The Federal Reserve has announced they will “loan” AIG $85 Billion in exchange for an 80% stake in the company. Read story.
I suppose we should congratulate the Democrats. Their dreams of government control of the economy are coming to fruition, thanks to their diligent efforts at destroying America’s financial institutions.
Just keeps getting “better and better” doesn’t it? Can you imagine what will happen if ‘The Ebony Messiah’ gets his feet in the Oval Office?….The stock sell-off will be something to see, because investors will be running hard to get away from the coming tax increase.
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For the last two months or so I have been watching CNBC. While a complete novice financial commentator, my observation is that someone is manipulating oil downward. That would play into the hands of the non-drilling, “let’s live on air”, liberal nuts influencing the democrats.
Soros is a currency trader, which means he can help push the dollar up, thus pushing crude oil down. It might also be possible he is hedging oil to keep the momentum downward.
While one would think the collapse of the fantasy league called Wall Street would be good for the democrats it does not appear so. The polling trends indicate a lack of trust in obama. Whew! Finally people are beginning to smell the snake oil.
The collapse of Bear Sterns, Lehman Bros. and AIG comes following a period of investment strategies which I would classify as “Russian roulette.” The removal of leverage limits, which regulators allowed meant that companies could risk up as much as 50 times actual asset backing. While one could do it, is that not insanity?
We can thank the democrats and other bleeding hearts who pushed and pushed to allow unqualified people to buy houses with no qualifications. Again, this smacks of insanity. What logical person would lend money to someone who does not have the ability to repay?
Once the ponzi scheme came to light, the house of cards came crashing down. First, Bear Stearns most leveraged with weakest balance sheet, then Freddie & Fannie, followed closely by Lehman and AIG. All due to relaxed regulations, to allow long term congressional leaders to keep their positions of power. Think otherwise? Who pressured lenders to find ways to lend money to the unqualified?
While this may seem a good thing that the Federal government has bailed out Freddie and Fannie which allows the companies which participated in the fraud of lending to the unqualified to remain solvent, there are other shoes to drop. Bear Stearns was just the beginning. Morgan Stanley, Washington Mutual, UBS remain under attack by hedge funds.
The question continues to be asked, “what next?” Today the statement by experts, “AIG Bailout” won’t solve the problem. What will?
In my opinion, we must go through a housecleaning. When an organism is infected, the infection must be killed or allowed to run its course. In our world, the world of every day humans we are like ants dodging elephant paws. If we are lucky enough to survive one, the next one may get us.
In a world run by logical, result oriented leaders, we could expect to see some long term guidance to safety. Today, the leaders are either in favor of the looters or playing politics with our future. Guess it’s time to get some religion, because not much else seems to be on the horizon.
One final thought– would Mitt Romney have been able to lead us out of this? Mute point, because the socialists would have crucified him as part of the Wall Street problem.
Am I losing it?
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SA-I’m just about beside myself over this mess. I believe Romney has a better understanding of how the economy works and how to clean up the mess, but as you said a moot point (unless McCain wins and appoints Romney as chair of the Federal Reserve or Secty of the Treasury.) And you’re right, I’ve said before, all a band-aid does is allow the wound to fester beneath. We need a complete house cleaning.
The last insurance company I worked for was obsessive about Sarbanes-Oxley. It was enough to drive one mad. Every claims reserve needed a detailed explanation, to make sure we were able to cover our losses. Why did AIG not follow the same rules? It’s crazy.
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