the blame for the collapse of the company should start with aig. from a regulatory standpoint, there were failures at both the state and federal level. using capital for their-- further from their insurance subsidiaries with the approval of various state insurance regulators, the securities lending division in tandem with the financial products and it put at risk the entire company and the broader financial system. half of this came from the securities lending division, the other half from the financial products unit in terms of the overleveraging. with more than 250 subsidiaries operating in 14 states and more than 100 countries aig is the poster child for both the need to open up lines of communication among regulators worldwide in the need to establish a domestic insurance regulator with the ability to oversee these large and complex institutions and again, mr. chairman thank you for holding this hearing. >> thank you mr. always and that we will hear from the gentleman from georgia, mr. scott for one minute. >> thank you very much mr. chairman.

got aig shares for that. and a major part of the shares we got, all of us who owned stock -- >> several investors. >> yeah. were setting this aside so we can buy other companies, we can control aig with these shares. including, if we wished to, always -- we retained the right to do or not do something. it was our option. since we owned the stock. >> it was a private company. >> yeah. create possibly an inincentive program. it wasn't a pension plan. aig had their own pension plan. and so we did. and because by doing that it benefitted cico, if aig about-d well, cico did well. when i left aig, cico's net worth was $20 billion dollars. to believe these shares were held in trust for aig was simply never true from the beginning. >> i like what david boyes read in the paper, his quote was, if this was an incentive program how come it's not in any of the financial records and audits of aig. what about aig now, do you have any idea of significant of the lawsuits are, the legal ramifications surrounding aig right now?

if aig did well, seco did well. in fact, when i left aig, seco's net worth was $20 billion. shares are now worth $200 million. >> unbelievable. >> yeah. it's -- now, we always said we could discontinue any time we wished. we could make changes any time we wished. and we did. we made many changes. including i made it clear to our audit committee of aig that if aig were required to expense the incentive program, it would be discontinued because there would be know sense in doing that then. so to believe that these shares were held in trusts for aig was simply never the truth from the very beginning. no truth to that. the jury saw to that. the final decision rests for the judge, obviously. he is a final determined factor. but i think the jury should be commended in the work they did in listening through the through entire three weeks and that and grasp the complexity of the case. >> they worked hard and really knew the documents that were most important. >> yes, yes. >> i liked what david boise said, look, if this was an incentive program how come it's not in any of the financi

nominee number one, aig. the insurance giant you bailed out reportedly wants to hand out millions more in bonuses while a jury ruled they were wrong going after $4 billion in stock hank greenberg took when he left. next -- >> this case is about bank fraud. >> bed of nails. lee dykstra says he was duped by a mortgage fraud at wamu who was nailed with chapter 11 with the foreclosure on his mansion. >>. ♪ for you and for me >> off the wall. the michael jackson memorial cost a broke los angeles millions including $50,000 allegedly spent on box lunches for police from a restaurant 35 miles away. they could have gotten the dollar menu at mcdonald's like the rest of us. most ridiculous exploitation? selling his image on a piece of toast on ebay for $20. kfc faces another lawsuit over looking like a bird without a head in the oprah give away. game two, china, now considering a ban on the one part of chicken we don't eat, american chicken feet. it is all part of a bird brave trade war. here is my personal favorite.

straight ahead, bonus time again at aig. we have a lawyer representing execs about to see a big payday and the big picture of the week there. is a lot more to this picture than meets the eye, back in o minutes. i believe that there l mysteries in the wor, and wonders, i believe th fun is a renewable resourc there are some things u'll never be able to download. ♪ i believthat when we celebrate le... in creatures bignd small, we discover connectis... that stay with u forever. discover alace where worlds conne aworld. automatic signal i haven you've been in a frontnd crash. do you need he? yeah. i'll contact emergency services and stay with you. you okay? yeah. onstar. standard for one year on 14 chevy models. hunder and cracks of ligning." atever i did my digestive sets came back. but then came align with bifantis. e only probiotic clinicallyroven to provide ongoing prottion against isodes of constipation, diarrhea urgency, gas & bloatin align brgs peace to my digestive stem and toe. try align and discover a world of digesti

a $180 billion bailout. >> aig, shame on you! >> reporter: there was an outcry earlier this year when the company said it had to pay out $165 million in bonuses, even to executives of the disastrous aig unit that caused the company's near collapse. and over $200 million in bonuses aig says were agreed to of a the bailout are still supposed to be paid out next year. a source close to the matter tells cnn aig is asking kenneth feinberg for that set of bonuses. feinberg is the obama administration pay czar who will vet bonuses at seven companies getting big taxpayer bailouts. aig declined to comment, but published reports say the company has also asked feinberg to weigh in on next week's $2 million payment as well. will there be a renewed outcry? >> i think it's smart of aig to ask the administration for approval because it does provide them political cover if the administration blesses the bonuses, and it gets trickiky for the administration to get -- to put some skin in this game. >> the treasury department declined to comment, bu

