Posted on 09/17/2008 4:26:15 AM PDT by rightwingintelligentsia
That probably would happen. Like I said: it would be bad.
I can’t say I’m willing to go there FRiend.
We agree to disagree. :)
BAIL OUT = TAKE OVER by taxpayers
BRIDGE LOAN= PAY BACK, and current 79% government control.
Sarbanes-Oxley is the culprit. The worst thing ever to happen to financials
Yep, our government kicked aside the lessons from the first Great Depression.
You’ll get your bailout the minute you start making the type of, ahem, campaign donations to Kleptocrats that AIG, Freddie, Fannie, etc., do!
Didn’t you know government is just one big protection racket?
I can’t find anything in that post I disagree with!
It's a rather long story that played out over 10 years or so, but AIG essentially proved that they are not, in fact, an insurance firm, but rather a law firm that masquerades as an insurance company. Short version, I ran a glider tow operation from my private strip here in Tennessee. Over that time I, along with most other glider enthusiasts, used AIG as a primary underwriter. In my case, my tow planes, airport grounds, club gliders, and personal aircraft were all insured with AIG. Through a disgruntled club member, AIG got a copy of the general liability waiver I used. I was copied by my insurance agent privately regarding a memo he received from AIG where they commented on my liability waiver. What they said in this memo was stunning. On the one hand, AIG liked the fact that I was using a waiver because by protecting myself, I also protected my insurer. On the other hand, AIG said that they believed my waiver was "too broad" because it prevented them from recouping any damages from me that they might incur from a hull claim they might have to pay for an accident that occurred on my property, even though AIG was not specifically named in the waiver. In plain English they said they wanted to reserve the right to sue me as airport owner for any and all damages that they might have to pay to another insured, regardless of whether or not I was involved or at fault. This is not insurance. The agent knew it, and that's why he copied me with the memo from AIG (at great risk to him and his business) because he knew at that point he was dealing with fraud.
From what I’ve gathered on other freeper threads about this bailout is that the potential for a shutdown of the entire industry - this morning - was great.
Pure speculation. I have no doubt that it would indeed send shock waves through the insurance industry, but shut it down? No way.
And because AIG is international - the domino effect would have rippled throughout international markets.
One of the biggest problems with the cost of doing business is the cost of insurance. It, along with frivolous law suits, are two of the biggest reasons why everything from health care to airline tickets costs so much. In lieu of meaningful tort reform, a little shake up in the insurance biz would be a good thing.
I understand what you are saying - but I also kind of enjoy having a bank to go to. My husband likes to go to work and have his paycheck be worth more than the paper it’s written on.
And you will have neither if the Federal gubming continues to spend money it doesn't have (to the tune of around $60 trillion at last count)
I keep thinking of the analogy of the team of mountain climbers all tied together. When one guy falls - the other guys dig in and hold him up. But everytime another one falls - it makes it that much harder for the rest. Pretty soon you are left with one guy expected to hold up the entire team, and that’s a tall order.
Precisely why the antitrust laws should be enforced so that these companies are not so closely tied together. AIG was allowed to become a near monopoly and therein lies the problem.
The big question here that nobody is asking is how much longer before the United States gubmint goes into default because they've promised everything to everybody? What our government is doing now, between the ever-increasing entitlement spending and now all these bail outs, is a recipe for a disaster that few could begin to contemplate. Seems like I read about the consequences of such actions in a very long book entitled The Rise and Fall of the Roman Empire....
Well, the taxpayers will assume the debt, but we won't have control over how that debt is managed. It'll be kept on a separate book. Let's see, what is that now, 4 accounting books that the Federal gubmint uses now? Will it be 5 books when they bail out big auto and the UAW?
BRIDGE LOAN= PAY BACK, and current 79% government control.
Oh, goody! Congress created the mess and now Congress is going to stick the bill with the taxpayers and continue to make themselves rich while they dream up the cure for the mess THEY created. Meanwhile, Social (in)Security and Medicare continue their slide into bankruptcy and we intentionally limit our own energy supplies.
This would all be funny if it weren't true and the consequences weren't so tragic in the coming years.....
Closed banks. Did you gain when they were making profits ? No ? Then why should we all eat their losses ?
