that happening for a long time. As for our troops many return home to families and friends who don't understand and don't want to understand. This pushes our veterans further into isolation from the world they once knew. For some vets the menu of options consists of divorce, suicide, substance abuse, and permanent mental health problems.

No one promises members of the military a rose garden after war. At the same time their government should never abuse them in such a way that we've seen over the last six years. Our military men and women have been used, thrown around, involuntarily extended, stop-lossed, and recalled. How much can we expect from our service people?

Maybe it's time to stop beating this drum and move on. However, if everyone were to do that what's to stop a future president from using our military for his/her own personal agenda? Nothing.

Where does accountability factor in? Sadly, it doesn't. Should Bush and Cheney be prosecuted for their crimes? Absolutely. But it's not going to happen. If you're waiting for Congress or the Justice Department to conduct investigations, hold hearings, and bring charges against the Bush administration don't hold your breath. George W. Bush received overwhelming bi-partisan approval from Congress for his war. He blatantly and repeatedly lied to our faces and we reelected him. Now it's over. Bush and the members of his administration will have the rest of their lives to spend with their children and grandchildren. Kind of ironic since they deprived so many others of that right.

It's frightening that the government of the United States was run by such corrupt leaders for eight years. It's often said that no one is above the law. Well obviously that's not true -- just ask George W. Bush.

I know this comes off as a redundant "Bush bashing" piece. However, who else is to blame on the sixth anniversary of the war? Even though Bush was president he was extremely impressionable and susceptible to peer pressure from Cheney, Rumsfeld, Wolfowitz, and other neocon intellectuals who know nothing about war except for what they read in books. They are so smart they're actually stupid as they demonstrated over and over again.

Hopefully Iraq will teach us what we failed to learn from the war in Vietnam; that we never let it happen again.

We Salute Our Great Soldiers

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VIDEO:

President Obama:

Reaches Out To Iran

THE WHITE HOUSE

Office of the Press Secretary

_________________________________________________________________

March 20, 2009

VIDEOTAPED REMARKS BY THE PRESIDENT

IN CELEBRATION OF NOWRUZ

THE PRESIDENT: Today I want to extend my very best wishes to all who are celebrating Nowruz around the world.

This holiday is both an ancient ritual and a moment of renewal, and I hope that you enjoy this special time of year with friends and family.

In particular, I would like to speak directly to the people and leaders of the Islamic Republic of Iran. Nowruz is just one part of your great and celebrated culture. Over many centuries your art, your music, literature and innovation have made the world a better and more beautiful place.

Here in the United States our own communities have been enhanced by the contributions of Iranian Americans. We know that you are a great civilization, and your accomplishments have earned the respect of the United States and the world.

For nearly three decades relations between our nations have been strained. But at this holiday we are reminded of the common humanity that binds us together. Indeed, you will be celebrating your New Year in much the same way that we Americans mark our holidays -- by gathering with friends and family, exchanging gifts and stories, and looking to the future with a renewed sense of hope.

Within these celebrations lies the promise of a new day, the promise of opportunity for our children, security for our families, progress for our communities, and peace between nations. Those are shared hopes, those are common dreams.

So in this season of new beginnings I would like to speak clearly to Iran 's leaders. We have serious differences that have grown over time. My administration is now committed to diplomacy that addresses the full range of issues before us, and to pursuing constructive ties among the United States , Iran and the international community. This process will not be advanced by threats. We seek instead engagement that is honest and grounded in mutual respect.

You, too, have a choice. The United States wants the Islamic Republic of Iran to take its rightful place in the community of nations. You have that right -- but it comes with real responsibilities, and that place cannot be reached through terror or arms, but rather through peaceful actions that demonstrate the true greatness of the Iranian people and civilization. And the measure of that greatness is not the capacity to destroy, it is your demonstrated ability to build and create.

So on the occasion of your New Year, I want you, the people and leaders of Iran , to understand the future that we seek. It's a future with renewed exchanges among our people, and greater opportunities for partnership and commerce. It's a future where the old divisions are overcome, where you and all of your neighbors and the wider world can live in greater security and greater peace.

I know that this won't be reached easily. There are those who insist that we be defined by our differences. But let us remember the words that were written by the poet Saadi, so many years ago: "The children of Adam are limbs to each other, having been created of one essence."

With the coming of a new season, we're reminded of this precious humanity that we all share. And we can once again call upon this spirit as we seek the promise of a new beginning.

Thank you, and Eid-eh Shoma Mobarak.

