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Are some of the things you read for real?

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September 16, 2008 – Comments (8)

The insolvency of AIG has been obvious for a long for anyone actually taking the time to look.  But, I have to love the reasoning given that it might survive...

"One sliver of optimism for AIG last night was that much of its exposure is related to credit default swaps....AIG's counterparties on these instruments include many Wall Street firms, which may have an incentive not to demand more collateral so as not to trigger a wider panic."

Insane...

 

8 Comments – Post Your Own

#1) On September 16, 2008 at 8:13 PM, TMFBent (99.80) wrote:

I got an even more insane idea for you. The "personal responsiblity" and "ownership society" administration puts taxpayers on the hook for $85 billion in loans to AIG because this for-profit company, which has enriched legions of well-connected insiders as well as "risk-bearing" shareholders, is now deemed too important to fail, so important that those folks who signed on to take the investment risk deserve taxpayers to bail them out of their problems...

Oh, wait...

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#2) On September 16, 2008 at 8:19 PM, Evlampius (< 20) wrote:

100% agree with Bent!!!  Damn it!

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#3) On September 16, 2008 at 8:57 PM, abitare (49.76) wrote:

Comrades,

It is for the benifit of the state, we must all sacrifice. 

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#4) On September 16, 2008 at 9:41 PM, dwot (45.74) wrote:

TMFBent, I just read the $85 billion confirmed.

Unbelievable...

 

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#5) On September 16, 2008 at 10:37 PM, wrote:

Chk99 works for Charles Schwab. don't let him steal your personnal info like he did mine.

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#6) On September 16, 2008 at 11:25 PM, StatsGeek (29.35) wrote:

We taxpayers are all going to get rich owning these cherry assets.  Paulson even said we could make a profit on FNM and FRE.  Yay us!!

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#7) On September 17, 2008 at 12:02 AM, Donnernv (< 20) wrote:

I'm a little discouraged to see people whom I respect react exactly as do the much less intelligent folks in the blogs on various forums.

The "bailout" of AIG can be validated in my mind because you cannot expect the US financial world to maintain if the largest insurer in the world goes down  We are in a crisis maintenance mode, and the Fed and the Treasury are doing their damn best to keep the thing patched together.

AIG is not "broke".  Their assets far exceed their liabilities.  Cash is tight.  They need a loan to permit an orderly sale of assets to reestablish their balance sheet.

And the shareholders did not skate.  For the $85 billion loan, they, in effect, gave up 80% of their ownership.  Will the new majority owners (us) get our money back?  It is a loan, not a gift.  And we own 80% of the joint.

Tough deal by a tough lender (us).  The Fed and the Treasury have done many stupid things in the last 20 years.  This is not one of them.

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#8) On September 18, 2008 at 3:30 PM, FleaBagger (28.14) wrote:

Sharetaxholdpayers. That's us!

As a real conservative, I must say that Donnernv is exactly what I dislike about the Republican party, assuming he is a Republican. While he is probably closer to my views on some things than, say, Devoish or DemonDoug, nevertheless, using gov't money to bail out big businesses is no better than using gov't money to bail out individuals, small businesses, or people with a public service degree.

As for it not being a bailout, I know what would be even less of a bailout: doing nothing. Why are politicians always afraid of doing nothing? Reagan, after Black Monday 1987, proved that doing nothing works. Hoover proved that trade protectionism and other gov't help doesn't. FDR made sure everyone learned it the hard way. Now, everyone has forgotten.

Were it not for people who believe in free markets except when it's scary, we would have a truly conservative Republican party. Then we could choose between interventionism (Democrats) and freedom (Republicans). As it is, we're stuck choosing between big business welfare (Republicans) and worthless bureaucrat lard-@$$ welfare (Democrats).

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