Who imploded the economy? Many critics point to a crucial role played by traders of exotic unregulated financial instruments which are understood by few people. Currently most of these traders at American Insurance Group remain unnamed while receiving bonuses for “safely” dismantling an investment system turned doomsday machine which happens to hold the fate of the world’s financial system.
A congressional hearing on Wednesday March 18, 2009, shown on C-Span, featured questions from congress people of Mr. Edward Liddy, the current AIG chief executive officer. Mr. Liddy, former CEO of Allstate Insurance, was hired to replace Robert B. Willumstad as CEO of AIG in September 2008. Working for $1 a year to help bail out AIG (and the U.S. taxpayer) Liddy told the congress members that something like 20-25 people at AIG know the credit default business well enough to “wind down this book of business.”
The deregulation of the financial industries (mixing of insurance, banking and unregulated investments) made it possible for a small group of people to design a system that only they understand. Modern financial derivatives were introduced in the 1970s and deregulation of the financial system in the 1980s and 1990s was a boon for trade in these instruments. This unregulated system grew to control the investment distribution of a large percentage of the world’s wealth, all outside the purview of civil society.
When Mr. Liddy was asked for names of the people in the AIG’s Financial Products division who were responsible for the implosion of this business, he gave only one name which is already publicly known. This is Gerry Pasciucco, head of AIG Financial Products (credit default swaps and derivatives businesses). While a congressman implored Liddy to name some of the other traders, he refused. During his testimony Liddy admitted that no one in AIG's executive management knew enough about what the Financial Products division was doing to do a company audit of this enterprise which was dealing in trillions of dollars in investment.
If you are interested in seeing a photograph of Mr. Pasciucco who apparently has helped bankrupt the world financial system, and now is partly responsible for dismantling the derivatives system that did this, you can find one of him sporting a stunning outfit at a philanthropic event held on June 6th 2008 in Connecticut on this Web page: http://www.fairfieldcountylook.com/gallery.php?id=7 [1]
Type “Pasciucco” in your browser’s find box and up pops a photo taken of him with his wife and another couple. He is wearing a blue tux jacket over a Che Guevara T-Shirt. In his wildest dreams, the 1950s South American Communist Guerilla probably never imagined imploding the Capitalist economy as has happened in 2008 and continuing into 2009.
While Mr. Guevara worked with guns, Mr. Pasciucco, and his unnamed crew, probably work with a type of video game that runs their system of derivative contracts. While guns pose apparent serious threat, video games are harmless, aren’t they?
According to a March 18th story in the New York Times Mr. Liddy is said to have recently asked the undisclosed people of AIG Financial Products division to take only half of the total multimillion dollar bonus offered. This may not suite all of us. Representative Barney Frank of Massachusetts threatened to issue subpoenas, if necessary, to make public the names of the AIG bonus recipients.
On March 18th a congresswoman asked Liddy, “Don’t these people have a sense of morality or patriotism?” On the morning of March 19th, there was a report on National Public Radio that the unnamed traders fear for their lives because of threats to kill them and their families have been made by angry taxpayers.
It was also reported that some of these traders have returned the bonuses they received. After all, they amassed fortunes over decades getting us into this fix. Hopefully they’ll accept a $1 dollar contract, as Mr. Liddy has, and help dismantle the doomsday machine.
Links:
[1] http://www.fairfieldcountylook.com/gallery.php?id=7