Posted on 03/18/2009 11:12:59 PM PDT by Cedar
That’s right and we should have let AIG fail — oops, that’s right, the government allowed them to grow to the point they were too big to fail... that is where my issue is, this business of letting companies suck up companies and more companies until they all tumble or we have to bail them out... look at BofA buying Countrywide and more... till they, like Citi all needed a bailout of their own.
I mentioned the 25 just out of shock that those few were responsible for the entire meltdown. I figured those at the very top (CEO and others?) were the ones who kept the 25 “off limits.”
I know Enron was fraud. In this case, with the risk management team forbidden to monitor the 25, I just wondered if shareholders would consider that enough for a lawsuit.
Again, I’m just asking to understand the situation better myself. These are questions I have after hearing the testimony. But not knowing business law myself, I thought I’d get answers here.
I have to admit that I agree with people who say that we've never faced a crisis quite like this one - ever.
In a strange paradox, some of this was brought on by too much regulation and some what brought on by too little regulation or at least not the proper enforcement of regulations that were already on the books. And, contrary to what Rush and Hannity say, everyone's to blame for this mess - Dems and Republicans alike.
I have three thoughts - 1)You can't loan money to people that probably won't be able to pay it back, even in great economic times - 1) You can't let financial firms operate like its the great unexplored frontier and create investment schemes (for lack of a better term) that are so complicated that the people who created them don't even understand how they work. 3) And finally (this is the one that's going to hurt conservatives) - some of the massive consolidation that we've seen in the financial sector the last 25 years has really exacerbated this debacle. We've got fewer banks doing less and less banking - they're selling insurance, equities, futures, commodities, and every damn investment vehicle in between. It's been a gathering storm on the horizon and it finally arrived and we are now going to have to clean-up (if we survive) the resulting flood.
AIG and many other business concerns dump tons of cash into political contributions in the hope they will benefit as a result. They should know better. They don't.
I never would have agreed with your point five or eight years ago, but I was wrong. And, this is where the GOP has some culpability in this whole mess. As I said in an earlier post, we let American banks get too big and let them stick their fingers in too many pies.
Deregulation had MANY, MANY great benefits. Unfortunately, we are now seeing some of the unintended consequences. But, as Greenburg has pointed out a lot this past week, we shouldn't throw the baby out with the bathwater. Some reforms, serious reforms, need to be taken, but if we embrace a French-type of banking system (as I believe Obama and others ultimately want to get to) we are sunk as a nation for a generation or longer.
How true is it that AIG does a lot off books deals with the DOD in the form of Black-ops?
Really, it was not only Dems drilling Liddy today, but also the Repubs too.
With AIG, Fannie and Freddie, and others, it all sounds like a massive spider’s web. Almost too hard to untangle the details. But those comments about the risk management team being kept away from that risky derivatives group really got my interest.
What really happened here was the federal government sticking it's nose where it did not belong. George Washington, among others, are spinning in their graves.
It depends on whether or not the stockholders were informed about the risks the company was taking on. Nothing you have posted suggests that you have seen a report that this 25 were hidden from the stockholders.
Possibly if CSPAN does a repeat showing of Liddy’s testimony, you can hear his comments about the group and comment on it. I’m most likely making it all clear as mud.
I do appreciate everyone’s comments here. Helps me to understand the situation. Guess I’m off to get some sleep now and will read more in the morning.
Isn’t it against the law to write insurance policies without sufficient capital to cover losses? I would think this would be insurance fraud.
someone else posted a while back that some of the money AIG will give to foreign banks-hedge funds more than banks really actually supports Islamic terrorists. Anyone know anything about this?
I have no doubt that Fannie and Freddie were involved. However, there is no way this is limited to Fannie and Freddie-not with the enormous scope of losses and these hedge funds as well. Some reports (forgot who) actually looked at the Credit Default Swaps which Iceland held...there were other investments besides mortgages which had these CDS’s...these guys actually took bets on municipal bonds in Manhattan (betting Manhattan would fail) also.
I have heard that the Govm’t can’t let AIG go under or have an investigation into their operation due to all off the books monies they are involved in for the Govm’t.
These Dems are their own nefarious 'palace farce'. . .and America's worst nightmare of bad actors.
Whatever, we can be sure; that much of what we have seen so far; is scripted so as to protect the guilty.
That makes sense because usually Democrats would be going after AIG with a vengeance...it stinks.
I’m certain it is! And, until recently AIG had no problem with that.
Why do they have a problem now?
Easy - mark to market rules (both in the US and in Europe)!
As long as mark to market continues to exist AND markets remain volatile - neither AIG, nor any major bank, nor the economy will recover.
Unfortunately, market volatility will not likley end even if mark to market were replaced. Thus BOTH problems need to be remidies at the same time. Thue “cure” for the one however, is poison for the other. Thats why we see NO plan from anyone other than “pump money into the market” and bailout bailout bailout which is like giving a severe accident victim an aspirin. He continues to bleed all over the place, but at least his headache is gone.
what involvement does the federal reserve have in the AIG bailout? According to this it sounds like a LOT:
Interesting thread. This whole AIG thing stinks from the top down. And I’m talking new administration and Washington.
very informative post, thanks
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