| Author | Message | ||
     Ducxl |
So we've now (yet again) bailed out another failing Wall st. firm.Yeah,"AIG" for what? 85 Billion? Who's next in line for MY tax dollars,Morgan Stanley? They cry foul at the mention of Socialized medicine,but line up for the dole when they fail? WTF is that about? What happened to the "free marketers"? Run a company poorly and you go bankrupt pure and simple! Not anymore.. BTW,my state of Rhode Island had something like 135 million tied to "AIG" investments | ||
| Hammeroid |
Your state of Rhode Island made a mistake then. | ||
| Court |
The feds have done nearly 1,000,000,000,000 in bail outs this year. Lehman Brothers was the result of stupidity and a strong argument can be made that one individual bears much culpability. Lehman was small change. AIG was another story and, in the words of the Wall Street SCU, was "too big to allow to fail" in that it would have taken other countries down with it. Lehman folks were stupid, AIG was a victim. Opinions will vary. My wife's entire family are executives on Wall Street and it's interesting to watch this stuff develop. Damn good time, in my book, to be in construction with a public utility.  | ||
| Greenlantern |
A.I.G's corporate reach is/was almost all encompassing in the Insurance industry, this one had to stay afloat. I too think they were a victim of circumstance albeit one who continued some bullish practices in a shaky climate. At least the plumbing firm I work for has them as clear on our books as they are /were a regular client of ours. When Drexel Burham went belly up in '90 they owed us in excess of 1 million for services rendered. It almost tanked us at the time . Luckily a billionaire client of ours ( who got his start to riches from a famous Drexel exec.) decided to buy a new property in the Hamptons shortly thereafter and refurbish all buildings on the 80 acre property 4-5 times within a 7 month period.We were back in the game again. Life is indeed a strange journey and the world is indeed small.  | ||
| Ducxl |
So we promote companies to the point that they can take COUNTRIES down financially? That's not right.It could be used as a weapon of mass destruction | ||
| Court |
>>>At least the plumbing firm I work for Too cool . . . sounds like PAR! Actually the United States economy could well be a weapon of mass destruction. May folks lack an understanding of how entwined the world's various economies are. In fact, in this day and age it's more like a single economy. Be mindful that there are TREMENDOUS opportunities in this moment. | ||
| Ducxl |
May folks lack an understanding of how entwined the world's various economies are. I can admit to that statement.Which is why i asked the question.What could other (developing perhaps?) countries derive of US companies ruining their economies due to corporate greed.I hope i convey my thoughts properly. I may be a dum-dum  Can free markets survive corporate greed? What happens when,say China does it? | ||
| Doon |
on a quasi-related note, I keep meaning to read Confessions of an Economic Hitman. Sounds really interesting.. | ||
| Greenlantern |
Too cool . . . sounds like PAR! No, but here is a hint, We are the only WBE plumber in NYC. | ||
| Raceautobody |
AIG is a publicly traded company. So if the US govt injected $85 Bill into said company. Should not we the tax payers now have equal shares in the amount of $85 Bill in AIG. | ||
| Greenlantern |
122 shares each. It's a start | ||
| Blake |
Can anyone explain to those of us not so knowledgeable, are these so-called "bailouts" not really free money from taxpayers, but more along the lines of loan guarantees, like cosigning for a loan for someone who would otherwise not qualify? Meaning that the "bailout" does not constitute free money funded by taxpayers unless the "bailout" beneficiary is unable to repay the loan, no? | ||
| Ducxl |
I wonder how many millions their CEO took in BONUSES last year? I've actually read where the "Fed" is only invested long enough to recoup our money from the sales of "AIG" assets. I also wonder what our return will be? Bailing out private Wall st. companies makes a mockery of Capitalism | ||
| Greenlantern |
Can anyone explain to those of us not so knowledgeable, are these so-called "bailouts" not really free money from taxpayers, but more along the lines of loan guarantees, like cosigning for a loan for someone who would otherwise not qualify? Meaning that the "bailout" does not constitute free money funded by taxpayers unless the "bailout" beneficiary is unable to repay the loan, no? Wow, not even Ice Cream can freeze a brain like you can Blake.  If I got the gist of your question  right, then I would say yes. But that brings up this question., Are we (Taxpayers) now the creditors/financiers of this venture? Or are we as 80% majority shareholders in AIG subject to "Caveat Emptor"? | ||
| Wolfridgerider |
Had to Wikipedia that one.... Caveat emptor is Latin for "Let the buyer beware".[1] Generally caveat emptor is the property law doctrine that controls the sale of real property after the date of closing. Under the doctrine of caveat emptor, the buyer could not recover from the seller for defects on the property that rendered the property unfit for ordinary purposes. The only exception was if the seller actively concealed latent defects. The modern trend in the US, however, is one of the Implied Warranty of Fitness that applies only to the sale of new residential housing by a builder-seller and the rule of Caveat Emptor applies to all other sale situations (i.e. homeowner to buyer).[2] Many other jurisdictions have provisions similar to this. Before statutory law, the buyer had no warranty of the quality of goods. In many jurisdictions, the law now requires that goods must be of "merchantable quality". However, this implied warranty can be difficult to enforce, and may not apply to all products. Hence, buyers are still advised to be cautious. | ||
