After writing that "[AIG's] remaining $1.6 trillion derivatives portfolio is like one of those delicate, world-destroying time bombs that James Bond used to have to disarm in the movies; the difference here is that the only people who appear to be knowledgeable enough to dismantle the bomb are the ones who built it[,]", the WaPo Ed Board admits "[l]ike most of the people writing about AIG, we have no idea whether this threat is empty."

Ever wonder why the Washington Post exists? In any event, a new slogan for the WaPo -- "We have no idea."

Speaking for me only

When I was in law school, Grant Gilmore's 1974 book The Death of Contract was a part of the discussion of a theory of contract. Gilmore's work was answered by Charles Fried in his 1981 book Contract as Promise, in which Fried was critical of the theory of efficient breach.

In the NYTimes, it is argued that the AIG bonuses should be paid because "the “fundamental value” in question here is the sanctity of contracts. . . . If government officials were to break the contracts, they would be 'breaking a bond[.]' Even companies that have not turned to Washington might seize the opportunity to break inconvenient contracts." (Emphasis mine.) This is, in a word, nonsense. While I have argued here that, at first blush, the AIG bonuses agreements will be hard to break legally, it never would occur to me that there is some moral obligation to honor these contracts. Indeed, the "morality" of the situation, such as it is, would seem to militate towards not honoring the contract.

More . . .

The Seattle Post-Intelligencer is the latest casualty in what seems like a never-ending stream of newspaper failures. Today is its final issue.Unlike the Rocky Mountain News, it will continue as an online publication.

What's next -- the San Francisco Chronicle or the Miami Herald? Both have been struggling and it seems like newspaper closings are but a sign of the times. [More...]

Boy, the AIG Financial Products division really is filled with cluelessness and chutzpah. An "AIG senior financial products Manager:

"It's going to blow up," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I have a horrible, horrible, horrible feeling that this is going to end badly."

It's going to blow up? You mean it hasn't already? This is going to end badly? You mean it hasn't already? At this point, AIG needs a compelling argument why it should not just be shut down. This type of talking ain't it.

Speaking for me only

Of all the ways to get rid of a prosecutor, this is not one of them:

A scorned Denver woman, who police say was working as an escort, now is in jail, accused of trying to have her ex-husband, a Pitkin County prosecutor, killed....On Saturday, Dvir allegedly offered an undercover police officer posing as a hit man $2,000 to kill her former husband, Richard Nedlin, court records say.

...."If the body disappeared that's fine, but I'd prefer it to look like an accident, like stuff his body with cocaine, like an overdose," Dvir said, according to the affidavit. "It's got to be done in a very smart way. I just don't want it to backfire on me."

The couple are in midst of a messy custody battle. Ms. Dvir is entitled to the presumption of innocence and I'm somewhat skeptical because she was set up by a jailhouse snitch, but the charge alone is not likely to go over well in divorce court. And it's definitely not the way to beat your opponent in court.

After 7 years, Sara Jane Olson, now 62, is leaving prison. She's scheduled to return to Minnesota on parole, but Gov. Tim Pawlenty is trying to block that and force her to remain in California.

As I wrote here, Sara Jane Olson is not a yo-yo and they should stop treating her like one. Here are some older posts I wrote on Sara Jane's life in prison, on how her prison term got extended and how the extension was later thrown out.

Here's more on her guilty plea to the second degree murder charge. And from CNN on her re-arrest after being paroled the first time.

Unless Minnesota is unable to supervise Ms. Olson, she should go back to Minnesota where her family is. The Governor and the police organizations need to get off her case. It's not up to them, nor should it be.

When the Rocky Mountain News went under, many of the reporters who were left without a job banded together online at I Want My Rocky and kept reporting.

Today they held a press conference. They have some capital (from three Denver entrepreneurs) and will launch an online paper May 4, provided they get 50,000 paying subscribers by April 23.

The proposed publication would be called InDenverTimes.com. Subscriptions will be available on a tiered-rate system, with 12-month subscriptions priced at $4.99 a month, six months for $5.99 a month and three months for $6.99 a month.

News will be free to all, but the other features will require a subscription. [More...]

This is an Open Thread.

The WSJ reports:

Monday afternoon, a White House official said the Treasury Department will use a planned $30 billion infusion into AIG to compel the company to repay the bonuses promised to employees of its financial-products group, which is responsible for selling the exotic financial instruments that brought the company to near-collapse. The infusion, announced March 2, won't be finalized until the company and the Treasury work up repayment options, the official said.

(Emphasis supplied.) Devil is in the details here (a lot of potential for Peter paying Paul in this I think as the employees themselves won't be foregoing the bonuses but rather AIG itself will have to "repay" the government for the bonuses paid), but it looks like it is worth exploring.

Speaking for me only

AIG, some of its well heeled and compensated employees, and the counterparties to AIG's outrageous transacrtions, certainly are playing with fire regarding this bonuses issue. But what can the government do about the bonuses? Firedoglake has posted AIG's argument for paying the bonuses. From a legal perspective, some of the argument is sound to my eyes:

AIG has been advised by outside counsel that a breach of the retention plan would subject it to claims for not only the contractually owed payments, but also penalties and fees under the Connecticut Wage Act. The Wage Act provides for the recovery of double damages and attorneys’ fees when wages are improperly withheld and the employer’s refusal to pay wages lacks a good faith basis. (Conn. Gen. Stat. §31-72.)3 In addition, individual managers who decide to withhold wages that are due are individually liable for violation of the Wage Act.

More . .

NYTimes:

Attorney General Andrew M. Cuomo of New York on Monday sent a letter to the American International Group, demanding more information about the employees who are set to receive about $165 million in bonus payments. Mr. Cuomo’s letter, demand[s] the information by 4 p.m. on Monday under threat of subpoena . . .

UPDATE - The President said "[i]n the last six months, A.I.G. has received substantial sums from the U.S. Treasury." [He] asked Treasury Secretary . . . Geithner “to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole.” But, "White House officials said that the administration is not looking to take A.I.G. to court to stop the company from paying out the bonuses. But they said the Treasury Department would be trying to figure out what they can do to block A.I.G. from making the payments within the legal confines of A.I.G.’s contractual obligations to the executives."

More . . .