Federal Reserve Considering $85 Billion Bailout of AIG [U.S. Government taking over?]

The Wall Street Journal ^ | 2008-09-16 19:00 Eastern

[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.

[arasina]

It must be nice to be able to get such a nice loan from the Gov't.

The Federal Reserve is not actually "the government". It's a central bank. From Wikipedia:

The Federal Reserve System is an independent government institution that has private aspects. The System is not a private organization and does not operate for the purpose of making a profit. The stocks of the regional federal reserve banks are owned by the banks operating within that region and which are part of the system. The System derives its authority and public purpose from the Federal Reserve Act passed by Congress in 1913. As an independent institution, the Federal Reserve has the authority to act on its own without prior approval from Congress or the President.

I'm just pointing out the unique organization that it is. I'm not saying I agree with bailout loans.

[B4Ranch]

I will loan you whatever amount you need at 30% interest per annum. Hey, that’s what friends are for? Right?

[PA-RIVER]

Good point. We are looking at a Depression if AIG fails.
We already have 100 banks on the watch list.

Bernanke is doing an excellent job keeping the lid on it.

[EGPWS]

...better a slow decline then a trapdoor failure.

Of course however who is designing and running the trap door, regulators or the populous?

Perhaps we are on the right track and the regulators of free enterprise are on track in maintaining freedom and we should give away our hard earned labor to bail out someone else's demise to maintain our God given right to personal freedom.

Just explain to me where personal freedom ends and diligent support of a government for all starts.

[Parley Baer]

“AIG might well be too big to fail, in a way that Lehman was not.”

I think that is the situation. The AIG tentacles are numerous.

[PA-RIVER]

Just prior to the 1929 Depression that was the philosophy.
The 1929 Depression wasn't the first. This is action designd to steer us clear from a complete collapse.

One big domino can get it going.

[VictoryGal]

We may get socialism even without Obama.

And that, my friends, is a sad, sad, state for our beloved country.

[gpapa]

The FEd is stuck on stupid, just like democrats.

[what's up]

Bernanke is doing an excellent job keeping the lid on it

Very much agree. And I don't think Paulsen is doing too bad a job either.

[VictoryGal]

> Rush is insured with AIG!

> He assured us today he did not think this would happen.

I hate to tell you, but Rush still carries water despite his pledge not to. He may be right sometimes but he is NOT necessarily on our side.

[bamahead]

Sigh...

[Drill Thrawl]

““AIG might well be too big to fail, in a way that Lehman was not.””

From my kids prospective, I am too big to fail. Where’s my Go# #amned bailout!?

[EGPWS]

If they crash .... wow.

If they bail it out and sell it off or have them pay back, that might be best.

Sorry my FRiend but that is kinda' a stupid statement.

So prudent others are going to pay for someone else's mismanagement by dictate of government.

All for one, one for all.

Lest we forget personal freedoms as dictated via a document.

[LiveFreeOrDie2001]

Hannity just did a Fox News Alert - AIG’s gonna be bailed out.............

Geez.

[Labyrinthos]

AIG might well be too big to fail, in a way that Lehman was not.

If you owe the bank ten million dollars, then the bank owns you. If you owe the bank 10 billion dollars, then you own the bank.

[Petronski]

That’s how it was put to me twice in my academic career: in the Economics department and in law school.

[trussell]

I have employees. Will the Federal Government pay my debts if I go under?

You could always sue the government for discrimination if they don't...based on the fact that they did for AIG and Fanny Mae and Freddie Mac. /sarcasm

[TigerLikesRooster]

They want to stem the tide. If AIG goes, other big institutions could be in immediate danger. It may buy some time. For how long? In terms of weeks or months?

[markedmannerf]

Looks like the government has agreed to the bail out.
Government announces $85 billion loan to save AIG

[TigerLikesRooster]

It is now a done deal. Maybe we need to update the title of this post.

http://news.yahoo.com/s/ap/ap_on_bi_ge/aig&printer=1;_ylt=At.jKVsOa0tuRdt_tJIamwxv24cA

Government announces $85 billion loan to save AIG

By JEANNINE AVERSA, IEVA M. AUGSTUMS and STEPHEN BERNARD, AP Business Writers

1 minute ago

In a bid to save financial markets and economy from further turmoil, the U.S. government agreed Tuesday to provide an $85 billion emergency loan to rescue the huge insurer AIG.

The Federal Reserve said in a statement it determined that a disorderly failure of AIG could hurt the already delicate financial markets and the economy.

It also could “lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance,” the Fed said.

“The President supports the agreement announced this evening by the Federal Reserve,” said White House spokesman Tony Fratto. “These steps are taken in the interest of promoting stability in financial markets and limiting damage to the broader economy.”