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View Full Version : Economics AIG may need to be rescued by the feds


alnorth
09-16-2008, 02:14 PM
EDIT: http://i246.photobucket.com/albums/gg81/Northjayhawk/siren.gifFeds seize (http://www.iht.com/articles/2008/09/17/business/17insure.php) 80% of AIG in return for $85B loanhttp://i246.photobucket.com/albums/gg81/Northjayhawk/siren.gif

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BFFBD5696-FF08-4CB4-9BF8-47F44D7B0B43%7D&siteid=yhoof2

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4767140.ece

http://money.cnn.com/2008/09/16/news/companies/AIG/?postversion=2008091613

All eyes are on AIG today. Because of the bad mortgage securities they hold or insure (maybe only $20-30B worth), their ratings were downgraded today. Because of that downgrade, they must now come up with a pile of cash to satisfy their trading partners. In all, they need about $70B by tomorrow to stay alive. If youve been looking at the stock market, it rallied a bit today because there are some rumors floating around that the feds have decided to loan AIG the money.

This is not just another investment bank, this is one hell of a massive and important company. (employing over 100,000 people worldwide) Lehman Brothers and Bear Stearns are a lot less significant in comparison to this giant that could crack the world if it falls.

Basically, AIG is the largest insurance company in the world who got in trouble because they invested some of the premium they collected into the subprime garbage. (edit for clarification: I think they mostly got in trouble by insuring too much of the mortgage-backed securities, rather than holding them directly) Primarily they deal in life insurance, have a big share of the commercial insurance market, and are one of the biggest bond insurers in the world, which helps keep the world markets stable day to day when smaller companies go bust.

Working for a competing insurance company, we are looking at this today with a mixture of speculation on our opportunity to grab some of their P&C business, along with a bit of horror that this giant could die. I admit that Fannie and Freddie are bigger, and I do not usually panic easily at ALL on the economy, but AIG is one of the reasons why we are usually stable every year. If they fall then all bets are off. The glass is shattered and we are all in neverland.

The infuriating thing is that AIG is NOT INSOLVENT! They have plenty of illiquid assets to eventually pay off their debts and limp along the road to recovery, but they are in a pure liquidity crisis. Its like you have a huge gambling debt and you are going to close on the sale of your house in 2 months to pay it off and move into a smaller place, but Vinny shows up at your door with a crowbar and a gun wanting the money NOW. You can get it in a couple months, but he wants it tonight or he'll break your knees. AIG has done the equivalent of running to all their family members asking for a quick loan, but no one has the money to spare right now, the feds are the only ones left.

I think they need to save AIG. This is not really a pure bailout of a company going bust that should be allowed to die like Lehman Brothers and Bear Stearns. AIG's death would be worse than that, and they only need a short term loan to buy them enough time to sell off some assets.

SBK
09-16-2008, 02:18 PM
Bend over Johnny, it's gonna be a long night!

Ari Chi3fs
09-16-2008, 02:21 PM
Ron Paul was right. The economy is in massive financial ruin. Good times. Thanks Bush!

SBK
09-16-2008, 02:22 PM
Ron Paul was right. The economy is in massive financial ruin. Good times. Thanks Bush!

I suppose you can look at the good side and see that we can learn from these mistakes and be better for it, but for the time being we're in a giant self-made mess.

banyon
09-16-2008, 02:29 PM
The infuriating thing is that AIG is NOT INSOLVENT! They have plenty of illiquid assets to eventually pay off their debts and limp along the road to recovery, but they are in a pure liquidity crisis. Its like you have a huge gambling debt and you are going to close on the sale of your house in 2 months to pay it off and move into a smaller place, but Vinny shows up at your door with a crowbar and a gun wanting the money NOW. You can get it in a couple months, but he wants it tonight or he'll break your knees. AIG has done the equivalent of running to all their family members asking for a quick loan, but no one has the money to spare right now, the feds are the only ones left.


Isn't it always a run on the bank?

alnorth
09-16-2008, 02:29 PM
In my opinion, Democrats are every bit as much to blame, they just have the good fortune to not occupy the white house right now. This was bipartisan stupidity.

