What do you guys think about this? I think if a private institution fails we should not be on the hook for it as a society. If a stockholder buys into a company they also have to accept the risk that it could fail. If the stocks take a hit then they take a hit. This seems like one big cycle of bullshit to me. They(AIG) take on MBS from loans made to people who could never pay them back, and record the interest as profit without worrying about the long term consequences. Then those fail and the government takes more borrowed money from the taxpayers and bails them out. So they win, the bank who originated the stupid loans wins, and the home builders win. Who looses? the people who had some equity in the home but then lost everything when their ARM's went up, and the taxpayers.

 

---- banks
/thread

 

Yeah, it's bullshit but it's only going to get worse before it gets any better.

 

yeah its ------- bullshit to the max, if banks start making money they dont just dump the profits into the us gov. let the ******* fail, i dont have any thing to do with any of them.

 

AIG is not a bank. They are the largest insurance company in the country. When they take your money for insurance premiums they invest it in other markets to lower insurance premiums for people and attract more customers. AIG's capital was heavily tied in the mortgage/housing market... and we know how that ended up.

That being said, I think if companies make poor choices on investing their money they should not get a blank check from the government to "fix things". Companies fail for a reason, just like animals get eaten in the wild... free market is the cornerstone of capitalism.

 

http://online.wsj.com/article/SB122156561931242905.html

It's official now, they're getting bailed out.

Even if our government didn't step in and bail them out, a foreign country/business/bank would have. There was too much foreign pressure here for us to not do something about it.

"AIG was a major seller of "credit-default swaps," essentially insurance against default on assets tied to corporate debt and mortgage securities. Weakness at AIG could force financial institutions in the U.S., Europe and Asia that bought these swaps to take write-downs or losses."

As far as why AIG is in trouble, their insurance business is great, but their "financial products" are ------- them real good.

"AIG's cash squeeze is driven in large part by losses in a unit separate from its traditional insurance businesses. That financial-products unit, which has been a part of AIG for years, sold the credit-default swap contracts designed to protect investors against default in an array of assets, including subprime mortgages."

Housing market took a ----, and AIG was left holding the bag.

 

to all the idiots..


THE FED IS NOT PART OF OUR GOV'T, it is simply a huge global bank that supplies the US and major banks with money

 

If you're talking to me...

I'll quote the first line of the article I linked: "The U.S. government seized control of American International Group Inc. -"

 

i use to have AIG insurance a while back lol.

 

The real question people need to be asking is who is going to bail out the Federal Reserve when it fails?