Monday, November 3, 2008

From Renting2 via Gardneniadotnet

Effectiveness of AIG's $143 Billion Rescue Questioned

A number of financial experts now fear that the federal government's $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing. "What we see now are a lot of games by the government to keep these institutions going with a lot of cash," she said. "This is to fill holes in companies' balance sheets, and they're trying to hold at bay the charges that our financial system is insolvent."

Posted by malct @ 06:44 PM (743 views)
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6 thoughts on “From Renting2 via Gardneniadotnet

  • If they had let AIG go down …..

    Here is Big Picture

    • Lehman Brothers was like the little kid pulling the tail of a dog. You know the kid is going to get hurt eventually, and so no one is surprised when the dog turns around and bites the kid. But the kid only hurts himself, so no one really cares that much.

    • Bear Stearns is the little pyro — the kid who was always playing with matches. He could harm not only himself, but burns his own house down, and indeed, he could have burnt down the entire neighborhood. The Fed stepped in not to protect him, but the rest of the block.

    • AIG is the kid who accidentally stumbled into a bio-tech warfare lab . . . finds all these unlabeled vials, and heads out to the playground with a handful of them jammed into his pockets.

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  • the bailout is a completely waste of money.dont need to spend it to know it wont work.to sort out the banking mess, one needs to publish first the total exposure of banks including CDOs and CDs (it is a myth that these figures are not known when in fact they are-but preventing publication is preventing a run on deposits) and then work one by one at cancelling the contracts as each one has its mirrored opposite with someone else of course.
    Mamouth task although £25Bn have already been secretly cancelled already- drop in the ocean though.

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  • mg – excellent

    square root of one percent of the population is all we need

    where is them all?

    apart from me (tic) all posting are moderates – where are the extremists?

    relatively speaking of course.

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  • things are so weird – can I make a suggestion – yes of course you can malc (t) no-0ne is listening (joke) anyway

    when you post an article or comment – save it immediately – before it wents off.

    that’s all folks

    ah disney! now there’s a thing.

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  • Not sure that the significance of this is really appreciated by many. If it is then it proves that apathy rules. We now have a system where banking is worth saving but real lives are only worth the ink on the death certificates!

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  • Malct – here is some extreme stuff from Bloomberg of all places.

    “The Fed’s half-point rate cut to 1 percent last week came two days before the BOJ’s move, and it surprised no one. What shocked many was a decision to provide $30 billion each to the central banks of Brazil, Mexico, Singapore and South Korea…

    It’s one thing to accept euros, yen, pounds or Swiss francs in these kinds of “liquidity swap facilities.” It’s quite another to accept emerging-market currencies. The Fed is bestowing its “Good Housekeeping” seal on economies that are following responsible policies yet are feeling the brunt of the credit crisis. This activity raises a number of questions …

    One, is the Fed playing geopolitics? ..“There is another signal being sent: Being a friend of the U.S. still matters,” Marc Chandler, global head of currency at Brown Brothers Harriman & Co. in New York, wrote in an Oct. 30 report. “Venezuela, Argentina and Russia, for example, are unlikely to be thought of as likely candidates for a similar swap program with the Fed. Over time, who is regarded as a friend of the U.S. may impact valuations.”

    Two, is the Fed helping the IMF or undermining it? It’s more the former than the latter. …

    Third, how does the Fed turn off this new spigot? Only time will tell if Bernanke created an international monster here.”

    Mountain Goat – it sets the stage for a collapse of not just the USD but the whole international finance system.

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