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Old 02-24-2009, 03:25 PM
 
Location: San Jose, CA
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Quote:
Originally Posted by wheelsup View Post
They didn't really lose $60 billion, it was writedowns.
When this is all over, we're going to look on this as the "accounting crisis." All of the financial companies are taking massive writedowns for paper losses, money they haven't actually lost unless they are forced to liquidate. If we suspend mark-to-market accounting, the financial markets will recover almost immediately.
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Old 02-24-2009, 04:06 PM
 
Location: Georgia, on the Florida line, right above Tallahassee
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Like a sore over a festering wound.
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Old 02-24-2009, 04:27 PM
 
12,870 posts, read 12,773,798 times
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Quote:
Originally Posted by sonarrat View Post
When this is all over, we're going to look on this as the "accounting crisis." All of the financial companies are taking massive writedowns for paper losses, money they haven't actually lost unless they are forced to liquidate. If we suspend mark-to-market accounting, the financial markets will recover almost immediately.
suspending mark to market hides the losses but does not eliminate the losses!
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Old 02-24-2009, 06:03 PM
 
Location: Olympus Mons, Mars
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Quote:
Originally Posted by floridasandy View Post
suspending mark to market hides the losses but does not eliminate the losses!
+1

these instruments are Mortgage Backed Securities, most of them are all worthless and the market appraisal is most likely an inflated figure. If they were to actually attempt to sell some of these assets my guess is that they would be worth less by a huge factor.
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Old 02-24-2009, 08:15 PM
 
8,936 posts, read 15,854,556 times
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except there is no reason for them to sell them

you have some assets that have a guaranteed return in 3 to 4 years, which although pretty conservative is more than the amount that you can get currently on the open market - there needs to be some common sense here as well

mark to market needs to be revised to be able to account for the complexity of financial transactions and overall portfolio management

what has the potential to hit AIG right now is what his them in september - a rating decrease, which would lead to another cash call to set aside further reserves due to a paper loss that doesn't exist
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Old 02-25-2009, 09:01 AM
 
22,770 posts, read 25,192,517 times
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Quote:
Originally Posted by Finger Laker View Post
except there is no reason for them to sell them

you have some assets that have a guaranteed return in 3 to 4 years, which although pretty conservative is more than the amount that you can get currently on the open market - there needs to be some common sense here as well
How do you figure that these securities offer a guaranteed return?

I'm no expert, but I thought their returns were related to foreclosures, defaults, "cram downs", falling asset prices, and whatever future rule changes that our politicians have built into them.
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Old 03-01-2009, 03:12 AM
 
Location: Georgia, on the Florida line, right above Tallahassee
10,473 posts, read 13,413,505 times
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Quote:
Originally Posted by Finger Laker View Post
except there is no reason for them to sell them

you have some assets that have a guaranteed return in 3 to 4 years, which although pretty conservative is more than the amount that you can get currently on the open market - there needs to be some common sense here as well

mark to market needs to be revised to be able to account for the complexity of financial transactions and overall portfolio management

what has the potential to hit AIG right now is what his them in september - a rating decrease, which would lead to another cash call to set aside further reserves due to a paper loss that doesn't exist
AIG: WE KNOW MONEY.
Seriously, that was their slogan.

AIG's Failure Is So Much Bigger Than Enron

Copyright issues, so no cut and pasting...but read this, and see how AIG is so full of FAIL it's not just funny, it's just sad.
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