Posted on 09/16/2008 6:20:00 PM PDT by markedmannerf
WASHINGTON - The U.S. government has agreed to provide an $85 billion emergency loan to rescue the huge insurer AIG, the The Federal Reserve said Tuesday. The Fed said the U.S. Treasury Department was in full support of the decision.
The Fed determined that a "disorderly failure" of AIG could undermine already fragile financial markets.
The government will receive an 79.9 percent equity stake in AIG, the Fed said
(Excerpt) Read more at news.yahoo.com ...
And the roll towards communism continues apace.
This doesn’t seem to make any sense. There is talk of the government getting warrants on the company’s stock, which may actually appreciate. They seem to actually believe there is a chance to 1) get their (our) money back and 2) make a profit.
Weird.
Good grief. Let them fail, you dolts.
AIG is so interrelated with providing coverage to other insurance companies, I am not completely surprised.
You have got to be kidding. When is the American taxpayer going to revolt and say enough? What’s next? Are there any companies left out there that aren’t “too big to fail”? If the local pizza joint goes belly up do I get to contribute to their rescue as well?
Does this mean that Congresscritters will stop trashing insurance companies now? After all, if it’s government owned, it must be perfection itself.
nuts
Glad I threw their constant junk mail in the garbage.
We are now a socialist country. Complete with a nationalized insurer and central planning of the financial system.
I want interest on my loaned out money. Pay me directly via direct deposit.
Anyone else...?
paulson was very adamant that merrill lynch and lehman bros would not get federal assistance.
i wonder how he spins this.
What happened after the Feds took over Fannie Mae? The Demoncrats tried to make it easier for people to fight foreclosure and in effect, void the contract law governing mortgages - in order to garner more votes.
Next they will try to play with AIGs policies and contracts to make them more "fair".
1. We're owners of AIG’s Gulf V. I'm gonna see if it's available for my 21st wedding anniversary this weekend. My wife will be so excited. I could never have anticipated being a 1/300,000,000 share owner of my own jet.
2. I'm weary of paying my mortgage so I'm calling Sec. Paulson to see if I can get you suckers (I mean taxpayers) to foot the bill.
C’mon, look at the bright side.
And yet the executives who took millions upon millions from these companies will not have to pay back a single dime.
The wife asked what will this do to the mortgage loan requirements. I said, “Nothing.” The reason is that executives know they can rob a company of its riches, do nothing to ensure it success, and the result will be no skin off their nose and millions in their pockets. They will revert back to the bad practices that put them where they are at because it worked this past time.
It worked that way with Chrysler almost 30 years ago. And it is their money. The Fed does not receive appropriations from Congress.
Uh, no.
Welcome to the People’s State of America.
Socialism USA.
Press Release
Federal Reserve Press Release
Release Date: September 16, 2008
For release at 9:00 p.m. EDT
The Federal Reserve Board on Tuesday, with the full support of the Treasury Department, authorized the Federal Reserve Bank of New York to lend up to $85 billion to the American International Group (AIG) under section 13(3) of the Federal Reserve Act. The secured loan has terms and conditions designed to protect the interests of the U.S. government and taxpayers.
The Board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth, and materially weaker economic performance.
The purpose of this liquidity facility is to assist AIG in meeting its obligations as they come due. This loan will facilitate a process under which AIG will sell certain of its businesses in an orderly manner, with the least possible disruption to the overall economy.
The AIG facility has a 24-month term. Interest will accrue on the outstanding balance at a rate of three-month Libor plus 850 basis points. AIG will be permitted to draw up to $85 billion under the facility.
The interests of taxpayers are protected by key terms of the loan. The loan is collateralized by all the assets of AIG, and of its primary non-regulated subsidiaries. These assets include the stock of substantially all of the regulated subsidiaries. The loan is expected to be repaid from the proceeds of the sale of the firm’s assets. The U.S. government will receive a 79.9 percent equity interest in AIG and has the right to veto the payment of dividends to common and preferred shareholders.
I really have nothing to say that doesn’t involve profuse swearing.
It’s not your money.
It’s another example of profit side capitalism and loss side socialism.
On the bright side, now that I’m a part owner by virtue of being a taxpayer, perhaps I can get a tee time at Morefar, which is an 100% AIG owned golf course for their executives and invited clients. Probably the most exclusive course in the country.
Love it. Excellent.
Thanks. I don’t have enough energy to counter all the ignorance on this thread.
Good luck. I can't even get a ticket to the gallery at Augusta National and I say 'hi' to Billy Paine almost every day.
Back in the 1980’s I owned a business that failed. Why didn’t the guvmint bail me out?
Any idea who would control this veto power? I would assume it to be a trustee of the Treasury Department.
I'll try not to add to the ignorance on this thread you pointed out.