(Reason why, is that no one has argued more vehemently that lenders MUST give mortgages to unqualified low-income people than the Dems. The GOP is to blame as well because rather than oppose this crap they played along and encouraged garbage loans too, and Wall Street was happy to go for the profit without adequate concern for the risk)

alnorth
09-16-2008, 02:32 PM
Isn't it always a run on the bank?

ya in a way it is. In this case, its not ordinary people breaking down the doors of George's bank to get their money while Mr. Potter looks on.

BigChiefFan
09-16-2008, 02:36 PM
I don't give a shit which party is to blame-I think the bigger issue is OUR GOVERNMENT is to BLAME. It's time to make all transparent and accountable in our government.

jiveturkey
09-16-2008, 02:36 PM
I don't give a shit which party is to blame-I think the bigger issue is OUR GOVERNMENT is to BLAME. It's time to make all transparent and accountable in our government.Yep/rep

WilliamTheIrish
09-16-2008, 02:38 PM
Last I heard on Sunday, The Fred "Sorry, no mas". Let them find bridge funding and see what happens.

alnorth
09-16-2008, 02:50 PM
Here's a couple lovely quotes I found.

"Regulators knew that if Lehman went down, the world wouldn't end. But Wall Street isn't remotely prepared for the inestimable damage the financial system would suffer if AIG collapsed"

Analysts point out that unlike Lehman, AIG appeared to be facing short-term funding needs rather than questions of solvency or doubts about its business model, and should be able to repay its debt to taxpayers down the road.

AIG has tentacles into damn near everything. Hell, along with the huge market in credit default swaps, they even insure things as exotic as sports teams and even write terrorism insurance.

BigChiefFan
09-16-2008, 02:52 PM
Guess who fits the bill? This is a disgrace.

banyon
09-16-2008, 03:01 PM
ya in a way it is. In this case, its not ordinary people breaking down the doors of George's bank to get their money while Mr. Potter looks on.

It's worse really. At least that scenario just involves some of our citizens losing money to the others. This one involves our money becoming worthless and our children and grandchildren paying for years to China.

RJ
09-16-2008, 03:24 PM
Is there such a term as "corporate socialism"?

RJ
09-16-2008, 03:30 PM
It's worse really. At least that scenario just involves some of our citizens losing money to the others. This one involves our money becoming worthless and our children and grandchildren paying for years to China.



I already told my daughter not to give them a dime. I told her when the bills come she should just throw them in the trash. F*** those Chinese! Let 'em come and get their damn money!

BigChiefFan
09-16-2008, 03:31 PM
I don't like where the country is heading. This is a disaster.

Stewie
09-16-2008, 03:41 PM
AIG WILL be bailed out. The Fed thought that letting Lehman fail would be countered by the buyout of Merrill and it would be smooth sailing for now. That didn't fly in most financial analyst's eyes and now it's hat in hand to the Fed begging bowl for AIG, WaMu, UBS... and on and on and on. We as taxpayers are so screwed. And this has nothing to do with who's President. These money changers are much more powerful.

RJ
09-16-2008, 03:45 PM
Stewie, is this a good time to convert all my cash and assets into gold and hide it under my mattress?

Friendo
09-16-2008, 03:56 PM
I already told my daughter not to give them a dime. I told her when the bills come she should just throw them in the trash. F*** those Chinese! Let 'em come and get their damn money!

look on the bright side--she can probably work it down by limiting you to one grandchild.

with six you get eggroll.

Stewie
09-16-2008, 03:57 PM
Stewie, is this a good time to convert all my cash and assets into gold and hide it under my mattress?

If you sell all your assets you won't have a mattress in which to hide your gold.

My thinking in the last 18 months is to sit tight with conservative investments. Yeah, I own gold, but it's only (well, was) as a hedge. Funny thing is that I started to buy gold and gold stocks in 2002 and it's now my 800 lb. gorilla... dwarfing my other returns by a long shot. I've sold some of those gains and paid down all my debt except the $48K left on my mortgage.

I'll finish by saying that everything the Fed is doing is dollar negative in a huge way. They're doing everything they can to make the economy look sound for seven more weeks. After that, all bets are off.

RJ
09-16-2008, 04:06 PM
Stewie, thanks, that's a good point about the mattress.

I'm just worried that in 6 months our savings will be worthless.

