Fed to loan 85 B to AIG.

Your tax dollars hard at work.

Yeah, since the other bailouts haven't cause a disaster yet, some brilliant minds think more is better. I can't disagree more!

NO WAY!

More taxpayer Billions to save a company that was stupid. You've got to force stupid companies into bankruptcy.

$85 Billion is so much money that it isn't even funny.

This is ridiculous.

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Are ANY of these executives going to be held accountable for their poor leadership in thinking that this would not happen? FLB has been preaching this was inevitable for at least a year. Any person with common sense knew house prices could not continue climbing, yet these bozos continued coming up with more and more convoluted schemes (scams) to make billions, knowing they would walk away rich.
At least the CEO's of Fannie and Freddie don't get their $25Million parachutes. So they've lost millions in stock, BFD they've got million more in ill gotten gains and should be forced to pay back any bonus's (bonusi?) they got in this ridiculous run up.
GFC, where can I get a piddly 3% return now? I'm down 13% Year to date. Correction: it's now 15.2% as I just updated my prices.

What are the odds that this "loan" and the interest on the "loan" will ever be paid back?

Back in the 70s, the bailout of Chrylser was only 1.5 Billion, and they paid it back a year early, with interested. This is UNREAL!

0%

For one thing, it's BLACK LETTER LAW ILLEGAL!!!!

Where the hell are the cops?

I'll have more on this later.

Source: The Constitution of the United States.

Hang these bastards.

The problem is that while the big boys may sanction, or at least not fight the sub-prime madness, many of the problems were caused by the middle management minions. No matter how much we would like to string them up by their thumbs, it won't happen. At least not by the government. The best that could be hoped for is that investors file civil suits against them. Good luck in finding a lawyer when the victim and those responsible do not have deep pockets.

The Feds had a tough call to make. Do you allow them to fail from their own culpibility, or do we save them and maybe prevent a crisis for the millions of innocents that get dragged down from the panic. The fustrating part is that AIG failed because they insured the fat cats against losses stemming from their bad sub-prime investments. On the bright side of things, If AIG can be pulled out of this, the treasury may even make a profit on this.

AIG will NOT be saved. The issue has been post-poned, that is all. And there is not enough money in the collective universe to back-stop all the rotting garbage on the balance sheets of companies across the globe.

Retail investors (shareholders) are getting reamed, the taxpayer is getting reamed, and the architects of this brilliant scheme (debt-holders) are being made whole at their expense.

Yesterday's felonious actions postpone and enhance the conclusion building in the credit markets. Step carefully--you know what happens when you roll a bowling ball into a room full of mouse traps!

What color is the sky in your world?

Buncha freaking geniuses...

Sept. 17 (Bloomberg) -- The cost to hedge against losses on U.S. government debt rose to a record after the Federal Reserve rescued American International Group Inc. to avert the worst financial collapse in history.

Benchmark 10-year credit-default swaps on Treasuries increased 4 basis points to 30, according to BNP Paribas SA prices at 6:45 a.m. in New York. The contracts have risen from below 2 basis points at the start of the credit crisis in July 2007 and are more than double those on government bonds sold by Austria, Finland or Sweden.

The U.S. Treasury pledged an $85 billion loan for AIG just 10 days after committing as much as $200 billion to prevent a collapse of mortgage companies Fannie Mae and Freddie Mac. The U.S. budget deficit will grow next year to $438 billion, the Congressional Budget Office said Sept. 9, making it harder for President George W. Bush's successor to either cut taxes or increase spending.

``The latest bailout comes at the expense of the U.S. taxpayer,'' Tim Brunne, a Munich-based credit strategist at UniCredit SpA, wrote in a research note today. ``It cannot be expected that AIG will survive in its present form.''

Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a country or company fail to adhere to its debt agreements. An increase indicates a deterioration in the perception of credit quality; a decline, the opposite.

