The content and tone of these comments seems the equivalent of shouting FIRE in a crowded movie theater. Do these “leaders” want to crash the world financial system? That they should be so irresponsible to make comments is even more upsetting than the situation.
Well Paulson has done a good job of convincing every congressman and media elite that it would be disastrous to AIG’s counterparties if it failed (or if he hadn’t bailed Bear, Lehman, the Chinese who owned FM and FM, etc.) One wonders why all of AIG’s counterparties, who would know better, didn’t share his fears.
Remember that 7 banks banded together almost simultaneously to pledge $10b each to a ‘bailout fund’ for themselves. They excluded AIG. They could have easily raised the $85 billion if it meant saving their franchises. They didnt. They also didn’t bail Bear. They didn’t offer JP a loan to cover Lehman’s trades. They didn’t bail the Chinese out of FM and FM. Believe me, if they could have used Other Peoples Money to bail out those companies, they would have. Which is why Paulson did. He may rob me of my money but not of my common sense.
This bailout was a no win situation. AIG affects more people than Lehman Brothers would have. AIG insures the majority of the commercial airline industry. If you let them go under than the airline industry is grounded. Do you think that would affect the US economy? This was more of a loan than it was a bailout. AIG will have to payback the loan plus interest. If AIG sells off parts of the company to repay the loan they have to pay the govt extra penalties and fees. While I am not in favor of the government doing large scale buyouts, I don’t think they had much choice with AIG.
The content and tone of these comments seems the equivalent of shouting FIRE in a crowded movie theater. Do these “leaders” want to crash the world financial system? That they should be so irresponsible to make comments is even more upsetting than the situation.
Well Paulson has done a good job of convincing every congressman and media elite that it would be disastrous to AIG’s counterparties if it failed (or if he hadn’t bailed Bear, Lehman, the Chinese who owned FM and FM, etc.) One wonders why all of AIG’s counterparties, who would know better, didn’t share his fears.
Remember that 7 banks banded together almost simultaneously to pledge $10b each to a ‘bailout fund’ for themselves. They excluded AIG. They could have easily raised the $85 billion if it meant saving their franchises. They didnt. They also didn’t bail Bear. They didn’t offer JP a loan to cover Lehman’s trades. They didn’t bail the Chinese out of FM and FM. Believe me, if they could have used Other Peoples Money to bail out those companies, they would have. Which is why Paulson did. He may rob me of my money but not of my common sense.
This bailout was a no win situation. AIG affects more people than Lehman Brothers would have. AIG insures the majority of the commercial airline industry. If you let them go under than the airline industry is grounded. Do you think that would affect the US economy? This was more of a loan than it was a bailout. AIG will have to payback the loan plus interest. If AIG sells off parts of the company to repay the loan they have to pay the govt extra penalties and fees. While I am not in favor of the government doing large scale buyouts, I don’t think they had much choice with AIG.