Posted On: November 25, 2008, 2:17 pm CST

Posted By: Now you know!

AIG - collapse- do any of you understand that the insurance companies within AIG had nothing to do with the financial problem that holding company is currently in? The credit crunch, because they went to the banks and offered to quarantee (which is not insurance) the loans they had, based upon the government's guarantees of the loans through Freddie and Fannie became a problem when people stopped paying their mortgages? Of course, Carter and later Clinton, made banks loan money to people who could not afford them to begin with. When the adjustible rate loans went up? When the housing values went down, but people purchased their home with little or no money down, they did not have the equite in the house to absorb the loss. In the past, the banks would look to foreclose and eventually sell the house taking a loss and working with the homeowner for the balance. SOX required banks to show the immediate impact of the potential loss or market value of the houses going down, which helped create a crisis in the financial market....now you know the rest of the story!