Flipping through the channels just now and Suzie Orman was on Larry King saying how, had the Fed done this on Friday, the cost would have been $55 billion less (*before AIG’s rating was downgraded).

P A T H E T I C

So Sen. McCain is proposing a national commission to study this (and other issues) in the same vein as the 9-11 commission. Is there really any reason to wait for 2009 for this???

All the Fed has to do is turn on the printing press, and poof –all problems disappear!

Worked so well in Zimbabwe.

How much longer we intend to put off the pain.

Yeah, I saw this coming. There was nothing we could have done. I guess I’m would have like to seen AIG die a horrible death only Jigsaw would have been proud of, no one else wanted to see them go down.

This is all the more reason to elect people who will never do this again.

What would the cost of doing nothing have been to customers and counter parties of AIG’s that traded or dealt with AIG in a fair and ethical matter.

Should they be punished for the mistakes of AIG?

It seems the Fed has forgotten the prime rule of business. Buy low, sell high. Does Mr. Bernanke think for a minute anyone is going to want to buy any of the 80% stake we all now have in AIG?

If he does, bring back Paul Volcker.

Centrist

http://www.youtube.com/watch?v=a-1-m7nYm7s

http://www.youtube.com/watch?v=a-1-m7nYm7s

with Erick. Over the weekend, I thought the Fed and Treasury finally “got it” in letting Lehman Bros. collapse not offering a bailout. The AIG bailout now makes the federal government a direct participant in the insurance business, when they are already in the housing business with the Fannie and Freddie bailouts.

Until they quit interfering with financial markets, the true economic recovery cannot begin. Sad indeed.

The invisible hand was not meant to be Bush’s hand. This is only going to perpetuate the problem, not solve it.

1.) Start a business.
2.) Get enough customers to be considered a staple.
3.) Go vacation while Big Brother watches over your affairs for you.

Now all I need is a product. Can one charge a fee for sarcasm?

…..although I’m guessing would be adult rated.

I fear the economy is being propped up until after the elections. I fear that no matter who wins, we are going to have a collapse. McCain saying the fundamentals of the economy are strong yesterday doesn’t help my paranoia either.

I’m starting to think Obama should win since it will tank anyway — and hopefully a new Reagan will emerge for 2012. If McCain wins and this gets worse, Dems will decimate us in 2010 mid-terms and probably take over everything in 2012 with a filibuster proof majority.

I’ve always believed that the free market can correct any problem — but there’s very little free-market at work here. It’s not being given a chance.

I’m going to bed. Someone please tell me I’m full of it and cheer me up! Maybe tomorrow will be better.

1.) Start a business.
2.) Get enough customers to be considered a staple.
3.) Go vacation while Big Brother watches over your affairs for you.

Now all I need is a product. Can one charge a fee for sarcasm?

http://www.moneymorning.com/2008/08/19/jim-rogers/

Tuesday, August 19th, 2008

Exclusive Interview: Jim Rogers Predicts Bigger Financial Shocks Loom, Fueling a Malaise That May Last for Years

This is bad for the GOP. The timing really couldn’t be worse. It’s a known fact that wall street is infested with dems….I’m not saying that is being orchestrated….I’m just saying….

The markets are spooked. Only the Fed is large enough to restore calm. Many of the assets whose values have plummeted are performing assets and there is no reason for them to be taking this big hit except fear. Once calm is restored, the Fed can get back out of the market.

http://www.moneymorning.com/2008/08/19/jim-rogers/

Tuesday, August 19th, 2008

Exclusive Interview: Jim Rogers Predicts Bigger Financial Shocks Loom, Fueling a Malaise That May Last for Years

This is bad for the GOP. The timing really couldn’t be worse. It’s a known fact that wall street is infested with dems….I’m not saying that this is being orchestrated for political reasons….I’m just saying….

I don’t like it any more than you do, but what would be the consequences for the economy and financial system if AIG was allowed to go under? AIG is a massive financial services company with their tentacles deeply extended throughout the economy. As much as I despise a bailout, I believe that it probably had to be done.

Second, is this really a bailout? I think the shareholders are getting hosed on this deal. I’m hearing that it is a loan to help AIG meet its debt obligations, not an infusion of cash with no strings attached. AIG has to pay the loan back I believe – the government doesn’t want to be in the insurance business.