Ever hear of moral hazard ?
No company should be too big to fail. Period.
Would it hurt ? Yes, quite a lot but you and the shallow media are glossing over one thing - they can’t fix AIG’s CDS problem. The 85 bil. is just more money down the dumper - and it’s tax dollars.
” In plain English they said they wanted to reserve the right to sue me as airport owner for any and all damages that they might have to pay to another insured, regardless of whether or not I was involved or at fault. This is not insurance. The agent knew it, and that’s why he copied me with the memo from AIG (at great risk to him and his business) because he knew at that point he was dealing with fraud.”
complicated - but interesting.
“Pure speculation. I have no doubt that it would indeed send shock waves through the insurance industry, but shut it down? No way.”
no way?
see post #39.
View some of the other threads.
Maybe you’ll still say “no way” - but then again, maybe you won’t.
“a little shake up in the insurance biz would be a good thing.”
A “little” shakeup?
I think this would have gone way beyond a “little” shakeup.
“And you will have neither if the Federal gubming continues to spend money it doesn’t have (to the tune of around $60 trillion at last count)”
Well, either way we’re screwed because the damage was already done when all these people took out loans they couldn’t pay.
I guess the next big question is going to be whether or not AIG can now make good on this loan.
“Precisely why the antitrust laws should be enforced so that these companies are not so closely tied together. AIG was allowed to become a near monopoly and therein lies the problem.”
Right
“The big question here that nobody is asking is how much longer before the United States gubmint goes into default because they’ve promised everything to everybody? What our government is doing now, between the ever-increasing entitlement spending and now all these bail outs, is a recipe for a disaster that few could begin to contemplate.”
Right.
The only way I see out of this is an economic boom - grow our way out of it, and reduce government spending (snicker snicker snort!)
Then maybe those people who are rooked will get ticked off enough to get rid of any congressperson who accepts ‘gifts/bribes’, and rake over the coals any government official who becomes a millionaire by nefarious means during his term of service.
Get the greedy out of government. Vote for those who have our country’s best interest.
“These current financial crashes — banks, financial companies, insurance, etc. — certainly can’t be blamed on Clinton. He has been out of office nearly 8 years. Although, many on FR will still try to blame him.”
Clinton changed the law so that the banks could engage in precisely the very behavior that wound up bringing them down.
It was also under his administration that lenders were threatened with fines if they didn’t come up with ways to lend to the poor and to minorities.
It is a very troubling argument - the threat of bank crashes seems to be something which we absolutely must avoid. But this is an insurance company, not a bank.
In the end, too much of this, and there will be a collapsed economy anyway. Because the US could end up with very high inflation. The currency can’t stand endless deficits and printing of more money. In the 30s, things were much more balanced, and the govt took far less of the money in circulation.
“Would it hurt ? Yes, quite a lot but you and the shallow media are glossing over one thing - they can’t fix AIG’s CDS problem. The 85 bil. is just more money down the dumper - and it’s tax dollars.”
no need to get snotty, and it’s only been after reading opinions from knowledgeable freepers that I’m trying to understand all this (see post #39).
This is a unique agreement, and now the next step is to see whether or not AIG makes good on this loan.
The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub. L. No. 106-102, 113 Stat. 1338 (November 12, 1999), is an Act of the United States Congress which repealed the Glass-Steagall Act...The interesting element, that many fail to mention, is this:
I agree, but then i think of my mother and mother in law, who both now live on a fixed income, losing what they have with no hope of finding employment or replenishing what they spend a lifetime accumulating....perhaps instead of the govt. paying aig, why not let aig sink to the bottom where it belongs, and give the cash to the people who lost it
“It is a very troubling argument - the threat of bank crashes seems to be something which we absolutely must avoid. But this is an insurance company, not a bank.
In the end, too much of this, and there will be a collapsed economy anyway. Because the US could end up with very high inflation. The currency can’t stand endless deficits and printing of more money. In the 30s, things were much more balanced, and the govt took far less of the money in circulation.”
Well...laws were changed. Banks got into the business of insurance - and insurance got into the business of banking.
But I agree - this is no win.
Face collapse today - or face collapse later.
The hope we have is to grow our way out of it and hopefully not repeat the same mistake while we do it.
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