No doubt you’ve heard that AIG has used government bailout money to pay out $165 million in bonuses. This is on top of the fact that more than two-thirds of AIG’s bailout billions went to trading partners such as Goldman Sachs and Deutsche Bank. Robert Reich tells us “The Real Scandal of AIG”
The real scandal of AIG isn’t just that American taxpayers have so far committed $170 billion to the giant insurer because it is thought to be too big to fail — the most money ever funneled to a single company by a government since the dawn of capitalism — nor even that AIG’s notoriously failing executives, at the very unit responsible for the catastrophic credit-default swaps at the very center of the debacle — are planning to give themselves $100 million in bonuses. It’s that even at this late date, even in a new administration dedicated to doing it all differently, Americans still have so little say over what is happening with our money.
And Reich adds:
This sordid story of government helplessness in the face of massive taxpayer commitments illustrates better than anything to date why the government should take over any institution that’s “too big to fail” and which has cost taxpayers dearly. Such institutions are no longer within the capitalist system because they are no longer accountable to the market.
Copper climbs as inventories drop Copper stocks have dropped more than 50,000 tonnes since late February. Traders and analysts said the momentum from falling inventories could be short-lived as they believed most of the inflows to China had been stockpiled by the country’s state reserve body while prices were relatively low.
China May Boost State Reserve Copper Buying in 2009, Macquarie Bank Says China’s State Reserve Bureau may purchase a further 900,000 tons of copper this year, triple the amount it has probably already bought, Macquarie Group Ltd. said.
Global Mining Acquisitions Plunge 40% to $127 Billion; Decline Continues Global mining mergers and acquisitions slumped 40 percent to $127 billion last year and the value of transactions will drop further in 2009 amid a commodity price rout, according to Ernst & Young LLP.
World-Beating China Rally Doomed by PetroChina’s 52% Discount in Hong Kong The growing gap shows that international investors are losing confidence both in China’s earnings growth and in the country’s ability to help revive the global economy. The last time the difference in multiples was this wide, Chinese shares lost 19 percent in 30 days.
OPEC Decides Against Fourth Output Cut on Economy OPEC agreed to maintain current production quotas, concerned that a fourth cut since September risked increasing energy costs during the worst global economy in six decades.
Russia to OPEC: Nyet, Yet, on Oil-Production Cuts Russian deputy prime minister Igor Sechin, at his third OPEC meeting in six months, again signally failed to promise any big commitments to keep barrels out of the global crude market even as OPEC members said they’d push on with shoring up compliance with their own output cuts.
US Domestic Oil Investment to Decline Sharply in 2009
The great American drilling boom is over. The number of oil and gas rigs deployed to tap new energy supplies across the country has plunged to less than 1,200 from 2,400 last summer, and energy executives say the drop is accelerating further.
Related Posts
- Wednesday Charts: Is This Dollar Rally for Real? (08/26/09)
- Copper continues to get clobbered (11/10/08)
- China, China, China! (11/11/08)
- Wednesday News Roundup (11/11/08)
- Friday News Roundup — Exports, Imports and More (03/13/09)
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The US oil & gas business is only a 5-7% profit margin business and the US oil companies are critical to the US economy and American lifestyle yet this industry gets demonized. The US is one of the few countries in the world that doesn’t consider its oil industry as a national treasure to be protected for strategic importance it offers. As a result of its own policies at home, American oil companies are doomed and with them the energy that America requires to sustain its global dominance.