with regard to the aig situation. you were running down the scenario in regards to who's looking at it and of course mr. manzullo raised the issue and mr. mcraith you made the comment portions were overseas and london specifically. and i believe i've heard that before that part of the issue here is that -- not state regulator necessarily but federal regulators or lack thereof as mr. manzullo was making your raising one as well as far as the european arm of it or looking at it may be missing it as well, do you want to join in on that? >> i think the important point is that regulators need to have formalized structure for information sharing, for communication not because of the risk but because frankly there are large companies who will present risk. it's to avoid the disruption so that the stability -- >> i guess what i heard, mr. skinner, you commented, was their failure also not on the federal reserve or federal regulators looking at the aig situation but also a failure from the european regulators as well looking a

. >> we have to say to aig, no. >> aig received about $180 billion of government bailout funds, and were criticized by congress and americans for paying millions of dollars and retention bonuses after getting the bailout money. >>> the controversy alt secret cia program is over after members of congress found they were being kept in the dark. last month, leon panetta told congress about the secret program after he found out about it. the canceled -- the program has been canceled and have launched an investigation into why congress does not told about it. it started after september 11, but nobody has disclosed what its purpose was. >>> news that marion barry hired his former girlfriend to be consulted for the city is raising questions of ethics, and tonight the city council is addressing those issues. suzanne kennedy has the latest. >> the independent review is under way, headed by a former federal prosecutor and president clinton's attorney, robert bennett. the council wants to know if councilmember marion barry did anything wrong when he awarded a $60,000 contract to his now- former gir

aig auditor. so if they could get more collateral out of the idea before they failed in a get enormous windfall of collateral after a i t fail if they never would have gotten that had we not build out a idea a aideed bailout balloon from 85 billion to no more than a hundred cost and $80 billion but you are an investor goldman was the only been a factor. there weren't the only been a very current that was always going on in there with a large is because there was the largest holder is so the loss in the president has been feared their trading the big discount apart with the biggest top of the assets. on or not kennedy like goldman sacks thought? when you can borrow at these rates and trade with impunity in but a whole bunch of assets and level three where you don't have to account for them you get new banking accounts and is not a bad deal. i have overlooked the future profitability cricket guess i like it but would you buy any from the have those criteria or just goldman? i'm not buying any of the

that is the not too given to executives at aig. -- that is about to be given to executives at aig. what is the deal? i and a stand that you are in las vegas, steve. >>>> what happens here stays he. jennifer: what is this about aig paying out all of these bonuses? >> do these people get it? the american people are so angry about these bonuses. i am not an opponent of bonuses or executive pay when executives make money for the shareholders and to make products that people want and the companies make a profit. we are talking about a company that was nearly bankrupt, would have been bankrupt except for the fact that the u.s. dollataxr put in $100 billion. the idea that these executives are entitled to these bonuses. $2.4 million is a tiny amount in the grand scheme of things. the other part of the story is a leading indicator that if they can get away with this, there is an indication that the executives at aig want 10-20 times more. they want 50 million in bonuses. jennifer: have they paid any of the money back? have they made any profit? >> the company is performing a lot better than

i am sick of aig and i think it's becoming an example of t.a.r.p. and bailout nation. >>> coming up on this program. some people say a group of bipartisan lawmakers calling on obama to audit the fed. you know what? i think it's pretty good idea, something definitely worth exploring. the fed has not done a great job in the last couple years or the last ten years, so we have a famous congressman, michelle bachmann and former dallas fed head, bob matier, who we're going to discuss this quietly on a friday evening. what's wrong with auditing the fed? they're the people's central bank. i am the people's kudlow report. back after this. lower hotel booking fees mean you get a lower total price. plus, if another orbitz customer then books the same hotel for less, we send you a check for the difference, automatically. ( clunks ) ( coins splashg ) why tossut your money? swit to sprint. save $475 a year with the simply everything plan and get the blackberry curve 8330 smartphone for just $49.99. deaf, hard of aring and people witeech disabilities cess www.spri

we gave aig $180 billion. because they were irresponsible, they were taking risks because they created these exotic products, and to enrich themselves. they were irresponsible. but yet they are rewarded through the tax dollars. when does it stop? and what is the punishment for their irresponsibility? >> i cannot tell you how much it pains me to be on the other side of this conversation -- conversation. i cannot tell you how angry i was, what i was there and the management team came in, and this is -- you are absolutely right. but there was a situation, where we had an unregulated hedge fund, on top of the insurance companies. there was a payout on the regulatory system that never should have been allowed to happen. but it did happen and all that i can say is that he will never be able to explain that. we'll want to be in a situation where this can happen and can. all that i can say to you is that if the fed had not taken that action, given the size of aig, we would have had a financial system meltdown and the