Contracts on Treasuries are quoted in euros and a basis point on a credit-default swap protecting 10 million euros ($14.2 million) of debt from default for five years is equivalent to 1,000 euros a year.

The cost of protecting corporate bonds from default fell with contracts on the Markit CDX North America Investment Grade index of 125 companies in the U.S. and Canada declining 13 basis points to 187 in New York, according to broker Phoenix Partners Group.

In Europe, the Markit iTraxx Financial Index of 25 European banks and insurers declined 3 basis points to 132, according to JPMorgan Chase & Co. The Markit iTraxx Europe index of 125 companies with investment-grade ratings fell 6 basis points to 132.

Where is Congress?!!!!!

Has every one of those idiots got their head in the sand?

Are they going to let him spend us into nothing overnight?

Here's what they're doing:



NOTHING! The dam* cretins should at the very least be able to figure out how to ENFORCE THE LAW!

This is making me sick.

I should have known better than to get on this. What color is the sky in my world? Right now, its blue. As far as the government coming out ahead on this, no one knows. But the same doom and gloom was going on about the bailout of Chrysler.

The fact is that stupid moves by so-called financial whizzes have put us in a tenuous position. If the only sufferers were those who were stupid, I would say let them go down with the ship. The problem is our economy is an interwoven system that loses integrity when it loses a link. These are major links and threaten the whole system. The best financial minds in the world are not going to agree on the solution for this. And none of them is in Congress. And financial opinions are going to vary from extreme to extreme. The whole system is a shell game, and it depends on the suckers keeping their interest. If they do, and continue to invest, everyone is happy. If they take their money and go home, no one wins and everyone loses. That is how our financial system works.

I hear a lot of venting, but no real solutions. I learned a long time ago that life is not fair. The crooks win far more than they should. I tilt at the windmills I can deal with and do what I can to influence those who tilt at the others. all the garbage about the bailout being illegal is nonsense. Government can do anything they want in a crisis. If it works, they go done in history as heroes. If it fails, there are plenty of armchair quarterbacks to skewer them.

As far as quoting Harry Reid or any other politician, they are a major part of the institution that put us here. They do not care who did what, but who else they can blame for it. You have the pundits coming out of the woodwork. It reminds me of an old con game. You get 16 people and secretly tell half that a risky stock is going down, and half that it is going up. Then you do the winners the same on another stock. After four rounds, there is one person that believes you to be a genius and you get them to make a major investment through you. It is the same with Congress, but they just lie about making wrong decisions to the public

I beg to differ. There has been AMPLE information posted on these pages on what INDIVIDUALLY and COLLECTIVELY needs to be done. That the REGULATORS, INVESTMENT BANKERS, CABINET SECRETARIES, and CONGRESS continue to do exactly that which puts your personal financial situation more and more at risk, and does so with NO PUSHBACK from the body politic is beyond understanding.

Printing money into existence bankrupts the U.S. Hank and Ben drew a line in the sand on Sunday night, and on Tuesday morning they crossed it.

You are now on the hook for Bear, Fannie, Freddie, and the once-18th largest company in the WORLD, AIG. GM and Ford have there hand out for $50B. Wachovia and WaMu are on the ropes. If the bailouts don't stop RIGHT NOW, the US economy goes into the toilet. We're right on the precipice, and the next step is a doozie.

An example of specific solutions, Seadog:

I heard that AIG has assets of over a trillion dollars?? Is that true? If so, that's the same as trying to panhandle $85 to play blackjack even though you have $1,000 stashed in your hotel room...

The trillion dollar number is what was bandied about. But "good will" and other such level 3 "assets" aren't always worth in the marketplace, what they're "carried" at on the books...

Assets less liabilities, AIG is a zero (or considerably worse).

I was reading today that the CEO of LB was earning $17k per hour. He leaves with his parachute intack, gets to keep his pocket change, despite the total destruction of his company on his watch. Nice work if you can get it.