The good news is that it isn't all that much!

eazyb81
09-16-2008, 04:17 PM
The infuriating thing is that AIG is NOT INSOLVENT! They have plenty of illiquid assets to eventually pay off their debts and limp along the road to recovery, but they are in a pure liquidity crisis. Its like you have a huge gambling debt and you are going to close on the sale of your house in 2 months to pay it off and move into a smaller place, but Vinny shows up at your door with a crowbar and a gun wanting the money NOW. You can get it in a couple months, but he wants it tonight or he'll break your knees. AIG has done the equivalent of running to all their family members asking for a quick loan, but no one has the money to spare right now, the feds are the only ones left.


And that's what I despise about FAS 157, a.k.a. the new mark-to-market rule. We have to keep marking down these illiquid assets because there currently is no market, but that shouldn't necessarily mean they are worthless. It is a loophole in the system that is absolutely crushing financial firms.

eazyb81
09-16-2008, 04:19 PM
I don't give a shit which party is to blame-I think the bigger issue is OUR GOVERNMENT is to BLAME. It's time to make all transparent and accountable in our government.

WTF? How many posts have you made in these threads over the past two days explicitly or implicitly blaming Bush and the GOP?

Al said it earlier just as I have said over and over again - this is not a Republican or Democrat issue, everyone is to blame.

Stewie
09-16-2008, 04:21 PM
And that's what I despise about FAS 157, a.k.a. the new mark-to-market rule. We have to keep marking down these illiquid assets because there currently is no market, but that shouldn't necessarily mean they are worthless. It is a loophole in the system that is absolutely crushing financial firms.

And mark-to-model works? Come on! I think my house is worth $2,000,000 but no one will buy! Those dumbasses! Don't they know I know the value of everything I own and they should PAY!!!

Those illiquid assets ARE WORTHLESS!!! That's the whole ****ing problem!

eazyb81
09-16-2008, 04:25 PM
And mark-to-model works? Come on! I think my house is worth $2,000,000 but no one will buy! Those dumbasses! Don't they know I know the value of everything I own and they should PAY!!!

They ARE WORTHLESS!!! That's the whole ****ing problem!

Neither is perfect, and we should have seen that coming. Also, I'll definitely place the majority of blame on the banks for poor risk management. But mark to market was intended to make the system more fair, rather than bring it to its knees. Illiquid should not equal worthless.

eazyb81
09-16-2008, 04:27 PM
And while I'm on it, I am f'n pissed that the market was up 140 today. WTF is that? We need some major capitulation to finally puke this crap up and start healing, but we keep going w/ this BS of up one day, down the next, crazy volatility and uncertainty. We need the bottom to just fall out so we can finally move forward.

Stewie
09-16-2008, 04:27 PM
Do you understand mark-to-model? That's how these banks are in the shape they're in.

Stewie
09-16-2008, 04:28 PM
And while I'm on it, I am f'n pissed that the market was up 140 today. WTF is that? We need some major capitulation to finally puke this crap up and start healing, but we keep going w/ this BS of up one day, down the next, crazy volatility and uncertainty. We need the bottom to just fall out so we can finally move forward.

It's called the "President's Working Group."

***SPRAYER
09-16-2008, 04:29 PM
http://www.usnews.com/blogs/sam-dealey/2008/9/12/responding-frank-ly--i-fire-back-on-fannie-mae-and-freddie-mac.html

Let's step back and take a look at what happened in the Fannie-Freddie debates of 2003-2005.

In 2003, a spate of warnings, investigations and scandals concerning Fannie and Freddie led Snow to three recognitions—that Fannie and Freddie had strayed well beyond their traditional investment roles; that the two lenders were grossly overextended relative to their capitalization; and that their bookkeeping was shoddy or crooked. Obviously, this was a problem; the siblings touched nearly half of all home loans, and in an unpredictable market their mismanagement was flirting with catastrophe. Since cutting off Fannie and Freddie from the government teat and forcing them to compete in the private sector would be politically impossible, Snow proposed to bring the giants under one authority that would rigorously limit their exposure and ensure they stayed within acceptable limits of risk.

A month after warmly receiving Snow's proposal, House Finance Chairman Mike Oxley unveiled a bill. It lacked two key components, however. First, the new regulator of the sibs would not be Treasury itself but a newly created "independent unit" within Treasury. That's the same arrangement that already existed—the sibs were presently under an "independent unit" that time and again proved incapable of detecting Fannie and Freddie shenanigans. Second, the bill would grant the Housing department oversight—largely toothless because it lacked the authority to contain the investment risks the sibs were taking. Faced with stiff opposition from the White House, the Ohio Republican pulled his bill the night before the committee's final vote.