aig continues to try to work that number down. people leave. you don't have to pay them their full bonus. the idea is you want to orderly winddown of this unit, which has caused so much pain for all of us. another bucket is retention payments for senior executives who are hired after the government took over. and here's where at least today's story is. there's 2008 performance bonuses for all employees, including $9 million worth of bonuses for the 40 top executives. the top executives didn't get any. the 40 below them get $9 million in bonuses. they get some of it in march, another quarter of it in mid july and the final quarter of it in september based on hitting various internal targets. this is what the latest brouhaha perhaps is about. of course, all of this comes because aig, along with citi, for example, where i spoke on a number of top managers recently, are dealing with ken feinberg, the government-appointed czar, if you will, of executive pay. i'm talking to people at citi, feinberg has been going over things at aig, communicating wit

just four months since aig paid out multi-million dollar bonuses and this time they say aig wants to protect itself by getting approval by the administration compensation czar. he hopes aig does not get the nod. >> i think basically what aig is trying to do is know back to the way things were preunited states government owning 79% of the company. and i'm hoping that mr. feinberg, who is the pay czar, the compensation czar that president obama appointed, i'm hoping that as aig goes to him that he will say how dare you. >> okay. one point point here. aig doesn't really need approval from feinberg, the compensation czar because the bonuses are linked to contracts from last year before it received bailout money. smelling a blog question here. we want to know what you think about this round of aig bonuses, if you would. go to cnn.com/tony. we give you a bit of a longer set up to the question on the blog. i rip on it a little bit, couldn't help myself. send us your thoughts. >>> disturbing details continue to emerge where hundreds of bodies were dug up and moved in an alleged plan to resel

aig is not commenting on these reports this morning. but the company is only alive as we know because of a $180 billion taxpayer bailout. aig wants president obama's blessing to give out more cash. congressman elijah cummings a big critic of the bonuses that aig gave out in march joins us from our bureau this morning. good to have you with us, congressman. >> good to be with you. >> aig received $180 billion in government bailout money. we heard about the outrage they were giving out $34 million in bonuses. some of the payments possibly as a result of all of the outrage ended up being deferred. so this morning, we're learning that the portion of these payment, including $2.4 million for bonuses in executives are still going to be distributed. what's your reaction this morning? >> i'm not surprised. aig is consistently out of tune with the rest of america and with so many americans that have lost their homes, their jobs, and their savings. and they just don't seem to get it. it's a whole different culture there. i think basically what ai

they decided you should bail out aig. so they bail out the day after they let their competitors out, they bail them out to the tune of $85 billion. these two jean uses, say yes, you have to do that for the economy. so who is the biggest single payout from aig? what a surprise, on the check, make it out to goldman sachs for $12.9 billion. now, the treasury secretary again hank paulson, remember goldman sachs ceo, he decides he needs somebody to head up tarp. who do i know? there was a guy goldman sachs. he is going to appoint to oversee tarp and one of first things he does, goldman sachs has to be changed to a banks holding company. that way they can have access to tarp, fdic money get money from the fed. that way they can be saved! right, right. so cash carry, he's out. he has been replaced by gary ginsler, he is former partner at goldman sachs. now, once cash carry has made goldman sachs a bank holding company, they don't have that pesky sec thing. they have a guy named steven friedman, the former chairman of goldman sac

they decided you should bail out aig. so they bail out the day after they let their competitors out, they bail them out to the tune of $85 billion. these two jean uses, say yes, you have to do that for the economy. so who is the biggest single payout from aig? what a surprise, on the check, make it out to goldman sachs for $12.9 billion. now, the treasury secretary again hank paulson, remember goldman sachs ceo, he decides he needs somebody to head up tarp. who do i know? there was a guy goldman sachs. he is going to appoint to oversee tarp and one of first things he does, goldman sachs has to be changed to a banks holding company. that way they can have access to tarp, fdic money get money from the fed. that way they can be saved! right, right. so cash carry, he's out. he has been replaced by gary ginsler, he is former partner at goldman sachs. now, once cash carry has made goldman sachs a bank holding company, they don't have that pesky sec thing. they have a guy named steven friedman, the former chairman of goldman sac

