He’s backkkkkkkkkkk Steve shuts down Yahoo! ALL plus Monday Music

Guess who just got back today?
Them wild-eyed boys that had been away
Haven’t changed, haven’t much to say
But man, I still think them cats are crazy

They were asking if you were around
How you was, where you could be found
Told them you were living downtown
Driving all the old men crazy

The boys are back in town

(H/T Steve)

SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages
FOR IMMEDIATE RELEASE

2010-59

Washington, D.C., April 16, 2010 — The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.

“This is a relationship built on mutual trust and confidence. Time and again, our Goldman Sachs colleagues have shown that they have the best interests of Allstate at heart.” Ed Liddy.

The Allstate Corporation Continue reading “He’s backkkkkkkkkkk Steve shuts down Yahoo! ALL plus Monday Music”

Breaking: SEC Charges Subprime King Angelo Mozilo with Civil Fraud

This post is a personal indulgence. Though the Yahoo board is long gone and $30 puts a distant memory I’ll never forget “Quislingman”, Pete Frampton Live, Subprime Usury Scam, and the rest of the gang. I sometimes wonder what ever happened to the bean counter from Jersey who was recommending CFC to his brokerage clients. The difference between Benjamin Graham and that fellow was that Ben could actually spot an undervalued stock. Yahoo! Finance has the A/P story:

The government is charging Angelo Mozilo, the former chief executive of mortgage lender Countrywide Financial Corp., and two other company executives with civil fraud.

The Securities and Exchange Commission’s case also accuses Mozilo of illegal insider trading, an agency spokesman said Thursday. Continue reading “Breaking: SEC Charges Subprime King Angelo Mozilo with Civil Fraud”

Moral Hazard? Slabbed wipes our a$$ with Moral Hazard Part 2 Contract Sanctity: Millions for Executive Bonuses, Screw the policyholders

In America, when you owe people money, you pay them.

Ed Liddy, CEO of AIG

It was the greatest company in history. In the insurance industry, there wasn’t anything like it.

Maurice ‘Hank” Greenberg taking credit for all the good at AIG and none of the bad.

Today we’ll continue analyzing the concept of Moral Hazard in the context of rule of law as differences in how contracts are honored are compared and contrasted. The result, as illustrated by Hurricane Katrina’s aftermath is that some contracts are more “sanctified” than others. Those who have been screwed by big insurance, especially AIG, knew immediately Ed Liddy wasn’t talking about their contracts when he was trying to fleece taxpayers  into paying those executive bonuses using that bogus rule of law argument.

Claims handing at AIG has enjoyed the reputation of being the most hard nosed, despicable sum bitches in the industry and Mr Greenberg deserves that credit too. People across the country have been shafted from small auto claims to large Katrina related homeowner claims so I was not surprised to see AIG once again in the news for shafting government contractors badly hurt in Iraq. We’ll start with a story from last August in the Charleston Gazette on Stan White’s troubles collecting from AIG unit American General Life Insurance Company:

The parents of an Iraq war veteran who died in his sleep in February while recovering from post-traumatic stress disorder have sued his insurance company after it refused to pay his life insurance.

In a lawsuit filed in Kanawha Circuit Court in July, Stan and Shirley White of Cross Lanes maintain that Houston-based American General Life Insurance Co. wrongly denied them the proceeds from their youngest son’s life insurance policy. Continue reading “Moral Hazard? Slabbed wipes our a$$ with Moral Hazard Part 2 Contract Sanctity: Millions for Executive Bonuses, Screw the policyholders”

kudos for Wilson – not yet

Regulate me, please, the opinion column written by Allstate CEO Tom Wilson, appeared in the April 15 NYT in the guise of Wilson’s on-going effort to garner support for national regulation of the insurance industry.

Calling  it his CDS mea culpa, Option ARMageddon gave Wilson “kudos” for coming clean:

My company, Allstate, serves more than 17 million American households.  While we played only a small role in unregulated insurance markets, we have a duty to help stabilize the financial system. It was, after all, an insurance product that contributed to the risk that almost brought down the global economy.

New York State’s Insurance Superintendent, Eric Dinallo, on the other hand, had no kudos to offer:

“While the credit default swap market is not regulated, insurance company use of credit default swaps is,” Mr. Dinallo said in a statement. “In New York, no insurance company can use credit default swaps except under very specific and limited ways and only with approval.”

Was Option ARMageddon spot on or was Wilson’s agenda to set up Dinallo and DOI to the advantage of his efforts to secure national regulation of the insurance industry?  Dinallo’s press release suggests Wilson may have had another agenda – one that would lead to Hank Greenberg, AIG, and, perhaps, other insurers. Continue reading “kudos for Wilson – not yet”

SLABBED Daily – April 17

So, how’s your Friday? Mine started with Sop “feeling fortish (as in OLD) which made tired “fiftish” me feel ancient!   However, before I could decide if tired felt different at any age, I found this.

Edward M. Liddy, the dollar-a-year chief executive leading the American International Group since its bailout last fall, still owns a significant stake in Goldman Sachs, one of the insurer’s trading partners that was made whole by the government bailout of A.I.G.

Mr. Liddy earned most of his holdings in Goldman, worth more than $3 million total, as compensation for serving on the bank’s board and its audit committee until he stepped down in September to take the job at A.I.G. He moved to A.I.G. at the request of Henry M. Paulson Jr., then the Treasury secretary and a former Goldman director.

