The media and blogosphere are alit with rage at the bonus payout at AIG.
I find this outrage misplaced. Executive compensation is a big herring and is outrageous across the board, you don't have to go to AIG to be outraged. In software I have seen some mediocre talent get some pretty outrageous payouts. Executive compensation is out of control in general.
No what outrages me is a report that came out this morning, that most of the bailout moneys for AIG went/are going to speculators. It is reported that 2 hedge funds (no names) are making north of 400M (also mentions goldmorganstanley). Anyone want to bet that these were not hedges for real debt assets but naked CDS? So out of bad debt comes more bad debt. Minsky financial instability hypothesis, found proof in naked CDSs in spades.
Here is a thought: STOP THE PAYMENTS TO NAKED CDS AND SPECULATORS.
Since AIG is effectively nationalized, instead of getting in the hair of the workers there, stop payments to speculators, give them back their premium (the insurance they bought) and GO HOME. If the asset was hedged then it is kosher.
Here is the catch, I suspect that the bulk of the payments on subprime defaults were done in 2007-2008. That money has LEFT THE BUILDING, the horse has left the barn. Go after that speculation money, bring it back and STOP STEALING FROM TAXPAYERS TO PAY SPECULATORS THAT HAVE AMPLIFIED THIS FUCKING MESS WE ARE IN! This is the stuff revolutions are made of, no pun intended.