END

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THE WHITE HOUSE

Office of the First Lady

________________________________________________________________

March 19, 2009

REMARKS BY THE FIRST LADY

DURING GREETING WITH

WOMEN OF EXCELLENCE

Diplomatic Reception Room

9:35 A.M. EDT

MRS. OBAMA: Just let me say, first of all, thank you. This was one of my dreams, let me just tell you. I couldn't have imagined this a year ago, but as we started moving towards this trajectory, that it became increasingly clear that Barack Obama might be the next President of the United States, and as I started thinking about the kinds of things that I wanted to see happen, this day was one of those things -- gathering an amazing group of women together, and going out, and talking to young girls around this country.

But we're here today. Hopefully we can do more and more of this. But this is part of that dream. And I can't thank you enough for taking the time. These girls are just going to be wild today. (Laughter.)

And our task is really simple, you know -- just to share our stories with them. So many of us will be able to see part of ourselves in these young people, because it's not just young girls that we're seeing today; we're going to see some young men, as well. And our job is really to just share our stories, to make these kids understand that where we stand today is not an impossibility by any stretch of the imagination. Even when no one could have predicted it, many of us have forged a path to some amazing things, and we want to share that with these young people.

And then we're going to get back together this evening with a whole 'nother group of young women, and bring them back to this great house that is America's house. Many young people will have never set foot in this place, never could have imagined that they'd be dining in the East Room with so many great people who will be joined by even more women. But just imagine what they're going to feel like at the end of this day. And then we can do this again and again and again. (Laughter and applause.)

Our job is simple: Just be open, be honest, be real, be clear, and have fun. (Laughter.) Well, you know, we have got a President here. So many of you have helped us come to this place. And our job now is to give back and to keep giving back.

And the D.C. community, many of these schools need to see us, they need to be reminded, because some of these schools are struggling even today. Even though they've got this wonderful image of the White House, they need to be reminded that we are -- we're close, this isn't a distant relationship; that they can imagine the people who live here and what goes on here, and that there's a close connection between their lives and ours. And there's nothing more powerful than going into their states and having that kind of conversation.

And that's what today is all about. It is National Women's History Month, but again, we're not just talking about women; we are talking about our young people throughout.

So I want to thank you from the bottom of my heart for coming together this quickly, and taking the time, a whole day out of your lives -- (laughter) -- to share this day with me. So thank you all. (Applause.)

END

B4B

House Passes Bill Taxing AIG

and Other Bonuses

Stephen Ohlemacher

WASHINGTON — The Democratic-led House overwhelmingly approved a bill on Thursday to slap punishing taxes on big employee bonuses from AIG and other firms bailed out by taxpayers. The vote was 328-93. "We want our money back and we want our money back now for the taxpayers," said House Speaker Nancy Pelosi, D-Calif.

The bonuses, totaling $165 million, were paid to employees of troubled insurer American International Group, including to traders in the unit that nearly brought about the company's collapse.

In all, 243 Democrats and 85 Republicans voted "yes" on the bill. It was opposed by six Democrats and 87 Republicans.

The margin of victory came despite sharp Republican attacks calling the legislation a legally questionable ploy to paper over Obama administration missteps.

Minority Leader John Boehner, R-Ohio, said the bill was "a political circus" diverting attention from why the administration hadn't done more to block the bonuses before they were paid.

However, although a number of Republicans cast "no" votes against the measure at first, there was a heavy GOP migration to the "yes" side in the closing moments.

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Flashback: It Was Bush, GOP

That Opposed Executive Compensation Caps

By Sam Stein

It is a rather curious spectacle to see congressional Republicans express outrage at the exorbitant bonuses being handed out by bailed-out companies and blame the Obama administration for failing to curb the practice with AIG. Because when the first installment of the Troubled Asset Relief Program was passed it was the Bush administration and GOPers in Congress who were insisting that caps on executive compensation not be part of the legislation.

As the New York Times reported at the time that TARP was being crafted, "Congress and the administration remained at odds over the demands of some lawmakers, including limits on the pay of top executives whose firms seek help."

Former Treasury Secretary Hank Paulson said that while he was upset with the levels of salary afforded to top executives, any cap on such would dissuade companies from participating in the TARP.

"If we design it so it's punitive and so institutions aren't going to participate, this won't work the way we need it to work," he told Fox News Sunday on September 21.

Senator Richard Shelby, the top Republican on the Senate Banking Committee, told CBS news that: "It should be up to the board of directors of a private corporation to set the compensation of an executive; it shouldn't be Congress's role."