| Ft_bstrd |
AIG was in the process of securing private financing. The failure of Lehman Bros. and Merrill Lynch dried up the market. It was mostly bad timing. Had LB and ML held off for a couple of weeks or a month, AIG wouldn't have been in the news at all and none of us would have known anything about it. My understanding was that the "loan" was really a backing to private lenders that if AIG defaulted the Federal Government would back the debt. Think of the US Gov't as a reinsurer. It's like your parents co-signing on a loan. They did receive company stock as collateral for that transaction. As 80% stake, they have the ability to hire and fire management. | ||
| Ft_bstrd |
AIG has a total value of $1.05T. $85B is 8.5% of it's total value. It's a lot of money, but it's not a very large percentage of the total value. What would have been the total market losses in the event of a total fear driven market collapse? Quite a bit more than $85B I'd suspect. | ||
| Spatten1 |
Should not we the tax payers now have equal shares in the amount of $85 Bill in AIG. The US government how controls 79.9% of AIG. 80% of the $85 billion is backed by AIGs healthy insurance business, so only 20% is at risk. The money lent by the government is at LIBOR plus 8.5%. This is no easy way out for AIG, and the Feds will reap most of the benefit when all of the dust settles. | ||
| Davegess |
The taxpayers now own AIG and the shareholders have seen their value decline by 80% or so. Plue we earn a very healthy rate of interest on the money. | ||
| Raceautobody |
} AIG has a total value of $1.05T. $85B is 8.5% of it's total value. It's a lot of money, but it's not a very large percentage of the total value. Liquidating just 10% of AIG's asset holdings would then let it weather this storm. But no, lets get big brother to "co-sign" an $85 Bill loan. AIG's balance sheet must have alot of red on it. With $1.05T of value it should not be a problem to get a loan for $85 Bill without a "co-signer". } | ||
| Jlnance |
Section 8 of the Constitution:
Somehow bailing out big companies doesn't seem to "uniform" too me. I thought the same thing about the Chrysler bailout. | ||
| Spatten1 |
Bailing out private Wall st. companies makes a mockery of Capitalism 1) this is a public company 2)Insurance is regulated, so it ain't capitalism anyway 3) it's a huge insurance company, not an investment bank. Different industry entirely, and that is why the Feds stepped in. People would be driving with bad auto insurance, life insurance would not pay out, small businesses would lose their insurance. Since the Feds can now sell off the various business units and policies (assets), they will be taken on by another insurance carrier or financial institution that will keep the insurance in effect. The AIG shareholders will not make out well in this one, but the individuals and businesses that have paid insurance premiums will not get screwed due to the orderly disposition of assets. | ||
| Spatten1 |
Liquidating just 10% of AIG's asset holdings would then let it weather this storm. But no, lets get big brother to "co-sign" an $85 Bill loan. All true with given time. However, they have a liquidity crunch due to the Lehman and Merril fiasco and have zero time. The feds have to step in to give them the time it takes to sell those assets. Otherwise they are gone, can't pay employees, etc. This is like when an owner pays a general contractor 90 days late, the general does not pay the subs, and the subs can't pay their people. It normally takes 3-4 months of due diligence to sell a large business unit. Many moving parts are involved. | ||
| Court |
>>>Bailing out private Wall st. companies makes a mockery of Capitalism This is not without precedent. The federal government has done this EXACT thing in the past. Some of you are too young to recall the Resolution Trust Fund that was created to resolve the "Savings and Loan Crisis". I am really bullish. Moved entire portfolio to treasuries yesterday, got a decent yield and at today's auction the yield went to 0%. Won't be much traffic at 0%. We were do for some of this. The banks bear some culpability and so do the bozos who were earning $35,000 a year and taking "nothing down, 110% financing" on McMansions. There is great opportunity at the moment. | ||
| Spatten1 |
The banks bear some culpability and so do the bozos who were earning $35,000 a year and taking "nothing down, 110% financing" on McMansions. Don't forget Fannie May, where the buck stops. They approved and bought everyone of those half-assed loans. I think the ultimate culpability is with them, not to excuse the bozos whom deserve to be living in Mom's basement now. | ||
| Rainman |
There is great opportunity at the moment, if you're in position to take advantage of it. Unfortunately, I went to college to get a journalism degree. I should have studied something of value. Oh well, it's been fun, if not fiscally productive. | ||
| Wolfridgerider |
How much money did Fannie Mae, Freddie Mac give to Obama? | ||
| Glitch |
Only like 126thousand or so | ||
| Cityxslicker |
Shiate if they want to assume some debt, I have a student loan they are welcome to. | ||
| Greenlantern |
We were do for some of this. The banks bear some culpability and so do the bozos who were earning $35,000 a year and taking "nothing down, 110% financing" on McMansions. Sort of like handing a Crackhead $20.00 on the promise of getting $50.00 back the next day? No actually the Crackhead thing is probably more fiscally responsible. |
