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185 BILLION

Discussion in 'Uncategorized Threads' started by smsnyder, Sep 17, 2008.

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  1. smsnyder

    smsnyder Well-Known Member

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    There goes our tax dollors due to greed. 100 billion to Fanny May and Freddie Mac. 85 billion to bail out AIG. Bush just gave another 1 billion in aid to Georgia. They have a problem taking care of our veterans. What's wrong with that picture?
     
  2. Tron

    Tron Supporting Vendor Supporting Vendor

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    Well Earl, our current administration feels that it can just borrow money without any reprocussions down the road. With the Dem's you have tax and spend, with Repelicans you borrow and spend...take your pic.
     
  3. JB Logan Co. Ohio

    JB Logan Co. Ohio TS Member

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    TO ALL POLITITIONS: ....Tighten up the purse strings and LOWER our taxes!!!

    JB=Jerry Beach 8503917
     
  4. nipper

    nipper TS Member

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    lower taxes, and who is gonna repay 134.5 billion total so far spent in iraq, currently 7.4 million per hour and 122,820 per minute--- your childrens children

    bill
     
  5. Sgt. Mike

    Sgt. Mike TS Member

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    I guess big business is no longer, if ever, responsible for poor business decisions. Make a mistake (big business only)and the government will come to the rescue. How many millions will the CEO's make or steal for these poor decisions?

    Yet, our government won't/refuses to help veterans. Poor services, poor hospitals and really poor outreach for our veterans. It can't be a money issue with all we are spending. Why can't the government help the elderly who's only retirement is Social Security and end up working at a dead end job until they die? Something's wrong with the whole picture, both Democrat and Republican priorities seem a bit weird.

    I still like Palin because she's not from Washington D.C. It seems as if the only people who can be elected President are the ones from D.C. Same old politics, the same old way. When does the U.S. Government reach zero? It doesn't because it has Social Security, and perhaps other retirement funds to steal from. If that isn't enough, borrow from foreign countries. Michael
     
  6. BIGDON

    BIGDON Well-Known Member

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    Just a point, the $85B to AIG is and was a Loan with the company as collateral. If they don't pay back the loan, then Gov't. gets the company which can then be sold off in pieces for far more than $85B. If they didn't make the loan the financial crisis would have been huge, world wide. It wasn't a gift and I don't expect some of you to understand it but it was for your benefit that it was done. You wouldn't have liked would happen to your retirement plans or 401ks if it had not been done. The market came back a 100 points after the deal which is good.

    Don
     
  7. nipper

    nipper TS Member

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    read this as you eat your next bacanator with fries and frosty then

    bill
     
  8. cubancigar2000

    cubancigar2000 Well-Known Member

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    right on BIGDON, totally neccessary move
     
  9. grnberetcj

    grnberetcj Active Member

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    Oh, by all means read the Washington Post.

    If anyone finds any real factual information, please advise.

    Curt
     
  10. pendennis

    pendennis Well-Known Member

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    The failures of Fannie Mae and Freddie Mac are largely a result of what happened in the last term of the Clinton administration. Bob Rubin, who was Secretary of the Treasury, led the effort to ease credit requirments, so that potential home buyers could get the "no doc", low-to-no down payment mortgages, and inflated growth mortgages. The loans were then sold off to Fannie Mae and Freddie Mac, which were eventually left holding the bag, which means that we citizens are left holding the bag.

    By the Feds bailing out AIG, it sends further signals to the private sector financial industry that it's okay to mismanage the portfolios, take our multi-millions in bonuses, and leave the mess for someone else.

    At what point do the Feds not step in? Who will ultimately be responsible for their own failure? No amount of Federal regulation will stop this insanity. It will only exacerbate the problem.

    Dennis
     
  11. Ljutic111

    Ljutic111 TS Member

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    What gets me , by bailing these institutions out , the CEO`s will still be guaranteed their $27M+ per year ??? Am I reading this wrong ??
     
  12. WindyCity

    WindyCity TS Member

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    Don, You are right on target. To add a little additional information, the loan to AIG acts as a line of credit for the company. In no way do they have to utilize the entire amount to offset operations expenses, loans, etc. In addition, the Fed produced this line of credit with a 50 % Loan To Value ratio.

    In addition, we cannot allow AIG to go under. A substantial portion of the Fortune 500 and 1000 companies use AIG to underwrite their bonds and insurance. Should any one of the companies AIG represents be provided with notice that their insurance or bonds were cancelled, we would have a complete blowout of the business market in general. These companies would have to find capital to underwrite their organizations resulting in tremendous job loss and possibly additional bankruptcies.