Senator Mel Martinez told CNBC that: "While it is very appealing to think about executive compensation as being a part of this, one of the drawbacks to that is perhaps that we would have fewer entities participate in what is essentially a voluntary act."

And House Minority Whip Eric Cantor, "outraged" over AIG's issuance of $165 million in bonuses, said he was not in favor of "the federal government be[ing] able to set salaries across the board," when the issue of executive compensation arose in September 2008.

The issue extended to when the Obama administration was tasked with writing its own version of the TARP. Senate Minority Leader Mitch McConnell, likewise dismayed over AIG's bonuses this past week, said back in early February that while he was "appalled" at some of the perks executives had received, he did want "the government to take over these businesses and start telling them everything about what they can do."

That said, the Obama administration too was pushing back against overly-strict caps on executive earning albeit still favoring some form of limitation.

Of course, a distinction could be made between executive compensation and issuance of bonuses. One being salary, the other being rewards. But in this and other cases, money is fungible. And back when the Troubled Asset Relief Program was being debated, it was the leadership of the GOP and the past administration that asked that the issue not be touched for fear that it would derail the legislation.

It was, after all, President Bush who warned lawmakers not to "insist on provisions that would undermine the effectiveness of the plan" while Barney Frank, chairman of the House banking committee, declared that there would be "no golden parachutes while we are the owners" of the bad assets of Wall Street firms.

(Hat tips to Think Progress and Dana Milbank)

Help Share TRUTH !

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Cuomo Reveals AIG Details:
"numerous individuals who received large 'retention' bonuses
are no longer at the firm."

(B4B Note: I Smell HUSH MONEY) !

(HuffPost) AIG's assertion that it had no choice but to make multi-million dollar bonus payments was undercut this afternoon by New York Attorney General Andrew Cuomo, who revealed new details about the now-infamous pay packages.

Cuomo reveals that 73 individuals received bonuses of $1 million or more, with one recipient getting a bonus of more than $6.4 million.

According to Bloomberg News, AIG has "also budgeted $57 million in "retention" pay for employees who will be dismissed, according to a March 2 filing to the Securities and Exchange Commission."

AIG planned to award about 4,600 of its managers and employees a total of about $1 billion, Bloomberg News reported in January, citing two people familiar with the situation. In addition to $450 million for employees in the financial products unit that sold credit-default swaps, AIG was to give about $470 million to staff of three other subsidiaries and $148 million to top executives, according to the people and company filings.

Of the $450 million for the financial products unit, the $165 million in retention pay was for 2008 and due to be paid by March 15, $55 million was paid in December and an additional $230 million was originally earmarked for 2009 retention payments. Liddy has said he wants to reduce the 2009 payments by at least 30 percent.

In particular, Cuomo takes aim at AIG's rationale for distributing more than $160 million in retention payments to members of its Financial Products subsidiary, "the unit of AIG that was principally responsible for the firm's meltdown," according to a letter sent by Cuomo to Barney Frank, chairman of the House Committee on Financial Services.

Though AIG has stressed that payments were essential to retain individuals at Financial Products vital to unwinding the subsidiary business, Cuomo notes that "numerous individuals who received large 'retention' bonuses are no longer at the firm."

Cuomo's office also learned more details about the bonuses:

• The top recipient received more than $6.4 million;
• The top seven bonus recipients received more than $4 million each;
• The top ten bonus recipients received a combined $42 million;
• 22 individuals received bonuses of $2 million or more, and combined they
received more than $72 million;
• 73 individuals received bonuses of $1 million or more; and
• Eleven of the individuals who received "retention" bonuses of $1 million
or more are no longer working at AIG, including one who received $4.6
million;

Again, these payments were all made to individuals in the subsidiary whose performance
led to crushing losses and the near failure of AIG. Thus, last week, AIG made more than 73
millionaires in the unit which lost so much money that it brought the firm to its knees, forcing taxpayer bailout. Something is deeply wrong with this outcome. I hope the Committee will
address it head on.

We have also now obtained the contracts under which AIG decided to make these
payments. The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the Spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before. My Office has thus begun to closely examine the circumstances under which the plan was created.

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VIDEO:
President Obama's Response To AIG Bonuses
Blames "Recklessness and Greed"

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VIDEO:
MSNBC's Rachel Maddow
Reviews AIG Pathetic Greed !

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President Obama to Unveil Plan to

Boost Small-Business Lending

By Kim Chipman

March 15 (Bloomberg) -- President Barack Obama will spend more than half of the $730 million in government funds set aside to help small businesses to expand federal guarantees and lower lending fees to try to revive the flow of credit, people familiar with the matter said.

