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AIG Bailout - Maybe a good idea!!

Discussion in 'Uncategorized Threads' started by Jeff P, Sep 24, 2008.

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  1. Jeff P

    Jeff P Well-Known Member

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    Well, for sure i want my $425.

    I'm positive I can do all that great stuff with the $850.

    A lot of people, the original poster included, are faaaaar to stupid to handle that kind of money.
     
  2. Easystreet

    Easystreet Well-Known Member

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    RickN is correct. It's only $425 per each adult over 18.

    Easystreet
     
  3. Rico46

    Rico46 TS Member

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    Unfortunately, if we did not bailout AIG you would have a similiar situation in the property & casualty market, as do currently with the financial sector, which AIG is a part.

    AIG was the largest insurer in the world. A company with AIG presence had tremendous capacity ( ability to underwrite risk ) in the insurance market. AIG insures many domestic & international risks. They also underwrite insurance programs many other carriers simply don't have the expertise to do. The solvency of the insurance market is critical do to the potential for catastrophic loss ( hurricanes, tornado's and even man made losses). AIG, made some very bad financial decisions and will pay for it now. The capital infusion makes good sense to stabilize/protect the entire insurance industry. This will be one company where the government will get every dime back.

    Rick Brohmer
     
  4. bigdogtx

    bigdogtx Well-Known Member

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    + 1 to Rick's post.
     
  5. bradhe

    bradhe TS Member

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    I agree with Rick as well. AIGs problem was liquidity to support their credit default swap position; they probably actually have enough capital. I suspect that if the government allowed private parties to participate in their deal that there would be a lot of takers. The problem in the days leading up to it was that there was no private party big enough to pony up $85B or with enough power to demand 80% of the company. The taxpayers will likely make money on this on (as incidently they did on the Chrysler "bailout" before) This will look like a pretty shrewd investment. Fannie and Freddie are a different situation, the taxpayers are going to lose a lot there.
     
  6. Jeff P

    Jeff P Well-Known Member

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    Now my serious answer...bradhe and rick have it right on the nose. its' the credit default swaps that are mucking things up. AIG is right in the middle of the market.

    When people want to hedge fixed interest debt against variable interest investments, they head to AIG and get a deal whereby folks trade debt...thereby matching their assets / liabilities. Thats the simplified version, of course, but you pull AIG out of the middle of the market, and no one would be able to tell who they owed or what they were owed.

    If a bank can't figure that out, they can't make loans. No loans, no new houses, cars, boats, etc etc etc and you get an economic meltdown, plain and simple...
     
  7. halfmile

    halfmile Well-Known Member

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    Green Bay Wisconsin
    221, years ago snake oil salesmen were successful selling cures to people.

    They were not cures. this does not make the people who bought them fools, although they were gullible to an extent.

    The Image was put forth, and pushed repeatedly till it was accepted.

    A house, 2 cars, a Harley and a jet ski, we deserve all that as long as we make the payments.

    People bought cars without even knowing the final price. Just "what was the payment?"

    Conservatism and fiscal responsibility were fuddy duddy old fashioned.

    Fools? or people sucked in by liars?

    Your call. Be sure and vote for your favorite liar.

    HM
     
  8. fearlessfain

    fearlessfain TS Member

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    how do those stupid ceo.s get those jobs?
     
  9. BIGDON

    BIGDON Well-Known Member

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    Cost the AIG CEO his job. By the way the bailout is a line of credit that can be used as collateral because of drop in rating requiring more collateral to support loans. They have assets of over a Trillion dollars - good loan.

    Don
     
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