we can't have politicians running companies like aig and general motors. we're deciding what dealers we're going to keep open for heaven's sakes in the auto industry. we have got to break them up. there is a lot of aig that is very profitable and we got to get out of the business. the taxpayers are going to lose money one way or another because politicians made a huge mistake had they decided to bail out this company and many other companies. washington cannot run the private sector business. that is socialism. that's what i write aboutn saving freedom. the only way to deal with this now is to get the government out of aig, and these other companies. >> can you really get out, senator, quickly, without further harming the u.s. economy though at this point? >> well, it won't be easy, but most of the harm is already done. we put up $180 billion in this. if we stay in it, we'll have to put more an more money at it. every time they decide what executives are going to get paid, all the congressmen and senators will express outrage. but these are the same congre

aig is a the only company to receive funds under this program. we own 80% that have sales of the most bible assets which are on the insurance side of the companies, why do we do this? >> that is a cousin and think is better address the treasury then to myself. is hard to calculate, to go into that way back machine and none said they what would have happened if we have not been allowed to the treasury and with the implications would have been serving from some post prospective and those responsible for the bailout and aig were of the consequences would have been disastrous but is trying to really know to know exactly what would happen and will continue to do is to try to take transparency to that decision making progress to what is happening over there and blow continue to do so? >> you think by the recipients of this low dollar deal? moi. >> crisping and assets? they have to disclose some of the sale of assets and it included art in our report to camp and thank you so much for your answer is. >> thank you very much, mr. chairman, and let me echo

and it's not just aig. there was credit that eased up, and people who wanted to refinance their homes and once government money started to flow it eased up credit somewhat, and there was a backlog. aig dollars also come into play. here is my question, when you are looking at goldman sachs reporting outstanding earnings, how are they making so much money when other mega banks, and big industries are in trouble? >> that's a good question. and the author of "bailout nation" is here to answer that question. nice to see you, barry. >> hello. >> how are they making so much money as the rest of the economy tries to find its way? >> everybody for gets, before aig collapsed, goldman squeezed $6 billion out of them, and you take that, and that $6 billion should have been part of the aig estate that the taxpayers ended up with. it's $19 billion. it's hard thought to have a good quarter when you were sitting on that. and to them, this past quarter was business as usual. trading was very, very advantageous. you see a 40

he says that aig sharia compliance fund is an act of the government which now owns 80% of aig. and as a result violates the separation of church and state because its government funding and institution of religion. [applause] now, and that coal? and that lawsuit needs money and support and it needs friends and please consult the part of the book where i give you the place to send all of that. so listen, we are at a crucial crossroads here, and barack obama has lost 12 points of job approval in the last 12 weeks. [applause] the gallup poll has him dropping from 70 to 58. restless and has him dropping from 65 to 53. i prefer rasmussen but the point is that he's dropping. and when he drops to 53 and 52 that is the share of the vote he got in the election so at that point he's actively shedding votes. it's people that voted for him and say now that they don't improve of the job that he's doing. and he is doing everything he can to drop his job approval. he's screwing up the health care system, doubling utility rates, he's going to raise taxes on the middle class as a result of his

aig iseviewing bonus payments with washington's compensaon czar. inarch, aig sparked national outrage whent paid $165 milln in retention bonuses. after taking $200 billn in government a. >> paul: cysler is looking to clear its shrooms of 2009 models by doubling the government'scash for clunkers" incentive. the autoker will offer up to $4500 in cash or zerpercent fincing for six years to nsumers who trade in their g guzzlers for new vehicles. at's in addition to a federa voucher worth up to $450 towards a fuel-eicient car. "casfor clunkers" and the chrysler inceives start tomorr. >> suzanne: here's look at what's hpening tomorrow: inhe "money file" tonight some sneaky cdit card practices to watch out for. he's harriet johnson brackey personal fince columnist at the "sth florida sun seinel." >> you probably haven't noced, but there's a mar new law on the bos that's designed to reform credit cards. well, of course yohaven't noticed. because hasn't taken effect yet. and that's t key reason why e credit card companies continueo play their hijinks. and c

. >> how was the determination made with institutions like bear stearns, aig and merrill lynch should be saved either through direct assistance or acquisition while lehman brothers would be allowed to fail. i'm not quite clear and i know you addressed it. >> i did i and will say to you we will not have the legal powers we believe to do something in the lehman brothers case. we did not have the t.a.r.p. to put capital in and we did not have a buyer as we did in the case of bear stearns. so we were faced with sort of an unfortunate set of circumstances. >> i will conclude, i see the red light. i want to say if we have missed the oversight responsibilities, i need to know what you consider in writing and we will put that in our letter to you. what you consider government could do more of. i do know that we did not -- this committee under the former administration did not do the kind of oversight. maybe we were asleep at the wheel or looked the other way, but i would like to hear from you what government could do so we don't get in this situation again. i think really it's worse than the