Obama and Treasury Secretary Timothy Geithner will announce the $375 million plan tomorrow as part of a strategy to bolster Small Business Administration lending, the people said. The money will come from the $787 billion economic stimulus plan Congress passed last month.

Obama also will announce his intention to spend more than $10 billion in an effort to unlock the secondary credit market and increase bank liquidity, the people said. White House officials are trying to counter criticism in Congress that a $700 billion financial rescue plan is benefiting mostly banks rather than consumers or non-financial companies. Banks are still hoarding cash after $1.2 trillion in writedowns and losses since 2007.

“We know that small businesses are the engine of growth in the economy, and we absolutely want to do things to help them,” Christina Romer, who heads Obama’s Council of Economic Advisers, said on NBC’s “Meet the Press” today. “Because we know we’re doing a lot of help for banks. We’re doing a lot of help for homeowners. Small-business people need it, too.”

Under the new program, SBA will guarantee as much as 90 percent of loans, up from 85 percent for those under $150,000 and 75 percent for larger ones, the person said.

Job-Growth Engine

Romer also said that the Obama administration is succeeding in its fight against the economic decline and predicted the stimulus plan will revive growth.

Obama says ensuring the stability of small businesses is crucial because they are an engine for job growth. Yet many such companies are struggling as credit has dried up. The Small Business Administration typically guarantees $20 billion a year in loans, though new lending is on track to fall below $10 billion this year, the people said, citing the administration’s data.

U.S. gross domestic product is forecast to contract this quarter after shrinking at a 6.2 percent annual pace from October to December, the most since 1982. The jobless rate climbed to 8.1 percent last month as U.S. employers cut 651,000 workers from payrolls.

Geithner has said the administration’s financial rescue efforts will be aimed at restoring capital to banks that need it and trying to resuscitate consumer loan markets.

“By increasing the federally guaranteed portion of SBA loans, and giving more power to the SBA to expedite loan approvals, we believe we can turn around the dramatic decline in SBA lending we have seen in recent months,” Geithner said in a Feb. 10 speech.

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Barney Frank On AIG

"Time To Fire Some People" !

WASHINGTON — Rep. Barney Frank charged Monday that a decision by financially strapped insurance giant AIG to pay millions in executive bonuses amounts to "rewarding incompetence."

Echoing outrage expressed on both sides of the political aisle in the wake of revelations that American International Group will pay roughly $165 million in bonuses, Frank said he believes it's time to shake up the company.

"These people may have a right to their bonuses. They don't have a right to their jobs forever," said Frank, a Massachusetts Democrat who is chairman of the House Financial Services Committee.

Appearing on NBC's "Today" show, Frank noted that the Federal Reserve Board, using a Depression-era statute, was the institution that gave AIG its initial government bailout, before Congress passed legislation providing for additional assistance. He said he did not think sufficient safeguards were built into that initial bailout by the Fed.

The $165 million was payable to executives by Sunday and was part of a larger total payout reportedly valued at $450 million. The company has benefited from more than $170 billion in a federal rescue.

AIG reported this month that it had lost $61.7 billion for the fourth quarter of last year, the largest corporate loss in history. The bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.

It also was revealed over the weekend that American International Group Inc. used more than $90 billion in federal aid to pay out foreign and domestic banks, some of whom had received their own multibillion-dollar U.S. government bailouts.

Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks _ France's Societe Generale at $11.9 billion, Germany's Deutsche Bank at $11.8 billion, and Britain's Barclays PLC at $8.5 billion. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion as of Dec. 31.

The money went to banks to cover their losses on complex mortgage investments, as well as for collateral needed for other transactions.

On ABC's "Good Morning America" Monday, Sen. Richard Shelby said Congress must do everything it can to make sure the government money going to AIG is handled appropriately.

"We ought to explore everything that we can through the government to make sure that this money is not wasted," the Alabama Republican said. "These people brought this on themselves. Now you're rewarding failure. A lot of these people should be fired, not awarded bonuses. This is horrible. It's outrageous."

Frank said he was disgusted, asserting that "these bonuses are going to people who screwed this thing up enormously."

"Maybe it's time to fire some people," he said. "We can't keep them from getting bonuses but we can keep them from having their jobs. ... In high school, they wouldn't have gotten retention (bonuses), they would have gotten detention."

AIG has agreed to Obama administration requests to restrain future payments. Treasury Secretary Timothy Geithner pressed the president's case with AIG's chairman, Edward Liddy, last week.