I take strong issue with criticism I have heard of late of ordinary Americans for getting the nation into the sub-prime and credit card messes in the first place. For years, Americans have been told--almost scolded-- to spend money and enjoy the advantages of being Americans living in the most prosperous nation on Earth. Credit card companies and mortgage lenders actively, aggressively, go after working people with little or no concern for what people could afford or manage. How many CC offers do you get in any given month?

These institutions either misrepresent the terms and costs of their offers or outright lie about them. There is a pending class action suit by African-Americans in the Atlanta, Georgia, area against Washington Mutual Bank for deceptive, irresponsible and unethical mortgage lending practices. When 9-11 happened and the market began to fall sharply, President Dubya's advice to Americans was to "keep shopping."

We are, and have been, a consumer culture for a long time, at least since the 1920s, and no politican Republican or Democrat who has aspired to high office has ever advised the voters to live more frugally, to spend less and live more simply. That kind of advice would insure loss at the polls.

The various chambers of commerce would make sure of that. Yes, people should try to resist the nearly overwhelming temptations of a consumer culture bent on conspicuous consumption, but the prevailing trends of our society have made that nearly impossible. The American dream, so-called, has always had a home of one's own and a shiny new car and a new boat as primary objects of prestige and proof of success. And the neigbors and friends are all doing it. Having a Quaker, Ahmish or Puritan mind set is hardly attractive to most mainstream Americans.

One can argue that there should be a middle ground between an ascetic life-style and a slavishly hedonistic one; and I suppose there is, just not in my house. However, consuming and spending become as addictive as booze and dope for many people, and there has been little or no help for those who suffer from it. Indeed, we Americans have almost always been cajoled into overconsumption. Advertising is everywhere, and no one can totally escape it. Because overconsumption is so pervasive, it can be rightly described as a socially patterned defect, as Erich Fromm would term it. As such it is hardly recognizable as a serious problem that needs counseling of some kind. No one ever talks about crashes like we have seen today as any kind of real risk from this activity.

But will there be any help for those individuals who misjudged the performance of thier 'wealth funds' in the new bailout? Will we get a few months credit from AIG for helping out here on our auto/boat premiums? Some government entity going to make my mortgage payement for a month or two to help me out ????

I seriously doubt it.

CM, your post is typical of liberalism, victimolgy in this country. What, you got no balls to take a look at your own finances and take responsibility? Don't give me this... If you don't know your own abilities, you deserve it... capitalism thrives on a free market society, free to pick and choose what you buy, what you can afford. Blame the dumbing down of society from the leftist liberalism NEA for NOT teaching economics and self reliance (it takes a village my a$$).

Deal with it. I don't want to pay for your mis-management of your money...
B-freaking-S... If you can't read, you have no business transacting business PERIOD! Don't tell me that some unsuspecting, poor black person or any other ethnicity, has been taken advantage of... most states have a cooling off period in the case of a refinance, (3 days in CA to READ THE CONTRACT). Problem is it's easier to point fingers at you rather than me....

I am so sick of this sheeeeeit!

15 months of no paycheck can make one a bit on edge, especially after a few beers....

CigarMan, (and anyone else for that matter) forgive my abruptness,..... I offer my hand in brotherhood....

But my ship is sinking, (boating tie-in!) and it's no one's fault but mine. And when I read a post about all the reasons that this or that is happening,and pointing fingers to anyone other than one's own self, well, I have no sympathy, for I have no one to blame as well...

Were there blatent predatory lending practices? Yup. Was there deception? Yup. Should AIG, Fannie, Freddie, be bailed out? Nope.
But we all have to stand up and be accountable for our own actions, regardless of the outcome.
And, there is no way in hell that these CEO's should be allowed to reap all the benefits of the golden parachutes... millions of dollars in pay, pensions, etc.... they should be required to pay them back to shareholders.....

It's not up to them (my point)... it's up to the individual, not government....

Some of your best material in that post, Nu2. Thanks for that fine effort.