has anyone here heard the company aig? i know it hasn't been in the news lately. >> congressman, to be clear, aig is kind of colloquial referred to as the world largest insurance company, but it 71 -- >> excuse me. the idea is it is an insurance company that does different lines and the problem that i have with it is that it is one company that was into so many things that the state regulators chose not to regulate. the federal government didn't have anybody to regulate and the states collectively said we don't need to look at what aig is doing. we will only look at this slice, this slice and a slice. that's all, and those slices worked fine. >> actually, congressman, the insurance regulators look at the insurance subsidiaries. the problem was, and this is why we support systemic regulation, there was a complete lack of regulation at the holding company level. what should happen, -- the problem is you are looking at the relationship between the policyholders and the companies. no one was looking at what was happening with

aig is ready to hand out more money. they are asking uncle sam to sign on the dotted line because a number of executives want the president's compensation czar to sign off on these promises. give your blessing. this is after taking billions in government bailout. who better than elizabeth from the fox business network to tell us what is going on? they have not paid the government back the money. they want to hand out how much money? >> it is about $450 million. a lot of it will go to the financial products division. they cooked up the crazy insurance products. martha: you are saying these bonuses would not go to people who were in separate parts of the business who did well. >> here's the deal. it is a lot of money. the bonus is what caused these things to be brought out. people fail to realize -- it is a complicated story. they need to keep these people in the seat. the contracts for these insurance products they have sold say that if that executive walks off the debt -- off the job, that contract becomes null and void.

aig. even ben bernanke gets furious thinking about the role that company had in our financial crisis. so money expert jennifer westhoven has some news that aig is roughling feathers again. what now? >> they're planning to give more money to their top executives. four months ago when the story broke i could hear you screaming at the television. this is the same company that needed a $180 billion bailout after they basically attached a reckless hedge funded on a stable lz security. by the way they don't need it. they're asking for that blessing because they want some political cover. >> give me a break. >> i don't know that they're going to get it. last time they thought they were getting death threats and they were so upset about it. well, and you want to give bonuses out again. >> jennifer, thank you. >> pay it back. pay it back. >> thank you. >>> a pennsylvania swim club is under discrimination for allegedly discriminating. the 65 k through 7th grards are part of a day camp. last month th

>> without the tools and authority to manage the large companies to join aig. they did not have that authority. so we were very limited in the choices we were able to make. >> you couldn't go in and say -- >> they were contractual commitments, and there was no way for the firm not to honor those without risking default. default would have led to exactly what you saw in the wake of lehman. and that outcome was important to avoid, and fortunately, for us, as a country we had the ability to avert that outcome in aig, but we did not have it in the outcome leaf man. that's why it's important so early to try to convince congress to give us more flexibility, better choices to manage those kinds of risks in the future. but again, there is no way to do what your question asks without damaging the financial system. you saw the fabric of the financial system in the wake of lehman. but with better resolution authority, we would have a little more sensibility and better choices. maybe we would see a better outcome. >> we will be back with the secretary of treasury, timothy

march, aig sparked national outrage wh it paid $165 miion in retention bonuses. after taking $200 biion in governmentid. >> paul:hrysler is looking to clear its owrooms of 2009 models by doubling t government "cash for clunkers" incentive. the aumaker will offer up to $4500 in cash or zo percent nancing for six years to consumers who trade in theiras guzzlers for new vehicles. that's in addition to a fedel voucher worth up to $40 towards a fuelfficient car. "ch for clunkers" and the chrysler inntives start tomoow. >> suzanne: here's a lk at what's happeng tomorrow: in themoney file" tonight some sneaky credicard practices to watch out for. here'sarriet johnson brackey personal financeolumnist at the "southlorida sun sentin." you probably haven't notice but there's a major w law on the books at's designed to form credit cards. well, of course you han't noticed. because it hn't taken effect t. and that's the k reason why the edit card companies continue to ay their hijinks. and consumers continueo suffer. st of this new law wont touc the industry unt next february.

out aig. aig had one major counterparty of a lot of others. the biggest one was goldman sachs. $12.9 billion in credit default swaps protecting goldman sachs. when it was learned that goldman sachs was the major counterparty, the press went to them and said what would have happened if the government allowed aig to fail and goldman sachs said nothing, we were fully protected. we had collateral from aig and in addition we had bought other protection against a possible failure by aig so it would not have been a problem for us. that's how we have to look at the aig question. it was large, it was engaged and interconnected as all financial institutions are always interconnected. but the possibility of loss from aig was very small. >> mr. zandy, would you comment on the fact that this last bubble was created in large part by financial ins instruments that did not exist maybe 20 years ago, and especially the derivative part of the mortgage part of it and how it sustained a bubble in the housing marke

