Posted on 09/16/2008 4:22:50 PM PDT by rabscuttle385
The Federal Reserve is considering an $85 billion rescue for embattled American International Group that could leave the government in control of the firm, according to people familiar with the matter, though the structure of a deal remains unclear.
(Excerpt) Read more at online.wsj.com ...
So the U.S. government is now in the business of buying and owning private companies?
That sounds like socialism to me, but what do I know?
The Federal Reserve System is an independent government institution that has private aspects and derives its authority and public purpose from Congress.
Ah, yeah. Right. Kind of like Fannie Mae.
“Independent government institution” my arse. Like there has ever been an government made institution that was independent.
They’re not buying the company or owning it.
They’ve provided them a loan on very, very harsh terms. They were right to demand it - but these are very harsh indeed.
Finance is a very complicated thing. It’s worth recalling - Rupert Murdoch once nearly went bankrupt because a single bank in Cleveland (IIRC) wouldn’t roll over its $2 Million portion of a massive loan.
Not so stupid ... sorry.
Would you rather have 200 banks fail in the next two months? And have 500 go on the watch list?
We will probably get our money back from AIG. They have assets that dwarf the 80 billion. If they fail they kill the economy. Fed reserve had no choice buddy. Again, sorry.
Doesn’t count on FR when it’s Republicans
This is what happens when the derivatives market spins completely out of control for two decades. The government was able to run a special session on Sunday to unwrap the derivatives around Lehman so that only the common shareholders would take a bath. They don’t have that luxury with AIG. An AIG bankruptcy filing would take down scores of banks with it. I say - let it happen. But the folks with the money think differently.
Who is next....
Government bail, government control.
Lest we forget, government doesn't generate revenue.
FREEEEEEDOM!
Or too much choice, "buddy"?
In the early 30’s the fed reserve said screw the banks and let them go under. If we can avoid a recession or depression, its a good deal. We will never know.
Nope, you can’t engage in blackmail. Thomas Jefferson was right, bankers are not to be trusted. Left to their own devices thaey have effectively leveraged every square of land and every minute of honest work in this country.
This has all been done with the Third National Bank of the United States, more commonly called the Federal Reserve. Andrew Jackson was right to kill the second one.
The bailouts will stop when housing bottoms. When house sales and prices stop dropping, and the housing market stabilizes, then foreclosure repossessions will peak the next year, and that will be the peak for losses in the financial industry. After that, the bailouts will stop because the losses will stop. Until then, we have a Depression to avert, hopefully. No guarantee, that.
The Federal Reserve needs the Andrew Jackson treatment.
Was your great grandfather from Neanderthal Germany? Just Curious.
If it’s that big, then it needs to be broken up. Private companies must not be allowed to engage in this blackmail. No private firm this point forward should be allowed to be “Too Big To Fail”.
We’ve gone from trusts buying politicians to banks threatening them.
AIG has been criminally negligent by refusing to sell assets and streamline their business in the past couple years. It's not like they didn't know they needed restructuring at least. Executives out to lunch, too busy feeding at the trough.
Andrew Jackson destroyed it’s predecessor because it was anti-democratic and serving only the moneyed interests of the northeast while it sucked money out of the rest of the country.
The more things change, the more things stay the same.
Maybe AIG should be broken up. But thats another story.
They have many different profitable business groups that allowed them to raise 20 billion in just a few months.
I think they will be fine in a year or two.
One way to consider this is does this government action aid all citizens equally? If it does not then it is tyranny. Not that their isn’t a great deal of that in our government now.
Insurance is a gamble. They have one division that lost this time.
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