Monday, Mar 09, 2009
Overseas Seizures ? Is this really happening?
Bloomberg: AIG Told U.S. Failure Would Cripple World’s Banks, Money Funds
March 9 (Bloomberg) -- American International Group Inc. appealed for its fourth U.S. rescue by telling regulators the company’s collapse could cripple money-market funds, force European banks to raise capital, cause competing life insurers to fail and wipe out the taxpayers’ stake in the firm.
AIG needed immediate help from the Federal Reserve and Treasury to prevent a “catastrophic” collapse that would be worse for markets than the demise last year of Lehman Brothers Holdings Inc., according to a 21-page draft AIG presentation dated Feb. 26, labeled as “strictly confidential” and circulated among federal and state regulators.
“What happens to AIG has the potential to trigger a cascading set of further failures which cannot be stopped except by extraordinary means
3 Comments
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1. troy said...
The U.S. Financial System Is Effectively Insolvent
There is a grave risk of a global L-shaped depression.
By Nouriel Roubini
March 07, 2009 "Forbes" March 05, 2009 -- -- For those who argue that the rate of growth of economic activity is turning positive--that economies are contracting but at a slower rate than in the fourth quarter of 2008--the latest data don't confirm this relative optimism. In 2008's fourth quarter, gross domestic product fell by about 6% in the U.S., 6% in the euro zone, 8% in Germany, 12% in Japan, 16% in Singapore and 20% in South Korea. So things are even more awful in Europe and Asia than in the U.S.
There is, in fact, a rising risk of a global L-shaped depression that would be even worse than the current, painful U-shaped global recession. Here's why:
First, note that most indicators suggest that the second derivative of (cont.)
http://informationclearinghouse.info/article22168.htm
2. Justanotherftb said...
How did the regulators let one insurance company get so big and pivotal to the system that it "couldn't fail"
Symptomatic of this whole mess IMO.
3. crunchy said...
Hungary, Latvia. Who's next for green shoots of contamination?