In 2005, Oxley (with Frank) tried again. The legislation was stronger than before, but again failed to provide a regulator with the authority to curtail the kinds of assets Fannie and Freddie could hold. Indeed, the bill even expanded Fannie and Freddie's abilities to purchase mortgages. Financially responsible people saw the writing on the wall and threw their support behind a tougher Senate bill.

Regardless, Oxley's bill passed the House and Frank now leaves the impression that he supported it. After chiding the Bush administration for failing in its 2003 reform effort, Frank wrote in a Monday press release: "It was not until 2005, when the House, on a bipartisan basis, and over the President's objections finally passed a reform bill." And in a Tuesday interview with Fox News, Frank said: "I did collaborate with [Republican] Mike Oxley in 2005 in passing a bill which the Senate didn't act on."

In fact, praises for bipartisanship notwithstanding, Frank voted against the 2005 bill. As the chairman tells it, this is because "the Republican majority inserted language at the last moment that would prohibit religious organizations from participating" in providing low-income housing financing. "It is only because of this ridiculous action by archconservative Republicans that I cast my vote 'no.' "

That's a pretty loosey-goosey rendering of what went down. The provision Frank references was his pet project, which would designate 5 percent of the sibs' after-tax profits for grants to outside organizations to promote low-income housing. As Frank says, the grants could have gone to religious groups like the Catholic and Lutheran churches (it's good to see Frank now fully supports Bush's faith-based initiative, by the way) but also to decidedly secular and politically active organizations like the Child Welfare League of America and Volunteers of America.

Many in Congress opposed Frank's baby because it was a step backward in reform. After all, the whole point in reforming Fannie and Freddie was to submit control of the sibs to one authority—not divert their suspect profits to even more entities with limited accountability. Some voiced concerns that the outside groups would leverage the grants for political causes. What does a homeowner say, after all, if the fellow who got him his house says vote for so-and-so? Others worried about governance. What adequate safeguards would ensure these monies don't end up in other activities or pockets? But the larger concern was that primarily nonfinancial institutions would suddenly be in the position of extending home loans to the most vulnerable and unqualified—thus reinforcing the worst practices of what had already occurred elsewhere.

Frank is routinely described in the press as one of Fannie and Freddie's staunchest allies on Capitol Hill, and that support enabled the crisis in which Americans—both homeowners and taxpayers—now find themselves.

Due to lax oversight, Fannie and Freddie helped lull the gullible into purchasing homes far beyond their means, all the while threatening the companies' own financial health. In turn, that only put those homeowners and the sibs' shareholders at risk too. And just as critics of Fannie and Freddie had warned for years, the walls came tumbling down.

Frank now says he's all for riding herd on Fannie and Freddie. No doubt he'll prove an able No. 2 to Treasury, which now holds the sibs in conservatorship. But it's a shame Frank wasn't so reform-minded back when it might have mattered. I'll return now to that embarrassing quote from the New York Times in 2003 that kicked off this exchange—and which Frank never addressed.

"These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

At the time Frank spoke those words, a lot of questions were being raised about the sibs' financial health. Indeed, in the case of Freddie, both the Securities and Exchange Commission and a U.S. attorney had launched investigations. Five years and a catastrophic meltdown later, the only exaggeration seems to have come from Fannie and Freddie and their champions on the Hill.

The good news, though, is that now there's a surfeit of affordable housing. Too bad few have the money or credit to purchase some.

eazyb81
09-16-2008, 04:36 PM
Do you understand mark-to-model? That's how these banks are in the shape they're in.

Yes, but thanks for offering a neat lesson. Banks aren't in this mess due to mark to model; they're in it because of bad bets on MBS that fell off a cliff due to the housing crisis.

Dick Bull
09-16-2008, 04:37 PM
Yes, but thanks for offering a neat lesson. Banks aren't in this mess due to mark to model; they're in it because of bad bets on MBS that fell off a cliff due to the housing crisis.


shit, I thought it was saddam hussein

:shrug:

Stewie
09-16-2008, 04:45 PM
Yes, but thanks for offering a neat lesson. Banks aren't in this mess due to mark to model; they're in it because of bad bets on MBS that fell off a cliff due to the housing crisis.