    Just my .02

    Cory
     
  13. nspktr1

    nspktr1 TS Member

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    Here is the article from AM Best, the insurance news source. This was not a bailout, but a loan and by the Federal Reserve whose charter allows them to do so.

    2. Fed Takes Control of 80% of AIG Under $85B Loan Package. Best’s Insurance News. 09/16/2008. [FULL-TEXT]
    The Federal Reserve Bank of New York will extend an emergency $85 billion loan to American International Group Inc. in an effort to stabilize the global insurance giant, in an unprecedented arrangement that will leave the federal government in control of four-fifths of the company's equity.
    Taken under Section 13(3) of the Federal Reserve Act, which grants the U.S. Federal Reserve Board authority to act in cases of "exigency" that appear to present systemic risk to the broader economy, the agreement culminated several days of meetings with the central bank, which had sought unsuccessfully to broker a deal for AIG (NYSE: AIG) with private lenders.
    "The board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance," the Fed said in a statement.
    The deal creates a 24-month secured revolving credit facility that, according to the Fed, is intended "to assist AIG in meeting its obligations as they come due." The company will be expected to repay the loan by selling "certain of its businesses in an orderly manner, with the least possible disruption to the overall economy."
    The loan, which will accrue interest at 850 basis points above the three-month London Interbank Offered Rate, is collateralized against the assets of AIG's primary non-regulated subsidiaries and the stock of its regulated subsidiaries. Current AIG shareholders will see their equity diluted 79.9% by the issuance of warrants to the federal government, which also retains the right to veto dividend payments.
    In a reversal of administration policy, Treasury Secretary Henry Paulson endorsed the deal, just one day after announcing the Fed would not offer a "bridge loan" to the troubled insurer (BestWire, Sept. 15, 2008).
    "I support the steps taken by the Federal Reserve tonight to assist AIG in continuing to meet its obligations, mitigate broader disruptions and at the same time protect the taxpayers," Paulson said in a statement.
    The Fed did not comment on whether current AIG management would be allowed to remain in place. In a statement credited to AIG's Board of Directors, the company said it believed the deal to be "the best alternative for all of AIG's constituencies, including policyholders, customers, creditors, counterparties, employees and shareholders."
    "We believe the loan, which is backed by profitable, well-capitalized operating subsidiaries with substantial value, will protect all AIG policyholders, address rating agency concerns and give AIG the time necessary to conduct asset sales on an orderly basis," the board said. "We expect that the proceeds of these sales will be sufficient to repay the loan in full and enable AIG's businesses to continue as substantial participants in their respective markets"
    New York Gov. David Paterson had earlier announced the state would permit AIG to use up to $20 billion in assets from its subsidiaries to provide collateral and maintain daily operations (BestWire, Sept. 15, 2008). Regulators from Pennsylvania, New York and Florida — which between them have 24 AIG subsidiaries — also have been discussing how to respond to the insurance giant's liquidity crisis (BestWire, Sept. 16, 2008).
    A.M. Best Co. on Sept. 15 downgraded AIG's Financial Strength Rating to A (Excellent) from A+ (Superior) based on concern over the lack of liquidity at the holding company level and management's need to secure funding options. AIG's ratings and under review status are under review as it executes plans to stabilize its financial condition.
    (By R.J. Lehmann, Washington bureau manager: raymond.lehmann@ambest.com)
     
  14. smsnyder

    smsnyder Well-Known Member

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    3 Trillion for wars they should be paying
    100 Billion bail out Freddie Mac and Fanny
    75 Billion to bail out AIG
    1 Billion to Georgia for relief Russia destroyed.
    Stock market is dropping and so is your retirement.
     
  15. JBrooks

    JBrooks TS Member

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    It should also be noted that Obama received over $350,000 from Lehman Brothers and as John McCain said about the "The Flake":

    "He talks a tough game on the financial crisis, but the facts tell a different story. Senator Obama took more money from Fannie Mae and Freddie Mac than anyone but the chairman of the committee they answer to. And he put Fannie Mae’s CEO, who helped create this problem in charge of finding his Vice President. That’s not change, that’s what’s broken in Washington."

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  16. Bisi

    Bisi TS Member

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    Yeah, BigDon we're too stupid to figure it out.

    After reading what you wrote about the deal, it sounds great! I wonder why private equity didn't jump on it? Their probably stupid too.
     
  17. BIGDON

    BIGDON Well-Known Member

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    Bisi you are proving your own point. A line of credit to a company, AIG, with over a 1 trillion in assets, that's trillion with a T. Doesn't sound like to bad an investment to me. Do you understand a "line of credit" that can be use as colateral to prop up current loans they have. Jesus get out of your cave and try to understand what is going on. No money changed hands. In addition the AIG chairman and CEO is forced to resign, so it's not business as usual.

    Don
     
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