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Bernanke's Favorite Money Hole

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March 02, 2009 – Comments (8)

Ben, there's a difference between a company suffering from a temporary "liquidity" problem, and one that's clearly insolvent. At AIG, you have not learned the difference.

8 Comments – Post Your Own

#1) On March 02, 2009 at 8:46 AM, TMFBent (99.82) wrote:

By the way, that's now $180 billion in taxpayer-funded and taxpayer-backed loans and promises to a single piece of garbage company that gambled in securities it could not value.

Socialize those losses! Can't have companies failing when they're too big to fail. And, of course, we can't regulate them as they grow huge and stupid and arrogant, either. That would stifle "innovation."

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#2) On March 02, 2009 at 9:09 AM, djemonk (< 20) wrote:

AIG may have been the biggest travesty foisted on the US taxpayers throughout this whole thing.  Can the government just break it up into pieces and be done with the parts that are now not too big to fail?

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#3) On March 02, 2009 at 9:57 AM, Zanibel17 (97.60) wrote:

Hear, hear!

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#4) On March 02, 2009 at 9:58 AM, outoffocus (22.91) wrote:

*Rage growing quietly*

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#5) On March 02, 2009 at 10:14 AM, socialconscious wrote:

TMFBent (< 20) AIG is a sink hole.What gives it the right and what does it have( 90 % of CDS?) that nobody is questioning it and money is being dispensed like an ATM. Your statement is the lose lose problem in a nutshell for us taxpayers---> Can't have companies failing when they're too big to fail. And, of course, we can't regulate them as they grow huge and stupid and arrogant, either.

djemonk (93.03) Good stuff. If I am rich and own a broken Lamborghini that need more in repair than its worth the best option is to chop it up for parts and tow the rest to the dump at my expense.While AIG is no Lamborghini some its parts are worth something.     

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#6) On March 02, 2009 at 10:48 AM, TMFBent (99.82) wrote:

From the Fed's verbiage on this subject:

Given the systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high. AIG provides insurance protection to more than 100,000 entities, including small businesses, municipalities, 401(k) plans, and Fortune 500 companies who together employ over 100 million Americans. AIG has over 30 million policyholders in the U.S. and is a major source of retirement insurance for, among others, teachers and non-profit organizations. The company also is a significant counterparty to a number of major financial institutions.

Note: not even a whiff of "In the future, the Federal Reserve will strive for more robust oversight of such non-traditional, large, financial institutions, to ensure that they do not become so large as to pose systemic risks like these."

It would be nice if they also said something like, "Clearly, we had no idea how bad the shadow banking system had become, and therefore failed miserably in our regulatory role." But, I suppose that kind of truth is too much for political appointees like these.

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#7) On March 02, 2009 at 12:57 PM, AntiRL (< 20) wrote:

MuhahahahaHAHAHAHA!!!  Maybe what is happening right now is a good thing.  When it is all said in done, no more free market / half-assed oversight / less regulation BS in Wall Street anymore.  Shoving that flavor of Kool-Aid like BS down our throats won't fly.  I actually feel sorry for these clowns now.  They got carried away and now they won't be able to play this game like they want to.  They have absolutely no credibility to stand on.

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#8) On March 02, 2009 at 8:22 PM, vriguy (73.94) wrote:

What really worries me is that public memory is short and politicians are in the laps of big business.  When this pain is over and done with I doubt we'll have credible reforms or regulations to prevent this happening again - in a generation or so. I'm just fed up.

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