I hope the irony is not lost on anyone. The largest insurance brokers in the world didn’t plan for a rainy day.

Companies that are too big to fail:

Walmart
Halliburton
US Airlines
Dell
Microsoft

This is really getting outrageous

is risk. The government has just proved that a company can do whatever they darned well please with no concern for the consequences. All this talk of overhauling regulation of the financial services industry could be avoided if the gov’t would just allow these companies to die the death they deserve, and in the future the boards, CEOs, AND customers, etc. would understand that no one is gonna save their bacon if they screw up.

Or dividends? Or maybe a break on an annuity?

I am so damn sick and tired of every bad decision, from dropping out of high school to Ivy Leaguers running 160 year old financial institutions into the ground being subsidized by the government.

Why not the auot makers? Why not airlines? Why not the corner grocery? It is getting less and less attractive to be a normal, stable, play-by-the-rules individual or company. Bet big and win – keep the money. Bet big and lose – get bailed out. What are they going to do when people like us say “to hell with it”? I am so close right now I may do it just so I can right a frigging blog on it two years from now.

Disgusting is the mildest word I can think of right now. And I do not give a rat’s ass if the markets are spooked so much that the Fed NEEDS to intervene. I say pry the windows on Wall Street open, let whoever needs to jump have at it, and start over. I’m serious.

But you could see one coming a mile away. The Fed wasn’t going to let AIG fail precisely because it is NOT like Microsoft or Dell or any of the airlines or (heh) Halliburton. If Microsoft goes belly up, the value of people’s homes isn’t going to plummet. If an airline goes bankrupt, some other airline will buy its planes and hire its pilots and cabin crews, and the airports will still be there. And so on and so on.

But AIG, through its financial services divisions insinuated and ramified itself throughout the foundations of the economy. Letting it fail would have been like letting someone set off explosive charges on the bolts holding together the trusses of a bridge.

The big question for everyone to be asking while they stand here on this bridge is: “How did AIG get to become so important for holding this bridge up?”

The real problem is that the exotic financial instruments that were traded virtually without regulation through the free market have become so central to the functioning of the world’s economy and yet they are so arcane and incomprehensible that we dare not let them come unraveled. The taxpayer is now being forced to hold up the bridge while everyone gets under there and figures out what kind of exotic bolts are keeping the trusses together, and how they got there, and who should inspect them.

But make no mistake about it: I’m with the realists here — letting AIG fail today would have been something close to the end of the world.

I don’t know what kind of penalty should be given to the people who created this situation, because in a way, all of us did. Certainly anyone who owns insurance through AIG did. The Fed broke the rules today because the rules have been bent and warped for so long now that it almost doesn’t matter any more.

Unlike the paper of Lehman and the others.

Their 1 trillion in assets just aren’t liquid.

An 85 billion dollar loan at 11% is hardly a bailout.

So let me get this straight. We paid $80 billion dollars for 80% of a company that stocks show is worth $10 billion on paper? A company that none of the financial giants would touch with a 10 foot pole.

I have not been this mad about something our government has done in a long time. I’m actually surprised we don’t have people lining up in the streets over this. Our federal government is using OUR tax dollars to prop up failing companies.

As someone mentioned earlier, this gives a huge advantage to AIG over their competitors. It also essentially nationalizes the insurance industry. That makes a nice pair with our nationalized mortgage industry. With the car companies lining up next asking for $50 billion, along with airlines and energy, we are starting to have a tough time separating ourselves from those foreign economies that we’ve decried for decades.

I know it won’t matter, but I’m calling my representatives tomorrow to voice my displeasure for MY tax dollars being used to bail out companies who made bad mistakes. As a small business owner, I don’t get that same luxury.

The feds, having done the big banks so many favors, tried to get them to step up to the plate. They failed. Somehow I think the old adage “revenge is a dish that people of taste prefer to have cold” will apply to this day eventually.

… where there are fewer nationalized industries. So now within the span of a few weeks the Fed (using our tax money/credit) put of hundreds of billions to nationalized the mortgage industry, most of the insurance industry, and bailed out huge banks (even Lehman’s by providing the subsidy of easy credit).

Where’s the outrage in Congress? Does the executive branch even have the authority to nationalize industries like this with no public debate? Can they just add $80 billion in debt overnight without discussing it with ‘the people’?

