How come people are not raising red flags over the federal reserve takeover of AIG?

[nthfinity]

Originally Posted by 04RCSTI If anyone has questions or concerns let me know I'd be happy to help.

I accidentally a cocacola bottle. Is this bad?

[graywolf624]

...that has never happened before, ever!

1929, 1983, 1990 all come to mind.. Ever indeed.

[RC45]

Originally Posted by 04RCSTI The issue is that these are extraordinary times and the normal rules hardly apply.

Spoken like someone from the "inside" with a vested interest and a lot to lose if the rules are followed - it is always the "extraordinary times" that seem to require the abandonment of the commonsense checks, balances and rules that lead directly to all the huge failures, collapses in human history that when analysed by following generations all turned otu to be avoidable and preventable had commonsense and established rules of engagement been observed.

[mayer]

This isn't a financial message board, and these topics take up way too much time to debate. I'll just say that I too work at a B/D 04RCSTI, but I respectfully disagree. Some of these companies and a-holes need a good caning.

It's funny that the U.S. pushes capitalism on the world and now our government is putting its citizens on the line, rescuing Wall Street and the Chinese. We're told it's to save the housing market and the economy. They were scrambling years ago to find affordable housing for the average Joe, well here we have a solution in front of our faces. Let things get back to the fundamentals instead of loaning money to people who could never afford it in the first place. Most of these Alt-A and subprime loans were based on fraud.

No, it seems both parties want to chain the American public to their loans, and make them slaves to their astronomical mortgages and the banks. Most of the politicians from both sides are lame. Too bad Ron Paul couldn't garner more support. That's one guy who "gets it". Let housing get affordable again, let the price-income ratio find some normalcy, and let financial institutions who made bad decisions go under. Rant over. Ciao.

[04RCSTI]

Graywolf, I was talking specifically about Goldman's stock and the specific way in which it happened regarding mutual funds shorting the hell out of it and spiking their CDS's.

and RC, truly spoken like someone from the "outside." So you would rather just let the whole world economy crash? Or would you rather have to break the "rules" and bail out some companies that failed because of a completely irresponsible system that finally caught up to us? You think we like it? Nobody said it is fair, nobody said it was right. Its a last ditch effort to save an economy that is fundamentally fucked up. I don't like the situation any more than you do, but it had to be done for the good of everyone.

I don't have anything to lose either...but when you hear calls from people who are worried because their millions of dollars of savings are in limbo just because mutual funds are shorting the shit out of a company while they spread rumors and hike up the CDS's then you start noticing how crazy the situation we are in is. What I said is that desperate times call for desperate measures. You seem to think that I'm supporting the fed and their decisions or that I agree with it. What I disagree with is 25000 people losing their jobs in NY because the system and the "rules and checks and balances" that you speak of didnt work in the first place. The commonsense checks and balances were abandoned years ago when financials started collateralizing sub prime mortgages. It is exactly a lack of these checks and balances that have led us to where we are. Sadly EVERYONE else has to suffer for the irresponsible acts that blew the bubble. Now we are paying for it hard.

I'm not going to get into details here, its obviously politics and this is not the place to discuss.

[04RCSTI]

Haha Mayer, you beat me to it, but more or less the same. I guess I should've been more specific with my first comment....

I definitely ABSOLUTELY agree that some of these companies DO deserve what they have coming to them, NO doubt about that. On the other hand we CANNOT allow the economy to go to shit any more than it has already. This past week has been insane. Sorry I'm just venting now haha.

[marcefer]

I don't like bank rescues, or mamooth insurance company recues where many banks are insured.
But it's like those bitter medicines: if you don't take it, it'll be much worst.
Just think who loses more when a bank fails. Thousands of individuals lose much more than the well paid executives.

[graywolf624]

because mutual funds are shorting the shit out of a company while they spread rumors and hike up the CDS's then you start noticing how crazy the situation we are in is.

The last time I checked, mutual funds weren't allowed more then 30 percent in short funds. I think your pointing the finger at the wrong group. I also think you still don't get it. At this point it is too late to avoid the recession. You can take it like a man or delay the inevitable. This shit is comming one way or the other.

[10000rpmlover]

Originally Posted by 04RCSTI Haha Mayer, you beat me to it, but more or less the same. I guess I should've been more specific with my first comment.... I definitely ABSOLUTELY agree that some of these companies DO deserve what they have coming to them, NO doubt about that. On the other hand we CANNOT allow the economy to go to shit any more than it has already. This past week has been insane. Sorry I'm just venting now haha.

so let me get this straight, you are perfectly ok with Allan Greenspan and his set of evil bastards at the federal reserve bank gain control of one of the biggest financial institutions in the world?

Because that is what is gonna happen, they would gain controlling power on the AIG board with only 85B investment, in a company that is probably worth close to a (cue Dr Evil voice) "Trillion fricking dollars" doesn't it bring back memories of JP Morgan back in 1929?

The federal reserve bank is a private organization with the ability to print money out of nothing, they can obviously just print 85 billion without remorse, the moeny does not need any backing whatsoever, it is just worthless paper made under a promise that the US governement will pay it back, I have never been a fan of it since it locks the government into a never ending cycle of debt, which will only get bigger now with an extra 85 billion + interest, yes you know there will be interest to AIG, and they will never pay it, so Greenspan, Wolfowitz, Rockefeller, Jensen, Morgan and a few others will get richer and richer, what is next, Microsoft tanking and federal reserve take over? there is already a plan to take over GM...

