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Anotherwords, Obama taking over the companies and using taxpayers money is acceptable because you think the companies would not fix themself to protect their own jobs?
Bankruptcy is not a failure, its a reorganization.
Explain to me why you all thought Bushs bailout was bad, and Obamas is good?
Why cant AIG fail? Do you think there arent 1000 other smaller companies out there waiting to pickup their business?
No, the companies would not fix themselves - obviously.
In a bankruptcy creditors have to whistle for their money and so does everyone else who depended on or did business with or was in any way entangled with the bankrupt company.
One problem with "Bush's bailout" - Paulson handing money out with no other caveat other than "we know you'll do the right thing." Another problem - the rampant hog-wild avarice Obama has to clean up occurred under Bush's winking eye. Where was Bush before the last thirty seconds of his regime?
No, 1000 other small companies cant possibly take over for a monster like AIG, dont be silly.
No, the companies would not fix themselves - obviously.
In a bankruptcy creditors have to whistle for their money and so does everyone else who depended on or did business with or was in any way entangled with the bankrupt company.
One problem with "Bush's bailout" - Paulson handing money out with no other caveat other than "we know you'll do the right thing." Another problem - the rampant hog-wild avarice Obama has to clean up occurred under Bush's winking eye. Where was Bush before the last thirty seconds of his regime?
No, 1000 other small companies cant possibly take over for a monster like AIG, dont be silly.
The companies would not fix themself during bankruptcy? I tend to disagree and have evidence that they do. KMart, US AIr, for examples are both rather strong companies who went into bankruptcy and came out.
I agree with you on the Bush bailouts, they were completely mis-managed, but so is Obamas.
1000 other small companies can and do take over businesses after major corporations file bankruptcy. Insurance companies natoriously not only take over businesses of other insurance companies that have filed bankruptcy but usually, policy holders dont even see a change in benefits, the only thing that changes is the company name.
Lehman Brothers, the largest bankruptcy in history has had business taken away from them, AIG, while avoiding bankruptcy has continued to lose market shares, its what happens when companies have their name in the paper daily.
If you are talking about AIG, since it's such a huge company with it's hands all over the place it might be wise to go into what would happen during such a bankruptcy.
For instance, I think it would make sense to bust AIG up in some form, and bankrupt the one total failure CDS portion (or put it under conservatorship). That seems like it would be manageable. Bankrupting the entire corporation seems insane and I do not think there are a thousand companies that could take that mantle in a reasonable amount of time.
If you are talking about AIG, since it's such a huge company with it's hands all over the place it might be wise to go into what would happen during such a bankruptcy.
For instance, I think it would make sense to bust AIG up in some form, and bankrupt the one total failure CDS portion (or put it under conservatorship). That seems like it would be manageable. Bankrupting the entire corporation seems insane and I do not think there are a thousand companies that could take that mantle in a reasonable amount of time.
I agree - AIG is so intermingled with other financial instutions - who hold derivative positions with AIG - that if AIG went under - there would be a cascading of bankruptcies in the financial sector... as one company after another could not unwind their positions and stay solvent.
The result - credit and lending would go into a deep freeze and would most likely bring on a global DEPRESSION...
The companies would not fix themself during bankruptcy? I tend to disagree and have evidence that they do. KMart, US AIr, for examples are both rather strong companies who went into bankruptcy and came out.
I agree with you on the Bush bailouts, they were completely mis-managed, but so is Obamas.
1000 other small companies can and do take over businesses after major corporations file bankruptcy. Insurance companies natoriously not only take over businesses of other insurance companies that have filed bankruptcy but usually, policy holders dont even see a change in benefits, the only thing that changes is the company name.
Lehman Brothers, the largest bankruptcy in history has had business taken away from them, AIG, while avoiding bankruptcy has continued to lose market shares, its what happens when companies have their name in the paper daily.
"If General Motors (GM) goes bankrupt, it will drag under a slew of suppliers with it, companies like Lear (LEA) and TRW (TRW). This would greatly exacerbate the economic weakness and probably cause unemployment to top 12% -- the highest level of headline unemployment since the Great Depression. When those who can only find part time work or become discouraged are thrown in to the mix, unemployment (U-6) could rise from its current 15.3% to well over 20% in such a scenario."
Looks like it is going to be another good day in the market today. And the big bad banks just might lead the way. Is Obama in town? If he is hope he helps the kids in the garden and stays off the tv. Should be a nice day to make money! Now you can all get back to figuring out what you all are trying to figure out.
"If General Motors (GM) goes bankrupt, it will drag under a slew of suppliers with it, companies like Lear (LEA) and TRW (TRW). This would greatly exacerbate the economic weakness and probably cause unemployment to top 12% -- the highest level of headline unemployment since the Great Depression. When those who can only find part time work or become discouraged are thrown in to the mix, unemployment (U-6) could rise from its current 15.3% to well over 20% in such a scenario."
If GM would happen to go under, it is a false argument that bankruptcy means they drag down other suppliers. People will not stop buying cars, they will have to continue to buy them, these suppliers, or some other suppliers will continue to be needed to fill the void. Example, car company goes out of business, tire supplier either contracts with other car companies to pickup the added sales they will have.
Do you think that Sony is going under because one of their distributors Circuit City went under? No, they simply find other channels to sell.
Bankruptcy does not mean liquidation, it means an orderly way in which a company can reschedule and pay their bills.
GM, AIG, had many other avenues to raise capital, they could have issued new bonds to pay off the ones that the government is paying off, they could have sold stocks, cut dividends, etc. To pretend that the only choice was a government bailout, or GM going under is just crazy.
Finally, when are we going to bail out Maddoffs investors? How about Enron investors? After all, using your argument that we need to bail GM out, we will be saving others could also be applied to these other companies. Should we go back and bailout Lehman Brothers? That was only $613Billion... I know there is a difference.. These other companies are viewed as investments for the rich, GM bailout is viewed as saving the Unions, the final outcome though, saving individuals pensions and retirement funds though is the same..
Looks like it is going to be another good day in the market today. And the big bad banks just might lead the way. Is Obama in town? If he is hope he helps the kids in the garden and stays off the tv. Should be a nice day to make money! Now you can all get back to figuring out what you all are trying to figure out.
I dont think it'll be too big for the banks, though the pre-market is a nice relief. So far.
Next week should be better, and after a long weekend - at least in the ramp up to earnings.
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