Heck, this crisis is making Ron Paul look like some sort of savant. What are they going to do next – confiscate gold bullion?

I’d rather have the health care industry nationalized than all of these financial bailouts. These will only prolong and intensify the magnitude of the ‘ultimate margin call’ and create a cataclysmic end to our economy.

Someday soon the Fed will seek a bailout for their idiotic schemes from you and me because they are ‘too big to fail’. The downturn and correction of the market cannot be avoided forever by the Federal Reserve. Any more than they can make water flow uphill.

….is that one of the oldest money market funds put a 7 day hold on redemptions and broke the buck today. That could make a lot of people nervous about where they have their money parked and cause some uncomfortable days ahead if people rush for the exits for less risk.

First the mortgage industry now AIG. This is really really bad.

This is one that I can live with.

In some ways, AIG has no competitors but performs a unique service in the marketplace as the “insurer of insurers” or the insurer of last resorts. If it failed abruptly, it could cause a chain reaction. What the Fed did was provide a (high-interest) line of credit that will (or at least, should) be used to restructure their business.

This is one that I can live with.

In some ways, AIG has no competitors but performs a unique service in the marketplace as the “insurer of insurers” or the insurer of last resorts. If it failed abruptly, it could cause a chain reaction. What the Fed did was provide a (high-interest) line of credit that will (or at least, should) be used to restructure their business. It’s almost like what the Fed already does for Banks, provide short terms of credit.

Suddenly everyone is a fiscal conservative? Does this mean we are ready to talk about the budget deficit?

I don’t believe AIG is particularly one of the bad guys in the credit crisis. They are taking collateral damage, and many experts believe they will be fine with a fairly short-term bridge in their financing. The government had to make a pragmatic decision — nobody is reading from the Herbert Hoover strategy book of non-intervention.

Lehmann brothers is another story. They got what they deserved, and I’m with McCain on going after the CEO’s and executives who bailed out with golden parachutes. You’d think after the Savings & Loan fiasco in the 1980s, people would learn. Margin trading in stock market has been carefully regulated since it caused the 1929 market meltdown. And now we had people buying mortgage instruments on 90 percent margin!

Borrowing money to buy loans…from people who should never have been given the loans in the first place. What could possibly go wrong?

this was a good or bad move. I think the reason it was done was to avoid market panic in the money-market fund sector. If people are worried about their safest investments they will inturn cut their spending which would hasten the slow growth the economy has seen in the last couple of years. Atleast this bailout makes some sense unlike Bear and Fredie/Fanie.

The Fed, although usually an arbiter of malignant and repugnant actions in the financial markets, did the only thing it could do to prevent a collapse of supposedly safe Money Market Funds. This would Directly affect every small business owner in America and would drastically deter future investment into our Financials. It is morally repellent to allow companies to grow to this size, with uninsurable assets spread out over numerous interconnected fields, and then to save them from their own mistakes but if Bernanke and Paulson had let this behemoth fail, the crisis would have been ungodly. This would have mirrored the failure of the Bank of the United States in 1931, in that it would represent an underlying crisis of liquidity in the financial market itself (although the fundamentals of our economy–production, jobs, income, ineterst rates, etc.– are infinitely stronger). Read Milton Friedman’s The Great Contraction for an understanding of what the Fed should and shouldn’t do in a time of a prolonged liquidity contraction; AIG will no longer be nearly as powerful or as expansive in two years, and it may not survive the next decade, but the government will recoup its loan, and AIG’s crash will be slow and predictable; there will not be a run this way. And that’s what the Fed ultimately is trying to do. If only Milton Friedman were still alive; he could ameliorate the concerns of us freemarketeers without sounding like a Fed whore. God I miss that man.

Government is not the answer to all the Wall Street ails.
How many takeovers or bailouts, (it’s all about semantics) that leave the government running things in our so called FREE market before it becomes socialist government?

I called Clintons office and asked when I would be recieving my AIG stocks. The Lady on the other end laughed at me!! This is not a joke, this is our money.

We just invested $85 billion of our money, what do we get?

McCain blew the whistle on all these meltdowns back in 2005 with the housing reform bill. Nobody listened and the dems shot it down.

Funny how all this implosion is taking place now with a Democratic controlled Congress???