Bailout by Fed rescues AIG

Chase · #1 09-17-2008, 08:03 AM

Analysts say the bailout of the giant insurance firm American International Group (AIG) has saved many Australian investors from making losses.
The US Federal Reserve has been forced to provide a $106 billion publicly-funded loan to AIG after talks to try and co-ordinate a privately funded bail out failed.
The company's collapse could have seen local investors lose around $1 billion worth of bonds with AIG that are due to be redeemed in two years.
The chief economist at NabCapital, Robert Henderson, says every major bank in the world would be exposed to AIG.
"Many many firms are entangled with AIG and the failure of the organisation would have ramifications right throughout the financial markets," he said.
The Australian share market reversed earlier gains to close lower despite the rescue of AIG.
After rising in early trade, local stocks fell after the deal was announced.

SOURCE....

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Kid Lester · #2 09-17-2008, 08:11 AM

This is why McCain is 100% correct on deregulation.

There is ZERO need for regulation in the markets.

They should be able to make whatever suspect decisions they want to.

If it goes wrong, they just get billion dollar bailouts and then they learn their lesson. No regulation necessary.

Bada Bing · #3 09-17-2008, 08:13 AM

The free market takes care of everything.

are we just printing more of the stuff, or still borrowing from China?

seems like printing it would be better.

Roogle · #4 09-17-2008, 09:01 AM

The Fed is a private bank. That company has no audit, and pays no taxes. Plus no government oversight whatsoever. They loan us our own currency. As such, the Fed can lend money to whom ever they wish. We can't complain if a private bank wants to bail out companies.

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A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine. - Thomas Jefferson

witchofthedogs · #5 09-17-2008, 09:01 AM

Watch, my friends, as we socialize capitalism.

Roogle · #6 09-17-2008, 09:12 AM

Quote:

Originally Posted by Bada Bing

The free market takes care of everything.

are we just printing more of the stuff, or still borrowing from China?

seems like printing it would be better.

The value of a fiat currency has to come from somewhere. We need people to invest into our currency for it to have value. If China doesn't keep buying savings bonds. The Fed can't print enough money without collapsing the currency.

Loaning AIG that type of money is nuts IMO....

__________________
A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine. - Thomas Jefferson

Green Lantern · #7 09-17-2008, 09:50 AM

We now have an insurance company. Whoo Hoo! Here comes our universal healthcare!

Roogle · #8 09-17-2008, 10:50 AM

Why is the media stating that the US government loaned the money to AIG? Which we haven't....

__________________
A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine. - Thomas Jefferson