Dude, don't patronize me. I know these markets better than you, I guarantee it. They bought Mortgage Backed Securities based on their models AND with our fractional banking rules they were able to leverage in a big way. When the housing market started to crumble they ABSOLUTELY showed ALL balance sheets with mark-to-model which multiplied the problem by 100. Saying that the problem is due to the housing crisis is narrow-minded. The problem is due to the DERIVATIVES on the housing market.

Stack it up, wrap it up, tie it in a bow!

jidar
09-16-2008, 04:47 PM
And that's what I despise about FAS 157, a.k.a. the new mark-to-market rule. We have to keep marking down these illiquid assets because there currently is no market, but that shouldn't necessarily mean they are worthless. It is a loophole in the system that is absolutely crushing financial firms.

YOu don't like FAS 157 huh? You want another Enron?

alnorth
09-16-2008, 04:48 PM
To be clear, by illiquid assets I'm not referring to subprime garbage. Aside from insurance, AIG is also a gigantic holding company. Hell, they even have an aviation company that rents out airplanes and makes a small profit. They can sell off some of these smaller profitable companies to interested buyers to save themselves, but that sort of thing takes time.

Aside from that, their insurance policies themselves are profitable as well, and can pay off the debts over time.

jidar
09-16-2008, 04:49 PM
Dude, don't patronize me. I know these markets better than you, I guarantee it. They bought Mortgage Backed Securities based on their models AND with our fractional banking rules they were able to leverage in a big way. When the housing market started to crumble they ABSOLUTELY showed ALL balance sheets with mark-to-model which multiplied the problem by 100. Saying that the problem is due to the housing crisis is narrow-minded. The problem is due to the DERIVATIVES on the housing market.

Stack it up, wrap it up, tie it in a bow!

And this just shows that we should be keeping banks and investment brokers as separate entities. If it wasn't this it would be something else anyway, greed always wins.

Stewie
09-16-2008, 04:57 PM
To be clear, by illiquid assets I'm not referring to subprime garbage. Aside from insurance, AIG is also a gigantic holding company. Hell, they even have an aviation company that rents out airplanes and makes a small profit. They can sell off some of these smaller profitable companies to interested buyers to save themselves, but that sort of thing takes time.

Aside from that, their insurance policies themselves are profitable as well, and can pay off the debts over time.

There's a reason AIG is a HUGE problem. They can put all their "profits" on one side of the ledger, but their investments in CDOs and other derivatives will gobble that up in an instant. The immediate derivative problem is a $20 TRILLION problem worldwide. That's Trillion with a "T"!!!! The total outstanding bill for derivatives is somewhere north of $200 Trillion. It's mind-boggling. Compare that to the U.S. GDP!

eazyb81
09-16-2008, 05:02 PM
Dude, don't patronize me. I know these markets better than you, I guarantee it. They bought Mortgage Backed Securities based on their models AND with our fractional banking rules they were able to leverage in a big way. When the housing market started to crumble they ABSOLUTELY showed ALL balance sheets with mark-to-model which multiplied the problem by 100. Saying that the problem is due to the housing crisis is narrow-minded. The problem is due to the DERIVATIVES on the housing market.

Stack it up, wrap it up, tie it in a bow!

And don't patronize me. That's nice that you have some stockbrokers to talk to, but I worked in the industry this summer and study finance and accounting at a premier business school. No, that doesn't make me an expert, but you're certainly not an expert either, so cut out the condescending BS.

I NEVER said the crisis is due to FAS 157; what I did say is that I hate that rule as it makes currently illiquid assets worthless. That is BS, and men much smarter than you or I have agreed with me. The core problem of this crisis is large, heavily-leveraged bets on MBS that fell apart due to housing downturns. Derivatives themselves are not to blame like you constantly seem to imply. However, poor highly-leveraged derivative bets by firms with poor capital cushions are the cause.

Stewie
09-16-2008, 05:09 PM
but I worked in the industry this summer and study finance and accounting at a premier business school.

That's your problem. You're drinking the Kool-Aid. I don't talk to stockbrokers, BTW.

This ENTIRE problem is OTC Derivatives! Do you know what they entail, or what they mean?

eazyb81
09-16-2008, 05:13 PM
That's your problem. You're drinking the Kool-Aid. I don't talk to stockbrokers, BTW.

Yep, that's it. I'm just "drinking the Kool-Aid". Just like everyone else in the industry. We're all just stupid and you're the voice to listen to. Gold.

