AIG set to pay $100 million in retention bonuses

If you aren't outraged by AIG yet, you will be. According to The New York Times, AIG will distribute about $100 million to the very division that was the root cause of the company's meltdown. Even though the employees of the financial products unit agreed to take a 10% cut in their bonuses, the contracts to pay them were in place before the taxpayers bailed them out.

To put this into perspective, AIG's Financial Products unit (AIGFP) was the impetus behind the derivative contracts that caused the company to implode. Basically, they made millions of dollars by selling insurance contracts on mortgage-backed securities (MBS's). When it became clear that the MBS's were losing value, AIGFP was forced to pay out the insurance on the contracts... but they didn't have the money and the taxpayers were forced to bail them out. Now that same division is set to receive $100 million in bonuses. Talk about pay for failure.