This AIG business is so transparent and I’m afraid Timothy Geithner is in it up to his eyeballs. President Obama may be too. He probably is.
They are using a well known trick in negotiating with unsophisticated buyers. Every hondler in every stall in every market in the Middle East knows this trick like his mother’s own face.
You go in with a price that is sure to create sticker shock. Then you negotiate down from there giving the buyer credit for this, and savings for that, and a discount for the other thing, and a tax break here, and oh, my manager says I can throw in the DVD player for free… and at the end of the day the unsophisticated buyer walks away happy because he only got screwed by 20% instead of the 50% he was initially afraid he’d get screwed by.
By the time AIG and our worthies are done with this charade, the bonus pool for this round (this is only the first round of three) will be reduced from $165 million to just a sliver under $100 million. AIG will walk away like the car salesman… bonuses in hand and alive to fight another day, Obama and Geithner will walk away “heroes” for having fought for justice and the American way and saved the us a shred of our pride, and $70 million or so, and we’ll walk away happy we only got screwed by $90 million and change instead of $165 million.
Mark my words.