You've said before that you talk to stockbrokers/advisors/whatever they call themselves to get your financial advice.

This ENTIRE problem is OTC Derivatives! Do you know what they entail, or what they mean?

Just stop.

Stewie
09-16-2008, 05:17 PM
Yep, that's it. I'm just "drinking the Kool-Aid". Just like everyone else in the industry. We're all just stupid and you're the voice to listen to. Gold.

You've said before that you talk to stockbrokers/advisors/whatever they call themselves to get your financial advice.



Just stop.

No REALLY! Tell me what OTC Derivatives are! I want to know! I'm sure you have a Prof that will tell you. And, yep, I've made a killing in gold in the last 6 years.

My adviser was coveted by Presidential administrations for the past 30 years. He refused based on the political BS.

tiptap
09-16-2008, 05:19 PM
over the counter 2nd order equations?

eazyb81
09-16-2008, 05:23 PM
http://seekingalpha.com/article/95613-government-intervention-here-s-a-scorecard

There is a body which has exerted maximum influence in the current situation. This body was not elected by anyone and has no direct accountability to the people of the United States. The accountability is two layers deep. It is empowered by the SEC, the weakest actor during this crisis.
The body in question is a group of accountants who make up the Financial Standards Accounting Board. In one of the worst-timed new policies in history, they instituted a radical change in accounting standards, FAS 157, at a time of maximum fragility to the financial markets and the economy.
Even if one agrees that financial entities should recognize mark-to-market principles (something that we generally endorse, as noted here (http://oldprof.typepad.com/a_dash_of_insight/2008/03/sec-on-marking.html)) this was not the time and place to implement and enforce this policy. It is not embraced by other countries, probably affecting LIBOR. Given the US commitment to merge with international accounting standards, it will probably be abandoned in the next few years.
Briefly put, we will use this standard only for a few years, at the worst possible time in history.

____

Ha, perfect timing. Vince Farrell's comments on Kudlow and Company two seconds ago:

"The real error that was made was instituting the mark to market accounting rule that took viable companies with long-lived assets and said you have to mark them quarter by quarter by quarter, which is INSANE. So you have all these things you're marking down, which in two years will be marked back up, and then you say oh my gosh we didn't need to go through this mess."

Stewie
09-16-2008, 05:23 PM
over the counter 2nd order equations?

Yep. Well, not in a calculus sense, but in a speculation and arbitrage sort of way.

Stewie
09-16-2008, 05:25 PM
http://seekingalpha.com/article/95613-government-intervention-here-s-a-scorecard

There is a body which has exerted maximum influence in the current situation. This body was not elected by anyone and has no direct accountability to the people of the United States. The accountability is two layers deep. It is empowered by the SEC, the weakest actor during this crisis.
The body in question is a group of accountants who make up the Financial Standards Accounting Board. In one of the worst-timed new policies in history, they instituted a radical change in accounting standards, FAS 157, at a time of maximum fragility to the financial markets and the economy.
Even if one agrees that financial entities should recognize mark-to-market principles (something that we generally endorse, as noted here (http://oldprof.typepad.com/a_dash_of_insight/2008/03/sec-on-marking.html)) this was not the time and place to implement and enforce this policy. It is not embraced by other countries, probably affecting LIBOR. Given the US commitment to merge with international accounting standards, it will probably be abandoned in the next few years.
Briefly put, we will use this standard only for a few years, at the worst possible time in history.

____

Ha, perfect timing. Vince Farrell's comments on Kudlow and Company two seconds ago:

"The real error that was made was instituting the mark to market accounting rule that took viable companies with long-lived assets and said you have to mark them quarter by quarter by quarter, which is INSANE. So you have all these things you're marking down, which in two years will be marked back up, and then you say oh my gosh we didn't need to go through this mess."

OH JESUS! These are the assholes who got us into this problem! I'm done here with parochial minds.

eazyb81
09-16-2008, 05:27 PM
OH JESUS! These are the assholes who got us into this problem! I'm done here with parochial minds.

ROFL

The sad thing is that you really believe you know more than these people.

If only everyone knew that there was a sad little man in Kansas that could solve all of our financial problems! stewie FTW!

***SPRAYER
09-16-2008, 05:54 PM
ROFL

The sad thing is that you really believe you know more than these people.