We already blindly pay an illegal income tax that does not pay for any service tendered to us, it pays the FEDRES bankers

Oh just why the hell can't we have Ron Paul as president?

[nthfinity]

Some of the wise on Wall Street seem to not be fretting like some of you guys are.

One of the wall st. Billionaires I've had the pleasure of adding to my speed dial has said such things as "This is nothing like 1929. I had lunch with a trader who was there just yesterday"

Although, he also had some insite prior to all these Bailouts. "A company can only grow so big, at that point, the government will take it over. Eventually, every large company will either merge, or be absorbed into the government company"

This is the start of that in no small way. We are on an unstopable march into communism. Socialism is just a step along the path.

The natural way of these things happening has long been the best. Bankrupcy, and hostile takeover for pennies on the dollar; downsizing, then rebuilding; all while some new kid on the block takes advantage of the process.

People get hurt all the time in the market. We survived the last crash quite well; and I'd much rather go through it the "hard" way then killing the market we have long relied on to grow the economy.

BTW, one of the reasons why Ron didn't win the primaries is because of his followers are far crazier than he is. He is crazy, and his associates are crazy.

My guy didn't win the primaries either; but I wouldn't dare waste my vote.

[04RCSTI]

10000rpmlover, its not about Greenspan taking over the world. This isnt a freaking conspiracy. The economy is kicking an screaming for liquidity and they are trying to infuse as much cash as they can.

Did I say ANYWHERE I was OK with it? In fact I said the opposite, I'm not ok with this. It's just a way of keeping the economy afloat.

Originally Posted by graywolf624 The last time I checked, mutual funds weren't allowed more then 30 percent in short funds. I think your pointing the finger at the wrong group. I also think you still don't get it. At this point it is too late to avoid the recession. You can take it like a man or delay the inevitable. This shit is comming one way or the other.

Where did I say anything about percentages or anything. I'm not saying funds are directly responsible for whats going on. They were partly responsible for what happened to MS and GS stock today. The moment short selling rules changed, did you notice the flood of people trying to cover their assess today? Full disclosure of short selling and BAM stocks up 15% in a matter of half an hour.

I'm not pointing fingers at any SINGLE entity for whats going on in the market overall, I was giving an example of what I meant by the type of crazy shit that's going on these days. It might be too late to avoid a recession, but you must be insane if you're thinking that we should sit back and let it roll us over since "at this point its too late to avoid" it. You can take it like a man or delay the inevitable? That's the kind of bullshit that drove the market down 450 points yesterday. You should work for CNBC. It may be coming, but don't you think we should try and minimize the effects?

[Mattk]

What makes today's problem much more difficult is the more globalised nature of these companies. Globalisation has been going on for half a millenium, but the world has never been so integrated in an economic sense.

Also, it is not as if the Federal Reserve is buying AIG. They are acting as a lender of last resort, a common role for such independent institutions and a role they are meant to play. Yes, it is run by people from the business sector, but it's not like they have anything to gain from it except a stable economy.

[RC45]

Originally Posted by 04RCSTI and RC, truly spoken like someone from the "outside." So you would rather just let the whole world economy crash? Or would you rather have to break the "rules" and bail out some companies that failed because of a completely irresponsible system that finally caught up to us? You think we like it? Nobody said it is fair, nobody said it was right. Its a last ditch effort to save an economy that is fundamentally fucked up. I don't like the situation any more than you do, but it had to be done for the good of everyone.

Breaking the rules wont chnge the fundmental laws that drives economies - it will, as has been said, just put off the inevitable.

BTW, when I said "spoken like someone from the inside" - it wasnt a compliment, some of you guys really have the same misguided enthusiasm and belief in "broken rules" that some of the "insiders" I got know who used to work for Enron.

Each one of them ended up falling and failing along with their house of cards - just because you "believe it will work" doesnt mean it will

Hopefully you some simple assets to help you survive the coming years - things like a paid off house, zero balance credit cards nd a lifestyle that is easily trimmed to eastern european standards of comfort

Originally Posted by Mattk Yes, it is run by people from the business sector, but it's not like they have anything to gain from it except a stable economy.

These same people have played a huge part in the current economic situation - what makes you think they will not fuck it up as they try "save" it?

[Mattk]

^Well, saying 'let the market work it out' also relies on the business sector to fix itself. No real difference. The Federal Reserve was created to fix things up. Perhaps it's a good idea to let them do their job.

[styla21]

Maybe you guys can answer this question; Gray, i'm interested to hear your response in particular.

The U.S. dollar: It's continually strengthening across world markets, but why? Is there some sort of good news about the U.S. economy I've missed? Is the U.S. tax code suddenly more capital friendly? Are national levels of wages and household incomes rising? Is the labor force suddenly more focused on producing goods that the world wants to buy by the boatload? Are government expenditures suddenly under control? Really, where's the good news? For two months now the dollar has been strengthening.. I must be missing something.


Also, the U.S. government just seized Fannie and Freddie. Don't these firms count as major banks, what with their $5 trillion and more of liabilities? They're both too big to fail, yet too big to bail. Really does anyone have a spare $5 trillion lying around?
The US Fed, (Mattk) is socializing the financial side of the US housing market. That is a disastrous move, that doesn't stablise the markets. It gets everyone high, has a good trip for a few hours, then comes crashing down.