aig owes another $235 million in retention bonuses. the company has roughly $180 billion in bailout funds. >>> just 40 days ago general motors went into chapter 11 bankruptcy protection and today it emerged as a smaller company and you and your fellow taxpayers own about 60% of it. fritz henderson says the company will repay about $50 billion in government loans ahead of schedule. he's also promising that gm will build vehicles you will want to buy and get them out of the market faster. the company is cutting about 450 executive positions. it's expected to shed thousands of other jobs by the end of the year. >>> the guy who dated alaska governor sarah palin's daughter says he knows why sarah palin resigned. now, the palin camp is fighting back. >>> just outside pensacola, florida, police are searching for three men in connection with the shooting of a couple. police say eight kids were found in the home all unharmed unlong with the bodies of the couple. a relative tells the associated press the couple had 16 children altogether, some g

if the american taxpayer has $180 billion invested in aig, do you want aig to have executives who are rewarded for performance, or you do not want them to get any kind of bonus or performance compensation at all? >> executives that you have nothing to do with getting outramegous amounts of money are offensive, but if you have pay the taxpayer back, you might start to look at it differently, as if you are somehow hiring these people yourself. >> that's right, ali. we are continuing to see this story unfold. because there's been a lot of money contractually agreed to to the people who work at aig. and you're going to continue to -- how are you going to pay that out? there's still a lot of money that has not been paid out and the public does not want it to be paid out. >> yeah, that's -- this is the story we'll have to continue to follow. one of the thing the government's going to have to look into in the future when they take over a company or bail them out, should they have the authority, called resolution authority, to be able to cancel all the contracts and get rid of anyone they don

just look at bear stearns, lehman brothers, aig, the high-end insurance companies. look at the big banks like countrywide, regulated by the fed but found those restrictions too onerous and chose to adopt a strict charter. we should, as a country, have not allowed that to happen, and the core part of the reform is putting in place more conservative restraints, more effectively enforced across those core institutions that can threaten the stability system. so absolutely, and that's one reason we're moving so quickly to lay out what are very ambitious comprehensive reforms and the test of those reforms are going to be fought and resisted a across the financial system. >> one of the things you said in an interview with charlie rose was one of the causes of this crisis was loose money, that there's too much easy money and those interest rates were too low. what do your regulatory reformists want to do about that? how do you get the chairman of the federal reserve to be willing to take the punchbowl away when the party has begun, to quote a famous fed chairman? >> that's

the united states taxpayer bailed out aig with $180 billion. goldman sachs is collecting 100 cents on the dollar from aig to the tune of $13.9 billion. basically taxpayer money going through aig, to goldman sachs. now i want you to think about how we treated general motors and we bankrupted general motors, and we're telling people nobody's getting 100 cents on the dollar, i don't care if you're a shareholder, bondholder -- >> -- we could rewrite the rules. >> that's why you do it. if you're bankrupt i can rewrite the contract law and say no, no, matt. >> by not bankrupting a company like goldman sachs or aig, we have -- do not have the power to rewrite those rules? >> the real question is why is the president, why is our congress, why is our treasury secretary allowing the financial institutions to continue without being treated as a bankrupt enterprises, a la aig, that they are? >> real quickly, do the employees who are going to get those bonuses deserve them, in your opinion? >> the employees are a function of a system. in other words i can't

i think the fed panicked on aig. it's cost the taxpayers about $150 billion to $170 billion so far and probably cost more. >> but aig, in my opinion, the way i view it and i could be wrong, aig seems to me to be the linchpin because ultimately, they were the ones that issued all the insurance and didn't have any way of paying off claims. >> there weren't any claims. what happened with aig was that they didn't have the collateral that was necessary to support the credit default swaps they had issued, right. >> right. >> but tlmp no claims on credit default swaps, you really have to remember this. it's as though you had homeowners insurance and your insurance company failed but you hadn't had a fire in your home and no loss in your home. and under those circumstances, what you do is you go out and you get a new insurer, and the idea that because aig failed and couldn't pay off on insurance on which there were no claims is not a crisis. in adigts, when goldman sachs was asked what would have happened to them if aig had

>> thank you so much for your great insight on aig. you said drop that limp stock. >> yeah. that thing was a lizard, man. >> i got out and -- >> that thing was a monster. go ahead. >> quick question. energy stocks have taken a big hit. what do you think? >> aci just had a big run.

