Think you should see this.
That's no surprise. A discussion should ensue that this debacle was facilitated by the self-absorbed, carefree, no-responsibility crowd-----who espouse "moral relativity." But don't hold your breath. Read on
The (cough) "brains" behind some of these cockamamie finanical instruments---including credit default swaps---was Lehman Bros honcho. Dick Fuld. Fuld never tired of telling people that Lehman was built to triumph in adversity........his way of motivating the 26,000 employees at his command......which enabled him to take-home $300 million one year alone.
But it also led Fuld and his closest associates to say things that had no connection whatsoever to business reality. Fuld's delusion – compounded by the powerful and destructive forces of ambition within the bank – was propelling Lehman towards catastrophe. The death spiral beckoned. Lehman went belly-up.
THE GLOBAL MELTDOWN UP CLOSE Lehman, Citi, and other Wall Street smart*****...... "securitized and packaged" bank loans that were sold globally as profit-making financial instruments. Financial gain was predicated on the notion that mortgages were a reliable "stream of income" .......b/c since time immemorial, conscientious people owned a moral obligation to repay loans.
We now know the mortgages were the infamous toxic subprime mortgages that went into default b/c they were given to deadbeats who could not pay.......and that they signed off on documents falsified with inflated incomes, and so on.
Thus the revenue stream could not be sustained and the financial instruments fell apart.
NOTE AIG is at the eye of the hurricane b/c its global Financial Products division "insured" more than a $trillion dollars in virtually worthless bank loans....and could not payoff claims. AIG's Financial Products division "insured" more than a $trillion dollars in virtually worthless bank loans.........these loans were "securitized and packaged" as profit-making financial instruments-----BUT they were built on the now-infamous subprime mortgages---mortgages that people could not payback and should never have received.
AIG is an insurance company and is SUPPOSED to hold in reserve monies that the insured might rightfully request in the form of "claims." Some of the insured might never put in a claim.....but the money has to be there....just in case.
When the house of cards collapsed---AIG did not have the money to pay all the claims the insured were demanding. That's why US tax monies are going to foreign companies-----b/c they were "insured" by AIG. Keep in mind that insurance policies are based on "faith" that the insurer respects its "moral" obligation to payoff claims.
As I said----moral relativity.