….they are ideologically aligned with the industry. They want to believe that the free market system can and should work in this country, like it does in other industries. So they don’t understand from an insider’s perspective like I have, what that actually means, and the consequences of that to Americans. ~ Wendell Potter, former Insurance PR Exec.
Recently Vanity Fair editor Graydon Carter and V.F. contributing editor Michael Lewis sat together onstage in front of an intimate crowd at the Museum of Modern Art in New York City and discussed Lewis’s new book, The Big Short: Inside the Doomsday Machine, which tackles the question of what caused the U.S. economy to tank.
You will probably get sucked into Lewis’s hour-long talk, just as the House Republican book group became engrossed in a lecture Lewis gave about the financial collapse. “I was supposed to be there for an hour,” says Lewis in the clip above, referring to his visit with the Hill staffers. “I was there for almost three. And nobody left. And their questions were increasingly: ‘Oh my God, Goldman Sachs did what? A.I.G. did what?’ They didn’t understand it … The minute they started to understand, they were outraged. And I think the more things are explained, the more outraged people will get.” Continue reading “About the financial crisis and free market ideology. Author Michael Lewis mocks House GOP book club.”
Here at Slabbed, Nowdy and I have split the workload, with me taking press relations and her doing most of our legal profession outreach. From the time of Nowdy’s first post on Maralou Richards last February I figured this unique case would certainly cross over into the traditional media. Time would prove my instincts rights…..just that none of the reporters I emailed with the details would be the one to bring this story to the realm of the mass media. Rather it was journalist that I was previously unfamiliar, Jeff Amy at the Mobile Press Register, that saw the implications and penned a story that well encapsulates the struggles of ordinary policyholders in a legal system that is completely stacked against them. Jeff’s story appears today in both the Mobile Press Register and it’s sister newspaper the Mississippi Press. On behalf of Nowdy and the Slabbed nation we welcome Jeff to the post Katrina party:
It was just another in the rush of federal suits against Mississippi insurers last August, just before the three-year statute of limitations after Hurricane Katrina expired.
Except it wasn’t. Without a lawyer, then-77-year-old Maralou Richards of Ocean Springs filed a handwritten complaint against a unit of AIG, at the time the world’s largest insurance company.
Richards made a confidential settlement in June with Lexington Insurance Co., the court record shows.
The Treasury’s chief watchdog for the U.S. financial rescue program is probing whether American International Group Inc. paid more than necessary to banks including Goldman Sachs Group Inc. after the insurer’s bailout.
Neil Barofsky, special inspector general for the Troubled Asset Relief Program, opened an audit last week into whether there were attempts made by New York-based AIG or the government to reduce the payments, according to an April 3 letter to Representative Elijah Cummings. The Maryland Democrat had requested the probe last month along with 26 other members of Congress.
Lawmakers, frustrated with the cost of an AIG bailout that has expanded three times, have asked why about $50 billion was paid after the initial September rescue to banks that bought credit-default swaps from the firm. The audit will reveal who made “critical decisions” regarding the payments and provide an explanation for the actions, Barofsky said.
“To what extent did AIG pay counterparty claims at 100 percent of face value and was any attempt made to renegotiate and close out these claims with ‘haircuts?’” Barofsky wrote. “Questions concerning whether AIG paid more than necessary to counterparties and whether Treasury adequately monitored such payments are clearly relevant.” Continue reading “BREAKING: TARP IG Opens AIG Bank Payments Probe”
Dr Ed Duett of Mississippi State has all the finest insurance crooks coming to speak at MSU’s annual insurance day set for April 23, 2009. Our readers may recall he brought in Rossie for I day 2008. This year’s list of crooks and charlatans is very impressive and includes a record number of participants with ties to companies under current federal investigation and/or hogs at the taxpayer TARP trough. The complete speaker list is here but I thought I’d summarize the various sessions for our reader’s convenience:
The Revolving Door Panel:
Mike Chaney, MS DOI
Jim Ridling, AL DOI
Scott Richardson, SC DOI
George Dale, Adams and Reese
Walter Bell, Chairman of Swiss Re America
What happened to Robert Wooley?
