Steve Syre on AIG

" Trust that well you heard that on the news Austin cast from the four -- obviously -- forecast lastly I coming from the south. Slow moving it from Montreal any minute forecast in the ten minute commercials and that was that was in the -- however -- that's it for me it was great. So I think today is gonna be great day and I think it is always a good day whenever we can -- Steve's site from the Boston Globe and get brought up to speed on his world and our world. Steve -- good morning your audio Todd and Tom. Good morning Kate -- have retention bonus. How hot hot hot be out until you're under retain -- I yeah you be escorted from the building and given a million dollar checked weekly radio ya know it no this is. This is unbelievable and I'm sure it elicited Steve's taught and I have maybe have a little bit of a difference of opinion he -- seven this is posturing. Congressional political posturing and -- this is absolutely perhaps be elated but justifiable outrage."

" Well it certainly justifiable but I I think I have to agree with -- and that's it -- the issue about. This this sort of response asking the fact that the real problem is that dumb decisions that were made up front about. Particularly these retention bonuses and then. Just stupid money going out the window very bad decisions that."

" And those decisions were being made Steve based on your research and reading. During the fall of -- I I guess really initially in the fall the first round of bailout money that went to AIG and then repeated in the two or three other a draw downs that they've had."

" How well it could you know there are these in this particular part of AIG that -- all the problems that. It you know there are are literally hundreds of retention bonuses as scientists and it. Debt debt debt what went out that are are at issue here and I can't imagine any that you would you would think that this part of the company would survive indeed anything meaningful in the future and being that you would just. -- have you know wouldn't be spending money a lock these people -- if it is true that if you have a lot of these. Complicated financial contract to which we can lose billions of dollars more that there are few people that you might want to hold onto that figure out how to solve that and save yourself. Bigger losses down the road. But did better in almost blanket there are hundreds of these things that went out -- what you possibly. Need all these people was it was so stupid."

" It is this you know. Mr. Finneran is getting the impression that big business might be as stupid and stupid incompetent and entrenched as big government. And it is that your sense Steve that they're accustomed to just getting away with doing whatever they feel like doing."

" and a lot of cases still I have to say that you know the people at the top of companies get fired a lot more often the politicians do decide wouldn't say that there. Quite in the same league but it. Aside from. The bonuses and all these things that I think something's there. This sort of producer level of salesman level at AIG that certainly did a lot of damage and there's no reason to keep the month but. Indiana's one of the things that kind of distresses me is that there are lighter people on top of them making decisions that are it's deploying these people to take you address. It -- it and and port on what ultimately turn out to be our money at risk any kind of a director and officer level of these companies and the majority shareholder of this company at this point and I don't see any effort what so ever work ops the government take -- Analyzing this and trying to figure out if we have any recourse about people were making. Reckless terrible decision that in the end cost us billions of dollars and whether there's any you know shareholder lawsuit against directors and officers are a dime a dozen there they happen all over the place. Brought by lawyers on behalf of -- shareholders looking for their -- but they're they're all over the place and I don't see any effort whatsoever for us to analyze. Whether we have any recourse to. Personal people -- really making decisions that were. Where is stupid reckless greedy and cost us the lion's share of the money."

" The state -- the governor does -- that we the taxpayers with a government only became shareholders over the past few months. When most of these decisions were being made years ago do we have we the taxpayers even though we now own 80%. What we have standing a stock coldest to -- the direct is the executives for the ineptitude in the -- and in the incompetence will vote or -- furious about."

" Well I'd -- good question I don't know what's so -- and me which we certainly had there are ongoing damages being suffered as a result of those actions. And DI and certainly not a lawyer I can't tell you exactly what's standing we have -- but we've been shareholder of this company -- time and other people in other anti. -- he's been shareholders who have virtually been wiped out in this process and I just. -- As an aside from the money issue in the legal issue act -- I think in the end. Having a real accounting for people who are truly responsible who made you know awful decisions that that affected us personally affected us as a country -- You know he's seen anything about that you hear anything at all about that."

" Well listen I think he even goes deeper than that what was it that made it possible for these awful decisions to be made and to be rewarded. There's a you know we've we've talked this morning a little bit about. Human behavior in the human nature is to behave in certain ways that are predictable if you provide incentives for bad behavior. And the bad behavior never gets punished then people are gonna keep doing the bad behavior we've seen it repeatedly we've seen through the course of this event of the last six months. Where companies that are coming to us for bailouts are then going and buying a corporate jet. Or they're -- I had sort of big party for someone somebody halfway around the world some exotic extravagant thing the cause and effect. Is not being forced on these people and I blame our corporate structures and I blame our politicians who now when they're given the ball don't have the sense to rise to occasion themselves --"

" You would you say bad behavior is rewarded -- is not punished. That's because they're allowed spheres of our economy in particular this particular unit at AIG that was totally. -- regulated yet -- you would sit here it's as predictable as tomorrow's sunrise. --"

" S regulation is seems to me I'm not opposed regulation as I tell you whenever you do that ran -- like regulation but I like the rap I think the best I know you I think the best regulation is you don't let companies get so big. That cause and effect becomes blurry. And they seem immune to to the bumps in the road you want them drive and sports cars not big tanks that have in a lot of suspension is darker --"

" I think it depends on what kind of industry Iranian whether you can have an effect. I mean there are lots of companies that are very large that ultimately. The won't have as big an effect on the economy and on and on all of us. Certainly financial companies are -- in that category. You know you could argue whether. Car companies should be or not we've decided politically that they are. But it is -- big. Did yeah. But to go -- your point -- about it's about regulation your AIG is into the classic. Example in this case because. That the thing they've gotten in trouble and the thing that this particular arm of the company we're doing where these. Essentially small insurance company -- insurance contracts. -- were do. And I'm having a senior moment that you and they're they're they're derivatives and essentially. Protected. An investor from the default on the security so if you're bond went bad we're essentially selling you the full -- insurance contract -- because bet you'd sell it backed up at face value and that this was to. As a Fatah and the business and a market that blew up there grew up rather. In the last you know 810 years it did virtually didn't exist before and it was a whole new set of of financial mechanics and risks that grew up with absolutely no oversight what so ever and no --"

" regulation at all and it and it could succeed as long as the housing market was moving up. As it continued to move up coast to coast."

" That's true I mean how things it issues it is -- on this but they're all kinds of swaps that where are all kinds of other securities that are issues as well as the housing is is the one we know past but. Depicted in the end it there were trillions and trillions of dollars of these things floating around the world with literally no -- even keeping track of them let alone regulating them. And you know it was people like Alan Greenspan at the time who -- A fervor and belief that the market would act rationally and wouldn't do dumb things in this but in the all things would work out on their own and pride that. And that was a terrible terrible mistake and AIG is is that the fire ball in front of."

" That's a great lesson really that Alan Greenspan again the double looked to guru he was the he was the messiah the financial messiah for many many years acknowledges right up front. I thought. The company's acting rationally in the own financial self interest would never get so far out on these risky risky limbs. They have the -- comes crashing down here we out with picking up the wreckage Steve -- as always a delight."