Men with the Gold-man-Sachs to profit at the expense of the American people make me angry Continue reading “SLABBED Daily – April 17”

More on $enator Chri$ Dodd’$ Relation$hip with AIG and Countrywide’$ Angelo Mozilo. Liddy educates WaPo readers on contract sanctity

I noted Time Magazine has come out with a list of the guilty in their 25 People to Blame for the Financial Crisis. This topic is special to me in a personal way and I’m reminded of a conversation I had with a reporter Tuesday as we discussed the now locally infamous Shred-it Trucks that became parking lot fixtures at the local State Farm offices in the spring of 2006. Steve took pictures but not for this blog as we had no concept of slabbed in those days. Rather he gave the pictures to former SKG lawyer Zach Butterworth. In that sense we feel some ownership for that piece of news, no doubt the same sense of ownership felt by the Rigsby sisters who saw from the inside what was being fed into the shredder.

Similarly Russell, Steve and I feel a similar ownership on that subprime thang as we were posters on the Countrywide Yahoo board at that time. It was Katrina that landed the company on my radar screen as I was surprised to learn some friends that had their mortgage with them could not get their insurance money released so they could repair their house. In fact Countrywide (CFC) was holding far more of their insurance money than they owed on their mortgage. I’m a sucker for this type of stuff so I alerted Steve and Russell and the cyber attack began.  We made short work of CFC that day and my friend had their insurance money back the next day.  Others saw those posts and one reporter asked some questions.  Two weeks later this story appeared on page C-1 of the Wall Street Journal. Evidently someone at LSU thought enough of the article to copy it to a word doc where it resides today for all to see (it is still in the WSJ archives and a PDF I kept as well) and it is there we’ll begin as we explore what kind of company Senator Chris Dodd keeps:

Hurricane Victims Battle Banks — Gulf Coast Residents Complain Lenders Hold Insurance Money While Demanding Late Payments
The Wall Street Journal
April 27, 2006
By Valerie Bauerlein

AS HOMEOWNERS along the Gulf Coast try to recover from the devastation of hurricanes Katrina and Rita, some say mortgage lenders are refusing to turn over insurance proceeds while demanding immediate payment on overdue loans.

Hurricane victims in Louisiana and Mississippi have filed nearly 1,000 complaints with state regulators claiming mistreatment by mortgage lenders. About 800 of the complaints have been resolved, often as a result of mediation initiated by regulators.

Jim Wolf of Pass Christian, Miss., a DuPont Co. technician currently living in a company trailer, for example, wanted to use proceeds of an insurance settlement for a down payment on a new home. On Dec. 10, he sent his $40,000 insurance settlement check to giant Countrywide Financial Corp. to pay off $5,000 remaining on the mortgage of his destroyed home, expecting to get $35,000 back. He said he called Countrywide, based in Calabasas, Calif., every business day for a month, spoke to a dozen representatives and couldn’t get the balance returned. Continue reading “More on $enator Chri$ Dodd’$ Relation$hip with AIG and Countrywide’$ Angelo Mozilo. Liddy educates WaPo readers on contract sanctity”

In bailout bonus burnout, country-come-to-town meets ghetto

Over at the Allstate finance board, they call it bonusgate; but, whatever you call it, keeping up with the news of it can lead to complete and total exhaustion.  It’s all the jumping to conclusions that really wears you out, particulary when the part of you not tracking the news is trying to work.

Our good friend Sup, the hands-down favorite insurance person of the SLABBED, thinks a lot of Ed Liddy.  Sup has said in the past that Liddy goes all out supporting his employees. I don’t doubt that – not any more.

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. Continue reading “In bailout bonus burnout, country-come-to-town meets ghetto”

that special relationship of trust and a deep sense of betrayal

Insurance is a very special product. You pay and you pay and you pay premium dollars, often for your entire life. In return you only get a promise. A promise that if you ultimately have a covered claim, and you’re paid up, they must pay that claim. The problem is that they must have that money, for years and years, kept safely and invested legally in order to be able to pay your claim if they so choose. It’s that special relationship of trust that imposes on an insurance company an obligation of truthful financial reporting in their financial statements.

If you, too, consider insurance a very special product, as you read AIG CEO formerly headed up Allstate insurance company you will see how the industry’s conduct following Hurricane Katrina caused that special relationship of trust to become a deep sense of betrayal.

To many on the Gulf Coast, watching AIG chief executive officer Ed Liddy talk about the sanctity of contracts in defending the award of $220 million in bonuses to employees at the embattled insurer was an ironic moment.

If only Liddy held that same view of contractual obligations to policyholders after Hurricane Katrina when he was at the helm of Allstate, Louisiana’s second largest insurer.

“How about that?” quipped Bob Hunter, a New Orleans native who is director of insurance at the Consumer Federation of America and the author of a 2007 study documenting the decline of claims payout ratios at Allstate during Liddy’s tenure. “He’s always disregarded contracts to maximize profits.”

Liddy was appointed by the federal government in September to run AIG when the ailing insurer got its first installment of taxpayer bailout money, which now totals $170 billion.

Before caving to pressure on Wednesday and saying that he would ask those who received more than $100,000 in bonuses to return half of the money, Liddy argued that the money needed to stay where it was because contracts are sacrosanct.

That Liddy was forced to cave in to pressure is eye for an eye– justice to policyholders pressured to settle for less coverage than they purchased.  Many had to fight for even that; and, sadly, some still are. Continue reading “that special relationship of trust and a deep sense of betrayal”