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OT: Stocks Plunge After AIG Bailout

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  • OT: Stocks Plunge After AIG Bailout

    ...and the beat goes on:

    The Fed just announced an $85 Billion dollar taxpayer bailout of AIG, the insurance company who insured the junk bonds issued by Merrill Lynch, Lehman Brothers and Bear Stearns:

    On Wednesday, McCain told "Good Morning America" on ABC, millions of people with retirements, investments and insurance tied to AIG were "going to have their lives destroyed because of the greed and excess and corruption."

    Elaborating on the charge of corruption, McCain said that many Wall Street executives had claimed "everything's fine, not to worry" and that Congress and regulators had paid no attention. "All of them were asleep at the switch," he said, and went on to blame special interests and lobbyists as well.

    "it is clear that the system has been corrupted, that there has been systemic failures, that the economy has been damaged by greed and avarice, and the broken institutions between Washington and New York have now conspired in a way that has put the American economy in crisis."

    McCain repeated his call for a high-level commission, on the order of the one that investigated the Sept. 11 attacks, to review the economic troubles on Wall Street.

    In the interview, McCain called the financial crisis "one of the most severe crises in modern times,"

    "Enough is enough," McCain says in one of the commercials. "I'll meet this financial crisis head on. Reform Wall Street. New rules for fairness and honesty. I won't tolerate a system that puts you and your family at risk. Your savings, your jobs — I'll keep them safe."
    "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did."

  • #2
    I feel so much safer now.

    AIG, they paid one of my mothers life policies, refused the other. I don't have insurance with them, NOR State Farm after the Katrina episode..
    Excuse me, I farted.


    • #3
      Yeah, no kidding David -- AIG is America's largest corporate insurer. They insure pension funds, retirement plans, ...
      "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did."


      • #4
        ...and the beat goes on:
        And, on, and on, and on. . .

        Where's our moderator?

        Frank Ford


        • #5
          It probably is a bailout but doesn't look like a gift. Fed throws out top brass, owns 80% of it, sells off enough assets to back out in 2 years.

          Got an email from my mutual fund this am stating AIG and Bear Steans didn't meet their requirements and it doesn't have any money in them. Even at that, I'm down 10% so far this year. The market is like that. In the news it's always the fat cats that steal all the billions and I'm sure they do knock down plenty. Its easy to forget the millions of us small investors making 10% over bank CD rates when times are good.

          Speaking of little guys, there's supposed to be somebody in the home mortgage system that is supposed to safeguard against this crap. The appraiser. The little line item tacked on every loan for $350 or $500 to make sure the property is worth the loan. If all they do is follow the roller coaster up and down what are they getting paid for?


          • #6
            Our Tax System Explained: In Bar Stool Economics

            For those who understand, no explanation is needed.
            For those who do not understand, no explanation is possible.

            Suppose that every day, the same ten men go out for beer and the
            bill for all ten comes to $100. If they paid their bill the way we pay
            our taxes, it would go something like this:

            The first four men (the poorest) would pay nothing.
            The fifth would pay $1.
            The sixth would pay $3.
            The seventh would pay $7.
            The eighth would pay $12.
            The ninth would pay $18.
            The tenth man (the richest) would pay $59.

            So, that's what they decided to do.

            The ten men drank in the bar every day and seemed quite happy with the
            arrangement, until one day, the owner threw them a curve. 'Since you
            are all such good customers,' he said, 'I'm going to reduce the cost of
            your daily beer by $20.' Drinks for the ten now cost just $80.

            The group still wanted to pay their bill the way we pay our taxes so
            the first four men were unaffected. They would still drink for free.
            But what about the other six men - the paying customers?
            How could they divide the $20 windfall so that everyone would get his
            'fair share?' They realized that $20 divided by six is $3.33. But if
            they subtracted that from everybody's share, then the fifth man and the
            sixth man would each end up being paid to drink his beer. So, the bar
            owner suggested that it would be fair to reduce each man's bill by
            roughly the same amount, and he proceeded to work out the amounts each
            should pay.

            And so:
            The fifth man, like the first four, now paid nothing (100% savings).
            The sixth now paid $2 instead of $3 (33%savings).
            The seventh now pay $5 instead of $7 (28%savings).
            The eighth now paid $9 instead of $12 (25% savings).
            The ninth now paid $14 instead of $18 (22% savings).
            The tenth now paid $49 instead of $59 (16% saving s).

            Each of the s ix was better off than before. And the first four
            continued to drink for free.

            But once outside the restaurant, the men began to compare their savings.

            'I only got a dollar out of the $20,'declared the sixth man.
            He pointed to the tenth man, 'but he got $10'.

            'Yeah, that's right, exclaimed the fifth man. 'I only saved a
            dollar, too. It's unfair that he got ten times more than I got'

            'That's true' shouted the seventh man. 'Why should he get $10 back
            when I got only two? The wealthy get all the breaks!'

            'Wait a minute,' yelled the first four men in unison. 'We didn't
            get anything at all. The system exploits the poor!'

            The nine men surrounded the tenth and beat him up.

            The next night the tenth man didn't show up for drinks so the nine sat
            down and had beers without him. But when it came time to pay the bill,
            they discovered something important. They didn't have enough money
            between all of them for even half of the bill!
            And that, ladies and gentlemen, journalists and college professors, is
            how our tax system works. The people who pay the highest taxes get the
            most benefit from a tax reduction. Tax them too much, attack them for
            being wealthy, and they just may not show up anymore. In fact, they
            might start drinking overseas where the atmosphere is somewhat

            David R. Kamerschen, Ph.D.
            Professor of Economics
            University of Georgia

            Forwarded by HENROB JIM to me..
            Excuse me, I farted.