Countering criticism that the Obama economic team is out of touch, Treasury Secretary Tim Geithner issued new protocols today affecting investor services companies. Based upon the system for rating motion pictures, the new rules mandate use of letter grades to rate stocks, securities and financial institutions.
Until now, companies such as Moody’s and Standard & Poors have collected, analyzed and disseminated information about the risks of corporate and government investment offerings, as well as the strength of banks. However, this system failed to provide warning of the collapse of major financial institutions.
“Companies that were supposed to give accurate information about risks like bundled mortgage-backed securities failed,” said Treasury spokesperson Bill Dollarhide.
For a solution, Dollarhide said Sec. Geithner has turned to Hollywood. Beginning May 1, investments and government bonds will be assigned risk ratings of G, PG, R, NC-17 or X.
“This is a simple labeling system that is easier for investors to understand, as well as providing opportunities to innovate Wall Street,” said Dollarhide.
He said investments might be promoted in new ways. For example, instead of issuing a prospectus, a corporation might promote its stock through poster campaigns and action-oriented trailers.
Dollarhide also said corporations would be more likely to premiere blockbuster stock offerings in the summer and Thanksgiving weekend. Riskier, more intellectual investments would debut in December in order to qualify for the following year’s Academy Award nominations.
The New Ratings for Investments:
“Grandma.” So safe even your Grandma could invest in it.
“Passably Good.” Low Risk, could earn enough over 15 years to pay for your kid’s tuition to a community college.
“Possibly Good-13.” Low-Moderate Risk, suitable to give as Bar/Bat Mitzvah gifts.
“Reamed.” A High Risk investment
“No Credit-17.” Seventeen weeks after purchase your credit rating will go into the toilet.
Anxious executives of insurance giant American International Group are turning in millions of dollars in bonuses today following last weekend’s issuance of a federal recall on the bonuses, citing danger of
Salmonella is an infection that can be contracted from poorly washed or laundered money. Contamination affects the money as well as the things it is used to purchase, such as foreign sports cars, luxury vacations, summer homes, members of Congress, and prostitutes. Discovery of infection is accompanied by rashes of public outrage and feverish Congressional posturing.
Concern mounted last week, when severe cases of bad vibes swept through the upper management of AIG. By Friday, executives who had received $165 million worth of bonuses were reporting clusters of protesters around their enlarged homes. The government issued the recall yesterday.
Federal financial health officials said AIG executives should return the bonuses to the Treasury Department for a 10% refund.
The source of contamination has been traced to a defective thermostat in the accounting department used to store federal bailout money.
Desperate to repair its sinking image in the face of public outrage over $160 million in executive bonuses, American International Group announced today it has negotiated a marketing agreement in which the troubled insurance giant will align its troubled brand with that of the beloved Peanuts comics characters.
The deal is worth an estimated $300 million to MetLife Insurance, which has partnered with the Charles Schultz characters for decades. Officers of both companies held a brief morning ceremony to cement the agreement, after which they went yacht shopping.
The first AIG ad to feature the Peanuts gang — based on one of the feature’s longest-running gags — hit the streets by midday: “AIG!” on Charlie Brown’s lips, as Lucy pulls away the football.
AIG spokeswoman Paulina R. Flack said the deal is a good investment in the future. “A strategic alliance with family-friendly cartoon characters means goodwill and warm-fuzzies for AIG, and it is well known that Wall Street operates on confidence,” said Flack.
“We are aware of the importance of being responsible in spending the federal government’s 80% stake in AIG, we think the people will be pleased at how we are turning things around,” she said.
Administration critics are not so sure. “This is an outrageous example of socialism!” declared Rep. Ned Flanders (R-Ohio).
“Peanuts are ultra-liberal, pinko, secular characters. AIG needs to answer why they ignored the myriad conservative or religious cartoons,” he said.
Flanders cited Family Circus, Mallard Fillmore, and the Calvin praying to the cross logo as “examples of cartoons that real Americans want to see funded by their precious tax dollars.”
Troubled insurer American International Group announced today it will need only $18 billion in a fourth installment of emergency federal aid, not the $30 billion announced Monday. The announcement came after AIG says an internal audit discovered an additional $12 billion in company funds.
“During the review, the auditors discovered $500 million in the sofa cushions of their temporary offices,” explained AIG spokeperson Janet Rasacheck.
“A company-wide email asking all employees to check their sofas subsequently uncovered another $10.5 billion,” Rasacheck said.
Rasacheck also said that AIG Chairman and CEO Edward Liddy found $1 billion he had forgotten about in the pocket of a windbreaker he last wore in September, bringing the total to $12 billion.
At the White House, President Obama applauded AIG for emphasizing reform and responsibility, according to press secretary Robert Gibbs. “The president says AIG’s efforts should serve as an example for business and government leaders. He has also ordered the Government Accountability Office to examine the Bush Administration’s office furniture now in storage. Hank Paulson’s sofa might turn up a few billion,” said Gibbs.
In other news, the Iraqi government today reported finding $5 billion in a dryer lint trap in the laundryroom of the former American Embassy.
Anybody wondering why AIG got a taxpayer funded bailout while Lehman Brothers was left to twist in the wind, should consider the upcoming election and then stop right there.
The plain fact is that the GOP is desperate to avoid any crisis that might impact John McCain’s chances in November, and letting AIG fail would hit them hard where it hurts, right in their constituents. Lehman Brothers failure (now purchase by Barclays) will impact some investors, put some-odd thousand people out of work, but it won’t sway potential voters.
Conversely…think about what AIG does. They sell insurance, and who desperately needs their insurance claims paid just about now? 8 to 9 million voters living in Houston and on the Texas Gulf Coast—the ones that just got wiped out by hurricane Ike. If AIG goes into receivership, nobody gets any money; the press savages the GOP for heartlessly letting millions loose everything; voters all over America make the connection to how the Bush Administration left the people of New Orleans to face rising water and snakes; Texas maybe swings Democrat; and John McCain loses the election.
Bush and GOP didn’t have to get anybody’s permission to cough up the dough to save AIG. They’ve already borrowed trillions from your children. So…if all it takes to secure the White House for John McCain is a paltry $85B, the kleptocrats will probably consider it money well spent.