Ditto!
OK, which company is next up for a bailout? They were all doing the same thing. What about the next 147 companies that did it? No clue here.
The “socialization of risk” clowns should not be bailed out anytime, anywhere, by anybody.
Oh please. Fundamentally, an executive is no different than any other employee. I could hire a file clerk who could subsequently destroy my company through incompetence or deceit. It's my responsibility as the "supervisor" to ensure that doesn't happen.
CEO's, the MSM portrayal notwithstanding, are not kings of the castle. A CEO is beholden to his/her board of directors (directly) and shareholders (more of a dotted-line type relationship).
Malfeasance should be rewarded with termination; in egregious cases, prosecution. But let's not take the Leftist approach of demonizing all corporate execs because some of them are just plain bad. Let the boards be exposed for their idiocy, and let shareholders go broke. That's the solution.
I've never blamed anyone for accepting a gigantic compensation package; relatively speaking, if you found a hardware store owner paying his cashier $50/hour, who has the questionable judgment?
And so our government takes on a trillion dollar (probably worthless) derivative obligation. Reach deeply taxpayer - you are toast.
“CEO’s, the MSM portrayal notwithstanding, are not kings of the castle. CEO’s, the MSM portrayal notwithstanding, are not kings of the castle. A CEO is beholden to his/her board of directors (directly) and shareholders (more of a dotted-line type relationship).”
That is a loose description. In many cases the CEO is the chairman of that board.
Nice try at saying those execs stealing the company blind while sitting on their thumbs and do nothing are somehow innocent of any wrongdoing and it could all just somehow be the clerk’s fault. Ain’t buying it. If executives of a company are not at fault then I guess nobody is.
But we're the ones getting screwed.
Oh please. Fundamentally, an executive is no different than any other employee. I could hire a file clerk who could subsequently destroy my company through incompetence or deceit. It's my responsibility as the "supervisor" to ensure that doesn't happen.
CEO's, the MSM portrayal notwithstanding, are not kings of the castle. A CEO is beholden to his/her board of directors (directly) and shareholders (more of a dotted-line type relationship).
Malfeasance should be rewarded with termination; in egregious cases, prosecution. But let's not take the Leftist approach of demonizing all corporate execs because some of them are just plain bad. Let the boards be exposed for their idiocy, and let shareholders go broke. That's the solution.
I've never blamed anyone for accepting a gigantic compensation package; relatively speaking, if you found a hardware store owner paying his cashier $50/hour, who has the questionable judgment?
But, to put it another way (regarding excessive compensation): If you are hiring the CEO/Chairman of an organization, and the failure of that person's performance could lead to desperate attempts to avert a global financial meltdown, where would you start the bidding on compensation? Let's face it, these people are important.
Sure, you and I might run GE for a fraction of Jeff Immelt's salary, but we would likely suck at it. Boards approve the packages; it's a value proposition. Sure, plenty of people could do it, but who is going to do it best? Failures of this magnitude are no different than failures at unit levels; poor judgment at the time of hire and/or poor oversight/supervision of performance.
In the real world, people (at all levels) get fired (or resign) all the time, and a subsequent review of conditions under their purview will frequently reveal an atrocious level of incompetence, or just plain failure. To think this doesn't happen at the highest level is silly. The gripe about how much they make is rooted in envy, that is all.
The press release says the US government. The Fed is making the loan and the Fed is an independent agency of the US government. I could be wrong but I would say the Fed has the veto power.
The federal reserve is not the govt. The federal reserve is comprised of nternational bankers. So what do taxpayers have to do with this? Because the dept of Treasury agrees? Who gives this dept that right? What about the people and the congress we hire to represent us? What about our Constitution?
This is obscene!
Actually this is National Socialism.
“And it is their money. The Fed does not receive appropriations from Congress.”
Well of course it’s their own money. They own the press.
This proves that both the Democratic and Republican parties are Socialist.
You are 100% right, my friend.
So now, in addition to being in the mortgage business, looks like we're in the insurance business. How long before we're in the air travel business, auto manufacturing business, etc.?
AIG should have been allowed to go belly up and those insurance carriers who have been responsible could have purchased the assets on the open market .
The US Government is now in the insurance and investment racket. Will they purchase a controlling interest in GM and Chrysler? Will they purchase a controlling interest in Con Ed or Boeing? This is a VERY BAD precedent.
What a country!
You can run a corporation into the ground and the Fed will assume all the risk.
Of course you and I would be tossed in prison if we were to attempt such a crime.
We are a socialist nation even with a Republican in the White House. Where are the Bushbots?
What shade of lipstick will they put on this pig?
That sign should’ve been placed outside the entrance to Denver a few weeks ago....
Didn't they try this in Germany in the 1930's?
What were those people called?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.