The White Collar Crime Panel:
Walter Bell, Chairman of Swiss Re America
Jay Barbour, Carroll, Warren & Parker
Lorrie Brouse, Regional Counsel, Allstate
Steve Iler, President, AIG Claims
Wade Sweat, Copeland, Cook, Taylor & Bush
The Policyholders, what policyholders? You mean those schmucks? Panel:
In fact, our investigation suggests that by the time AIG had entered the CDS fray in a serious way more than five years ago, the firm was already doomed. No longer able to prop up its earnings using reinsurance because of growing scrutiny from state insurance regulators and federal law enforcement agencies, AIG’s foray into CDS was really the grand finale. AIG was a Ponzi scheme plain and simple, yet the Obama Administration still thinks of AIG as a real company that simply took excessive risks. No, to us what the fraud Bernard Madoff is to individual investors, AIG is to the global financial community.
As with the phony reinsurance contracts that AIG and other insurers wrote for decades, when AIG wrote hundreds of billions of dollars in CDS contracts, neither AIG nor the counterparties believed that the CDS would ever be paid. Indeed, one source with personal knowledge of the matter suggests that there may be emails and actual side letters between AIG and its counterparties that could prove conclusively that AIG never intended to pay out on any of its CDS contracts.
Song Jimmie Rodgers
Lyrics by Sop81_1
Performed by: Maurice “Hank” Greenberg, Ronald E. Ferguson, Robert D. Graham and Christopher P. Garand, and Christian M. Milton
Special Guest Yodelers: Warren Buffet, Tim Balducci, Steve Patterson, Joey Langston and Dick Scruggs
I had a friend named Ramblin’ Ron
Who used to steal gamble and rob
He thought he was the smartest guy in town
But I found out last Monday
That Ron got locked up Sunday
They’ve got him in the jailhouse way down town
He’s in the jailhouse now he’s in the jailhouse now
I told him once or twice quit playin’ cards and shootin’ dice
He’s in the jailhouse now Continue reading “Oh Insurer Where Art Thou Part 5: In the Jailhouse Now”
Poor Chri$ Dodd just can’t seem to stay out of the news these days. Not only did Pacman like taking the corporate ca$h from Wall Street stalwarts like AIG it seems the execs at AIG circa 2006 decided he needed their personal help as well so the email blast at AIG financial products went out. The Washington Times has the story:
(h/t Alan at Yall for the link). Yesterday, thanks to the C-L story on the topic of multiperil insurance we found Mississippi’s own Rep Greg Harper has signed on to Gene’s bill joining Travis Childers as co-sponsors of HR 1264. Bennie Thompson has yet to sign on. Looking at the list of co sponsors at Gene’s congressional website we find a very diverse group of people (just like here at slabbed) in support of the multi peril concept. In addition to the newest announcements we see conservatives such as NOLA area Republican Rep Steve Scalise to Democratic Representatives Alcee Hastings and Sheila Jackson Lee have also signed on to HR 1264.
Over the past two years I’ve met, shook hands and briefly conversed with more US House members than I can remember at Gene’s Bay St Louis town hall meetings. Two from last year that came to the Bay and “talked a good game” were New York’s Steve Israel and Connecticut’s John Larson. For the slabbed it is put up or shut up time and we’re paying attention to the House members that sign up and the ones who talk a good game. We’re also paying attention to our own US Senator Roger Wicker who appears to be doing a tap dance instead of working this issue from the Senate side. Deborah Barfield has the Clarion Ledger story:
Banking on public outrage against insurance companies, 4th District Rep. Gene Taylor says his bill to add wind coverage to the federal flood-insurance program stands a better shot at passage this Congress.
“I would think that if there is ever a time to convince our fellow congressmen to rein in this industry, it’s now,” said Taylor, a Democrat.
Taylor reintroduced a bill this month that would expand the federal flood-insurance program to include wind coverage, which supporters say is important to homeowners in areas hit by hurricanes.
The bill, called the Multiple Peril Insurance Act, would allow homeowners who buy federal flood insurance to also purchase wind coverage.