Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Location: where you sip the tea of the breasts of the spinsters of Utica
8,297 posts, read 14,163,488 times
Reputation: 8105
Advertisements
AIG near new bailout deal: Report
Speculation grows that government may change terms of federal loan that saved insurance giant from collapse.
By Tami Luhby, CNNMoney.com senior writer
Last Updated: November 9, 2008: 9:18 PM ET
NEW YORK (CNNMoney.com) -- Embattled insurance giant American International Group, set to reveal its latest financial results on Monday, is reportedly close to securing a new bailout deal from the federal government.
The Wall Street Journal, citing sources familiar with the matter, reported Sunday evening that AIG's board was close to approving significant changes to the terms of the $123 billion in loans extended so far, and might announce a revised $150 billion deal as early as Monday.
Details were still in flux, but under the plan being discussed Sunday night, thegovernment would cut the interest rate AIG is paying and use its authority under last month's $700 billion bailout law to buy $40 billion in preferred shares, the Journal said.
The government would also stand behind billions of dollars in credit default swap agreements - essentially insurance contracts that AIG had sold to customers worldwide, according to the Journal. Finally, it would backstop AIG's business of securities lending.
The new deal would mark a stunning turn in what has become one of the most controversial Bush administration moves to stem the escalating financial crisis. The company has come under fire from lawmakers and state officials for seeking to make big payouts to former executives and planning pricey corporate events after receiving the federal loans....... (more at AIG set to report financial results amid more bailout talk - Nov. 9, 2008 )
I don't and that's what I am scared of. Politicians who have little or no knowledge of economics will pull any lever to fix a problem.
The current set of solution came from economists not politicians. The fact the that original bailout plan has been significantly changed shows input from economists (not city-data posters) is being taken seriously.
Its funny that some seem to prefer a depression to bailouts.
some people prefer economic common sense, which is don't charge more than you can afford. it does not take an economist or a politician to figure that out. obama is setting us up for a hard economic fall, but maybe that is the "change" that he promised.
some people prefer economic common sense, which is don't charge more than you can afford. it does not take an economist or a politician to figure that out. obama is setting us up for a hard economic fall, but maybe that is the "change" that he promised.
Obama hasn't done anything yet, so its a bit hard to make any claims what he is setting up as for wouldn't you say?
So far Obama has surrounded himself with some pretty good economists.
"Economic common sense" is rarely correct....economics is often counter-intuitive.
The current set of solution came from economists not politicians. The fact the that original bailout plan has been significantly changed shows input from economists (not city-data posters) is being taken seriously.
Its funny that some seem to prefer a depression to bailouts.
Humanoid,
I enjoy your posts and find you very knowledgeable. I don't think anyone prefers depression but there is a certain chaotic approach to the bail-outs that leads people to question their effectiveness. Bailing out bad businesses only delays a problem, doesn't solve or fix the problem. AIG is a basket case and was made so by poor ineffective risk management and ratings agencies that allowed their securitization to be sold as triple A. It's easy to be cynical about throwing more money at this monster.
..... but there is a certain chaotic approach to the bail-outs that leads people to question their effectiveness. Bailing out bad businesses only delays a problem, doesn't solve or fix the problem.
The bailouts seem chaotic because we aren't seeing (and most aren't even paying attention) to what going on behind the scenes. There is really no time to sit around over beers and discuss matters, they have to act fast. The initial bailout plan has changed a lot and that seems chaotic but really they are just responding to what economists are saying in response to their solutions. Ultimately its a sign that they are listing to economists outside of those officially at the government/fed.
The the bailout 2.0 for AIG is pretty different than the initial one, which was obviously a failure. This time they are taking partial ownership which is something that Paulson and friends seem not to like. This bailout is much more inline with the majority of what economists suggest will work than the previous one.
Anyhow, they aren't trying to bailout bad businesses they are trying to fight deflation and prevent the entire system from collapsing.
Quote:
Originally Posted by jimmyP
It's easy to be cynical about throwing more money at this monster.
Sure, but letting it fail will likely cost us much more. There is too much systemic risk involved in letting AIG fail. There is no real way to predict what would happen if you let AIG fail.
The current set of solution came from economists not politicians. The fact the that original bailout plan has been significantly changed shows input from economists (not city-data posters) is being taken seriously.
Its funny that some seem to prefer a depression to bailouts.
I'm not in debt and have a great deal of savings. I don't see why I should have to suffer devaluation of my dollar to save the dead beats and spend thrifts.
I see these people on the same level as some here see welfare queens and poverty pimps.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