If only everyone knew that there was a sad little man in Kansas that could solve all of our financial problems! stewie FTW!

"Parochial minds".

ROFL

Pass the bon bon's, lovey!

alnorth
09-16-2008, 06:58 PM
Update: the feds are rescuing AIG, but its not going to be a simple loan. The Federal Government is going to seize 80% of AIG, throw out the management, and run AIG presumably until they are in better shape.

***SPRAYER
09-16-2008, 07:01 PM
Update: the feds are rescuing AIG, but its not going to be a simple loan. The Federal Government is going to seize 80% of AIG, throw out the management, and run AIG presumably until they are in better shape.

So we are officially a centralized, communist government? Great.

BucEyedPea
09-16-2008, 07:45 PM
Update: the feds are rescuing AIG, but its not going to be a simple loan. The Federal Government is going to seize 80% of AIG, throw out the management, and run AIG presumably until they are in better shape.

Oh yeah! They're going to do a better job. Than a partially private, partially govt institution did. Chavez would be proud.

alnorth
09-16-2008, 07:53 PM
So we are officially a centralized, communist government? Great.

On the bright side, I guess we'll have a new national holiday to celebrate every year on May 1st

tiptap
09-16-2008, 08:35 PM
Get out the maypole

Velvet_Jones
09-16-2008, 08:36 PM
Hehehehehe. This kills me. A bunch of people panicking about something they know little about. I am not trying to marginalize AIG’s issues but does anyone realize how big and diversified AIG is? AIG has 48 subsidiaries with an S&P rating of A++ or A+. They are stacked with cash. AIG is the largest financial institution in the world – even bigger that Munich/RE.

I work for an AIG business partner. Only two of the AIG subs are having financial issues due to the mortgage crunch. AIG is in the process of realigning resources to match actual losses. This sounds easy but it is not. Actuarially it is a nightmare because each sub must be involved in reallocating reserves to offset this loss without affecting their S&P or AM Best ratings. This is also hindered because of regulatory issues. This is a normal process, but is greater in magnitude than normal.

I would be surprised if this is little more than a hiccup for AIG.

People need to chill while the market readjusts itself.

I am a little disappointed that the Federal Government isn’t allowing these companies to fail rather than patching the problem with bailouts. That is what happened in the late 70s and early 80s with the Savings and Loan industry. The government allowed bad S&L companies go out of business – which is what they deserved and is actually better for the consumer.

Of course – this will end up being Bush’s fault. The fugger. I think if Obama was in office, this would never have happened because Obama knows how to balance a checkbook.

Stewie
09-17-2008, 04:19 PM
ROFL

The sad thing is that you really believe you know more than these people.

If only everyone knew that there was a sad little man in Kansas that could solve all of our financial problems! stewie FTW!

Bring it on, bitch. I've admitted I'm a contrarian investor and for good reason. This shit-stained banking and financial mess is what I'm betting against, ya know???,... against all those financial geniuses you quoted. How about you?

***SPRAYER
09-17-2008, 04:22 PM
As one financial expert recently put it, what we essentially have in this country now is privatized profits and socialized losses.

banyon
02-28-2009, 10:57 AM
Hehehehehe. This kills me. A bunch of people panicking about something they know little about. I am not trying to marginalize AIG’s issues but does anyone realize how big and diversified AIG is? AIG has 48 subsidiaries with an S&P rating of A++ or A+. They are stacked with cash. AIG is the largest financial institution in the world – even bigger that Munich/RE.

I work for an AIG business partner. Only two of the AIG subs are having financial issues due to the mortgage crunch. AIG is in the process of realigning resources to match actual losses. This sounds easy but it is not. Actuarially it is a nightmare because each sub must be involved in reallocating reserves to offset this loss without affecting their S&P or AM Best ratings. This is also hindered because of regulatory issues. This is a normal process, but is greater in magnitude than normal.

I would be surprised if this is little more than a hiccup for AIG.

People need to chill while the market readjusts itself.

I am a little disappointed that the Federal Government isn’t allowing these companies to fail rather than patching the problem with bailouts. That is what happened in the late 70s and early 80s with the Savings and Loan industry. The government allowed bad S&L companies go out of business – which is what they deserved and is actually better for the consumer.

Of course – this will end up being Bush’s fault. The fugger. I think if Obama was in office, this would never have happened because Obama knows how to balance a checkbook.

Surprised yet, Velvet?