>> i have to because i have to find the law that allowed aig to do what they did. and the law that allowed aig to do what it did was -- >> what were the regulators doing during that time in that eight years? people who couldn't even understand what they were doing. >> i'm saying, yes, 40-1 leverage approved under george bush, you betcha. did the hatfields screw us badly in that regard? you bet and so did the mccoys. my point is the mccoys passed the law and hatfields added gas to the fire with the leverage. my point is, until we step out of the hatfield/mccoy mentality and be honest what is going on on with money in this country, the people of this country suffer the most. that is the only point i'm making. >> i absolutely agree with you. that is the story playing out when we look what is happening with health care reform and what is happening with banking reform and with all of it, you got these entrenched interests fighting each other and the republicans basically saying they're more interested in, you know, trying to derail the president's agenda than coming up

coming up, aig outraged, round two. theynow they could get more money all over again. >>> and an nfl rocky shot in his car -- rookie shot in his car. we'll have the latest. >>> fox 5 news at 10:00 just st ntettar d. stay with us.   >>> more bonus backlash for aig. they are reportedly tryg to head off the storm of criticism before giving out $250 million in bonus money. back in march, the public wa outraged to learn that aig handed out huge bonuses to executives after taking $180 billion in taxpayer dollars. aig is reportedly asking the government now to allow it to pay the retention bonuses as promised in contracts from last year. >>> it is no surprise to anyone the economy is still suffering. some republicans are now sounding off about it. but the president is not taking it lying down. he fired back during his weekly address, saying progress is taking place. it will take more time. while making a stop in italy, president obama took time out to tape his weekly radio addr

by aig. so it would not have been a problem for us. and that i think is how we have to look at the aig question. it was large. it was engaged. it was interconnected as all financial institutions are always interconnected. the possibility of loss from aig was very small. >> mr. zandi, would you comment on the fact that this last bubble was created in large part by financial instruments that did not exist, maybe 20 years ago, and especially the derivative part of the mortgage part of it and have it sustained the bubble in the housing market, which really sustained the mortgage market which continued to sustain the housing market? >> well, i think one of the root causes of the bubble in housing market was the process of securitization was fundamentally broken. that no one in the chain of the process had a clear understanding of all the risks in its entirety. the lenders made the loan. they sold it to the investment banks and investment banks package and got the rating, the rating agencies then s

he says that aig syria compliance fund is an act of the government which now owns 80% of aig. and as result violates the separation of church and state because it is government funding institution of religion. [applause] now isn't that cool? and have lawsuits needs money and support and it needs friends and, please, consult the part of the book where i give the place to send all of that. so listen, we are at a crucial crossroads and barack obama has lost 12 points of job approval in the last 12 weeks. [applause] gallon has some dropping from 7258, rasmussen has him dropping from 65 to 53. i refer -- i prefer rasmussen but the point is eavesdropping and when he drops to 53 and 52 that is the share of the vote he got in the election so at that point he is actively shedding boats, people that voted him and say they now don't approve of the job he is doing. he is doing everything he can to drop his job approval. he is going up the health care system, doubling utility rates, going to raise taxes on the middle-class as a result of this health insurance program, but he is going to do

aig declined to comment. but published reports stay company has also asked feinberg to weigh in on next week's $2 million payment, as well. will there be a renewed outcry? >> i think it's smart of aig to ask the administration for approval because it does provide them political recover if the administration blesses the bonuses. i think it's tricky for the administration to get -- to put some skin in this game. >> the treasury department is not commenting but did say overall when kenneth feinberg reviews bonus proposals, bailout companies will need to convince him they have struck the right balance to discourage excessive risk taking and reward performance for their top executives, wolf. >> technically, mr. feinberg is only reviewing future bonuses. there's some question whether these were from previous contracts. >> much of these were from previous contracts and mr. feinberg does not necessarily have to trul rule o them, and if he doesn't, aig has to take the heat pretty much on their own. but keep in mind th

aig sparked outrage by paying millions in bonuses. now they are asking if they can resume those payments. they want approval of bonuses that are due next week. they have received about $100 billion in taxpayer money. citibank is announcing a shake- up in management. there will be a new head of the banking division. they have received $45 billion in government aid. bernard madoff's lawyers say he will not appeal his sentence. more than 15,400 claims have been filed by victims of the ponzi scheme. the trustee says he has on earth this game of almost unparalleled complexity. airlines are doing a better job of getting where they are going on schedule. they were up in may. airlines have improved their performance every month this year except march. warren buffett reveals his three rules to live by. and that is your "ney scope" report. i'm jeremy hubbard. >>> 65 degrees. for the first time since his son's memorial, we're hearing from michael jackson's father, joe jackson. crest later today, three celebrity -- >> later today, up three celebr

