Wednesday, September 17, 2008

AIG´s $1 Trillion Bankruptcy Would Be World´s Largest Ever

The Fed Comes to the Rescue Again!!
AIG's troubles, similar to its Wall Street peers, stem from guarantees it wrote on mortgage-linked derivatives that have left it with a total of $18 billion in losses over the past three quarters as well as its stock price having fallen more than 91% so far this year.
As of yesterday, the Fed has agreed to loan AIG some $85 billion for a 79.9% stake in the company. Whew! Now that’s what I call a rescue! Get those printing presses running! They say that the loan will be repaid with the sale of AIG assets and not with taxpayers dollars. I don’t agree with this. I tend to think that the taxpayers will just continue to pay for the greed and mismanagement of assets that these companies have been running on for years.
Any thoughts on this?

1 comment:

  1. A couple of thoughts...

    First off, where did the Fed get the $85B in the first place?.. did the US economy suddenly create that much value in the world? Did gold reserves suddenly increase?

    Second, since when did the Fed learn to run an insurance company? With an 80% stake in a company, you'd better know what you are doing, don't you think?

    Crazy that "Joe Public" hasn't a freakin' clue about the implications this brings to the world economy.

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