AIG

awgee_IHB

awgee_IHB

New member
Just another big brother move to disregard private property rights, throw out The Constitution, screw the little guy, and subsidize the banks. Are you starting to understand what the real reason is for the existence of the Federal Reserve? Do you understand that in 1913, during a Congressional holiday, a law was passed that trashed The Constitution and gave a bunch of private bankers the right to control the money in the United States of America. Socialism at it's finest.
 
"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.?
 
How does this affect AIG's subsidiary companies, such as 21st Century? Will the Feds own these assets and then sell them off?
 
Here's another article...I'll tell you guys one thing, the money isn't coming cheap that's for sure (90-day LIBOR + 8.50% = ~11% today).



http://www.bloomberg.com/apps/news?pid=20601087&sid=aAkvusf5Ld7M&refer=home



Watch the market rally huge on this...time to load on some more shorts of dogs like Citi and Wachovia.
 
As much as I think that Citi and Wachovia will go down, I would caution against shorting them. The possibilities of buy outs and mergers is strong. Have you ever been short a company when they announced after hours that they were getting bought out? It is not pleasant.
 
Wow, a loan that comes with 11% interest and takes 80% ownership... sacks management, veto rights on dividends, and plans to liquidate assets.



Isn't this really a "we'll keep you afloat long enough to gut you and make good on your debt" plan?
 
Probably a stupid question... BUT.. Our insurance company, 21st Century, was recently bought by AIG and I'm wondering what happens to our car insurance should the company go under. Our policy expires in January, so its not a lot of money but I'm just wondering.
 
I think it would be the best thing for the industry. A nice clean, quick, but not BK forced, liquidation.



I wonder how many companies are still going to be whining for a bailout when they realize Government bailout means the Government kicks the CEO and clique to the curb and sells everything keeping 80% of whatever is left-over.
 
[quote author="No_Such_Reality" date=1221646739]Isn't this really a "we'll keep you afloat long enough to gut you and make good on your debt" plan?</blockquote>


That's what it looks like and I sure hope it's that. I don't want my tax dollars saving Wall Street high rollers. I'm still not convinced the government should be doing this. Somehow CDS need to be properly regulated and sellars of insurance on CDS need to maintain proper capital, something AIG didn't do.



Oh, and for revsionist historians. What would have happened if Chrysler hadn't been bailed out. BK, managment and unions out, vultures could have picked up the plants for a song, hired new workers at favorable terms, made better, cheaper small cars that could have competed with the Asian imports. GM and Ford would have had to reacess their business plans. But now the big three are asking for $50 billion handout. I say don't do it.
 
[quote author="awgee" date=1221643253]As much as I think that Citi and Wachovia will go down...</blockquote>


About Watchovia, if they go down, what will that do to their investment branch Evergreen Investments? Would investments in Evergreen (mostly bonds) likely be gone too?
 
[quote author="awgee" date=1221643253]As much as I think that Citi and Wachovia will go down, I would caution against shorting them. The possibilities of buy outs and mergers is strong. Have you ever been short a company when they announced after hours that they were getting bought out? It is not pleasant.</blockquote>
Wachovia is SWIMMING in Option ARMs on their books from their great 2006 acquisition of Goldenwest Financial. It's gonna be a slow bleed for Wachovia as it'll take some time for those Option ARMs to bite them in the arse.
 
CNBC is reporting that AIG customers in Singapore are jamming the AIG branches trying to get their money out and cancel policys.
 
AIG was not "bailed out". AIG is being liquidated. The $85 billion will not be enough to prevent systemic meltdown. And even though the Fed is doing this, I doubt the Fed has the authority to lend to a non-depository institution.
 
[quote author="awgee" date=1221679415]AIG was not "bailed out". AIG is being liquidated. The $85 billion will not be enough to prevent systemic meltdown. And even though the Fed is doing this, I doubt the Fed has the authority to lend to a non-depository institution.</blockquote>


Unfortunately part of what happens involves the US taking an 80% ownership stake in AIG. That includes liabilities as well as assets. Their balance sheet for the quarter ended 6/30/08 shows a total of 1.05 trillion in assets and 971.8 billion in liabilities. Of course with a ton of derivatives under water, things have deteriorated since then.



They should have been allowed to fail, auctioned off the assets, and used any proceeds to do the best job possible paying off the liabilities. The insured would have been picked up by other companies, and people who took risk would have paid the price for making wrong decisions.



Instead, this one is on our dime.
 
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