. >>> and another company that has received money from the government is aig. and now there is word the insurance giant is asking the obama administration to approve millions in retention insentives and bonuses. elijah cummings says enough is enough. >> they've made all kinds of excuses for these bonuses. i'm telling you u. i've been dealing with aig for the last year, and i've heard everything under the sun, and this is just another one of their excuses, we're talking about retaining people. what we found out, a lot of the people still left even after they gave them millions of dollar. >> congressman has been very vocal about aig. the company has received roughly $180 billion in bailout funds. >>> in an unusual move to help protect blue crabs in the chesapeake bay, the state has offered to buy back thousands of commercial crabbing licenses. the crabbers are being told to name their price, and the move isn't sitting well with some watermen who say their jobs aren't for sale. >> pay the bills. >> reporter: dennis anthony has spent most of his life earning a livi

ex ceo of aig hank greenburg getting a jury verdict in his verdict. a bankruptcy judge late tuesday ruling a group who claimed they were injured as a result of defective g.m. products may not appeal directly to g.m.'s asset sale. and google is getting into the operating system business for pcs which will sharpen the already intense competition between google and microsoft. and let's wrap up on this story, clueless thieves bypassed real cell phones and cash when they broke into a cell phone store in marania, mexico. apparently employees say they took replica phones rather than the real things. that's a pretty dumb way of going about trying to make money in this current environment. back to you, christina. >> all right. thanks so much, geoff. >>> manny gets the thumb. the rays get a walkoff and lance gets second place. >>> plus, a little creativity in the beautiful game. your early morning sports headlines are separate ahead. >>> hey, coming up, we'll have a look at the second half of your week. you're watching "early today." >>> good morning. if you're

of aig, and the fact is, gold maman was fully hedged, anf aig had gone belly-up, goldman had it covered by swaps. the government decided it didn't want aig to go belly up and then we criticized goldman. joe, stay there, because i'm going to write in a couple extra people to beat up on you. >> goldman sachs, bernard whitman is with us, ceo of whitman insight strategies, and greg knapp, radio host, and jack berkman, republican strategist. and leslie marshal, host of her own radio show. jack berkman, don't you just love that goldman sachs? oh, you don't, do you? but i do. go ahead. >> no, i do love goldman. i've got to be honor, i think hagen's article is silly. i wouldn't have done t.a.r.p., t.a.r.p. is stupid. but if t.a.r.p. is out there, why in the world shouldn't goldman sachs take advantage of it? if the federal government is stupid enough to give a trillion and a half away to banks, goldman sachs is a model corporate citizen. i would have taken advantage of every single nickel i could. >> joe hagen, jack makes a good point. so what, goldman exploited the government programs. shouldn

. >>> and no aig outrage number two. they created an uproar months ago, handing out bonuses after getting federal assistance and now it could happen again. >>> plus an nfl rookie shot inside his car. we have the latest on the investigation. >>> and later last call for a local landmark. nathan's in georgetown closing for good. we'll take a walk down memory lane.  there are moments in time when the paths we take do determine our future. today we are communicating with each other as never before - and that requires a seamless network that is constantly growing better, smarter, and more secure. that's why our scientists and enginees in our labs, are taking the fastest technology in the world and making it mobile, better and faster - to keep pushing the internet fuher than anyone dreamed. last year alone we invested more in building america's future than any other company - improving and expanding our network, to keep you in control. and behind the scenes, that takes work by our employees, who pride

he says that aig sharia law compliance fun is an act of a government which now owns 80% of aig. and as a result flyleaves the separation of church and state because its government funding and institution of religion. [applause] now, it ain't that cool? in that lawsuit needs money in in in support in use friends and, please, consult the part of the book for and give a place to send all of that. so listen, we are at a crucial crossroads here. end barack obama has lost 12 points of job approval in the last 12 weeks. [applause] gallup has them dropping 7258, rasmussen has some dropping from 65 to 53. i refer -- i prefer rasmussen but the point is his shopping and when he drops to 53 and 52, that is the share of the vote he got in the election so at that point he is actively shedding boats. in his people that voted for him and say now they don't approve of the job he is doing. and he is doing everything he can to drop his job approval. he is growing of the health care system, double in utility rates, going to raise taxes on the middle class, as results of this health insurance progra

our taxpayer dollars -- >> goldman was hedged, aig owed goldman $2.5 billion. goldman goes and buys credit swaps on $2.5 billion, and if aig failed, then goldman would have been covered by these other swaps much the federal government decided they didn't want aig to fail. the government didn't bail out goldman sachs. goldman has paid it back. >> the government sold a ton of warrants that goldman hasn't bought back. >> so what? >> people, let's -- >> let's focus on the fact -- >> michael. >> there has been a meltdown here. there has been a meltdown. we are all involved in it. this network is involved with it. >> so we -- >> everybody is looking at this. we all -- stand here. that is -- >> obama obsession. >> one at a time, please. >> guys, listen. >> kelly ann. >> talking about cit which does give loans to small businesses. however, that would mean the end justifies the means. you kabts keep bailing out everybody who is about to failure. failure is what built this country. you want to talk about success, you talk about failure. start when the kids are young. >>