"He stepped in and berated them, got them to reduce the bonuses following every legal means he has to do this," said Austan Goolsbee, staff director of President Barack Obama's Economic Recovery Advisory Board.

Lawrence Summers, a leading Obama economic adviser, said Sunday that Geithner had used all his power, "both legal and moral, to reduce the level of these bonus payments."

In an interview that aired Sunday on CBS' "60 Minutes," Federal Reserve Chairman Ben Bernanke did not address the bonuses but expressed his frustration with the AIG intervention.

"It makes me angry. I slammed the phone more than a few times on discussing AIG," Bernanke said. "It's _ it's just absolutely _ I understand why the American people are angry."

In a letter to Geithner dated Saturday, Liddy said outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

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Presidential Notice and Message
on Iranian Sanctions

THE WHITE HOUSE

Office of the Press Secretary

March 11, 2009

TO THE CONGRESS OF THE UNITED STATES:

Section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)) provides for the automatic termination of a national emergency unless, prior to the anniversary date of its declaration, the President publishes in the Federal Register and transmits to the Congress a notice stating that the emergency is to continue in effect beyond the anniversary date. In accordance with this provision, I have sent the enclosed notice to the Federal Register for publication, stating that the Iran emergency declared on March 15, 1995, is to continue in effect beyond March 15, 2009.

The crisis between the United States and Iran resulting from the actions and policies of the Government of Iran that led to the declaration of a national emergency on March 15, 1995, has not been resolved. The actions and policies of the Government of Iran are contrary to the interests of the United States in the region and pose a continuing unusual and extraordinary threat to the national security, foreign policy, and economy of the United States. For these reasons, I have determined that it is necessary to continue the national emergency declared with respect to Iran and maintain in force comprehensive sanctions against Iran to respond to this threat.

BARACK OBAMA

THE WHITE HOUSE,
March 11, 2009.
# # #

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(First Lady Michelle Obama joins in the applause at the Executive Order signing ceremony
Wednesday, March 11, 2009 in the East Room of the White House, creating the White House Council on Women and Girls.
White House Photo/Pete Souza)

“Opportunities their mothers and grandmothers and great grandmothers never dreamed of”

WHITE HOUSE

A little while ago the President signed an Executive Order to ensure there is always an eye kept on how every government agency is addressing the challenges confronted by women of all ages. The White House Council on Women and Girls will be chaired by Senior Advisor Valerie Jarrett, with Director of Public Liaison Tina Tchen serving as Executive Director, and will made up of Cabinet Secretaries and other top White House staff. It will begin its work immediately by asking each agency to analyze their current status and ensure that they are focused internally and externally on women.

During its first year, the Council will also focus on formulating comprehensive, coordinated policies in the following areas:

• Improving women’s economic security by ensuring that each of the agencies is working to directly improve the economic status of women.
• Working with each agency to ensure that the administration evaluates and develops policies that establish a balance between work and family.
• Working hand-in-hand with the Vice President, the Justice Department’s Office of Violence Against Women and other government officials to find new ways to prevent violence against women, at home and abroad.
• Finally, the critical work of the Council will be to help build healthy families and improve women’s health care.

President Obama opened his remarks speaking about the women in his life, before signing the Executive Order to put it all in motion:

I sign this order not just as a President, but as a son, a grandson, a husband, and a father, because growing up, I saw my mother put herself through school and follow her passion for helping others. But I also saw how she struggled to raise me and my sister on her own, worrying about how she'd pay the bills and educate herself and provide for us.

I saw my grandmother work her way up to become one of the first women bank vice presidents in the state of Hawaii, but I also saw how she hit a glass ceiling -- how men no more qualified than she was kept moving up the corporate ladder ahead of her.

I've seen Michelle, the rock of the Obama family -- (laughter) -- juggling work and parenting with more skill and grace than anybody that I know. But I also saw how it tore at her at times, how sometimes when she was with the girls she was worrying about work, and when she was at work she was worrying about the girls. It's a feeling that I share every day.

And he closed his remarks on the same note:

So now it's up to us to carry that work forward, to ensure that our daughters and granddaughters have no limits on their dreams, no obstacles to their achievements -- and that they have opportunities their mothers and grandmothers and great grandmothers never dreamed of. That's the purpose of this Council. Those are the priorities of my presidency. And I look forward to working with all of you to fulfill them in the months and years to come.

All right, so I'm going to go sign this thing. Thank you very much.

Read more, including the full list of initial members, in the official release.

Be Inspired...Be Informed...Be Involved !

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