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Over the weekend, the Connecticut attorney general indicated the bonuses paid to AIG was closer to USD 218 million. I’m a bit enraged the bonuses were paid out, but you have to put the amount in perspective. Over the past 6 months AIG received over USD 160 billion in bailout money with more to come.  The bonus amount is less than two tenths of one percent of the current AIG bailout money. So why is their such little outrage at the other 99.80% of the money? I assume because it’s tough to put a human face to a counterparty like Goldman but if a single person like Douglas Poling receives USD 6.4 million it’s a different story. But even the USD 160 billion for AIG is chump change compared to what the Federal Reserve announced this week: to spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac. It’s official the US Government used their last weapon and early – the printing of money. As a data point, last year the Bureau of Engraving and Printing (BEP) printed USD 154 billion in real currency notes based on yearly data provided by BEP.

Back to AIG, although the media talks about AIG to be precise there was a division within AIG that caused all the pain – AIG Financial Products (AIGFP).  You can think of AIGFP as the bad insurer. Towards the end of last year the WaPo had a great three part story on the history of AIGFP: Part 1 | Part 2 | Part 3

Another article I found has a quick timeline of the Rise and Fall of AIGFP

Finally, Rolling Stone Magazine (yes, of all publications) has a good story on AIGFP

On Tuesday, Apple gave a preview of what new features can be expected in their latest software (v3.0) for the iPhone. The event was a mix between features for end users and also for developers.  Apple said the latest Software Development Kit (SDK) includes over 1000 new API’s and over 100 new features.  v3.0 will be released later this summer (June/July) which is exactly two years from the launch of the iPhone in June 2007. It’s a bit sad that some of basic features in a USD 30 phone are finally arriving such as ability to forward an SMS. Below is my wish list, items crossed off are coming in 3.0.

• Smart groups in contacts
• Export Business cards
• Implement copy and paste
• Notes program syncs to computer
• iCal to-do list syncs to iPhone
• Play DivX files
• Forward SMS’s
• Multiple signatures for different mail accounts

Check out Terry White’s massive wish list, it seems Apple still has a long way to go.

Someone recently sent me a PDF describing how to invest like Warren Buffett…seriously What The Fu!@. I’m waiting for someone to send me a PDF on how to become the next A-Rod…oh wait just take steroids.

Before you start to mirror his trades remember this simple calculation. Based on the 2008 Forbes billionaire list, Buffett is worth USD 62 billion.  If he loses 99.5% of his wealth he still has enough change to buy an Airbus A380…USD 310 million. Now run that calculation on your networth?

This week Berkshire closed at around USD 73,000 an almost 50% haircut from it’s peak of USD 147,000 and now sits at a 5 1/2 year low.  It was fun to listen to Buffet just several months ago telling people to buy US equities because they were historically cheap. His newsletter came out last week and it looks like he tripped on his own advice and bought some stupid things. Let’s highlight some of the deals from the Oracle of Omaha:

Goldman Sachs – USD 5 billion at USD 115 a share and wait for it…wait for it…gets 10% a year.  Currently GS is at USD 75.65 (down 34%)

GE – USD 3 billion at USD 22.25 a share and gets 10% a year. Currently GE is at USD 7.06 (down 68%)

If you took Buffet’s advice you would be down quite a bit and you wouldn’t be getting the additional 10% kicker that Grandpa Buffet gets. Right now cash is king.

New York Magazine recently ran an exceptional piece on the back story of Pandit’s rise to the top job at Citi.  In summary, he was smart but didn’t know how to play “the game” throughout his career.  The article is sprinked with anecdotes of how Pandit liked to roll with brown people and they even nicknamed his inner circle the “Indian Mafia.”

I’m still clueless on how Citi valued his hedge fund, Old Lane, at USD 800 million.  Even back then when money was flowing it seemed a bit outrageous.

The smartest move that Pandit made was selling off some assets in India. Back in November 2007, Citi sold one of it’s residential properties in South Bombay for USD 8.5 million. Sadly, that might be the only positive balance sheet move by Pandit.

The billion dollar quote from the article:

…When Pandit was born, an astrologer told his family that “whatever this boy touches will turn to gold.”

ouch…I wonder if that astrologer still has a job?