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(Yahoo)   Former AIG Chairman and major investor in AIG feels "it's in our national interest that AIG survive."   (biz.yahoo.com) divider line 146
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498 clicks; posted to Business » on 16 Sep 2008 at 4:08 PM (5 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2008-09-16 05:03:12 PM
Sir Roderick Glossop: But did they or did they not insure shiat loans?

i think the analogy would be something along the lines of: an insurance company insures a group of soldiers returning from desert storm. they know it is more risky than average because of the possibilities of psychological issues and latent injuries, so the premiums are a little bit higher.
then a few years later they all die around the same time. turns out they were exposed to chemicals or radiation or whatever. everyone screams "well duh everyone should have seen this coming - we were using radiation tipped tank bullets - let them go bankrupt." well no, at the time of insurance it wasn't obvious and according to the actuarial tables it was solid. the only problem is they didn't count on everyone dieing at once.

/this is a horrible analogy and is based on a complete lack of military knowledge
 
2008-09-16 05:03:46 PM
Sir Roderick Glossop: thomps:
totally, it's coming down all around us, but there are certain places we need to ballast, and i respectfully believe aig is one of those places.

And what should the consequence be? If they're going to take the king's penny their obligated to do the king's bidding. What is fair?


You can bet they'll be audited every quarter for the foreseeable future.
 
2008-09-16 05:04:33 PM
Sir Roderick Glossop: And what should the consequence be? If they're going to take the king's penny their obligated to do the king's bidding. What is fair?

that is for the bargaining table, i'd say the government has a pretty strong hand to play. i'm just arguing that "fark em" is the wrong strategy.
 
2008-09-16 05:05:08 PM
Sir Roderick Glossop: thomps:
totally, it's coming down all around us, but there are certain places we need to ballast, and i respectfully believe aig is one of those places.

And what should the consequence be? If they're going to take the king's penny their obligated to do the king's bidding. What is fair?


How about making them insure houses in flood zones behind government levees? You know, become the insurance biatch for government-mandated insurance programs. The public will have insurance available, and AIG is taking their penance.
 
2008-09-16 05:09:24 PM
WaltzingMathilda: It's what lets us grow to the point that financial turmoil means drinking tap water instead of bottled, as opposed to "movin' out californee way, lookin' fo' some fruit pickin' work."

And I actually do appreciate what the financial system makes possible for our country. My contention is that these guys are richly rewarded for what they do- insanely so, in fact. And I don't have a problem with them keeping every penny as long as it is a high risk, high reward game. For reasons that are deontological as well as consequential, losing big has to be the other side of the coin.

They can't have it both ways, as weaver points out. They can't play capitalist while the trees are heavy with fruit and then play socialist when the drought hits.
 
2008-09-16 05:13:03 PM
Have you seen the little piggies
Crawling in the dirt
And for all those little piggies
Life is getting worse
Always having dirt to play around in.

Have you seen the bigger piggies
In their starched white shirts
You will find the bigger piggies
Stirring up the dirt
And they always have clean shirts to play around in.

And in their styes with all their backing
They don't care what goes on around
And in their eyes there's something lacking
What they needs a damm good whacking.

Yeah, everywhere there's lots of piggies
Playing piggy pranks
And you can see them on their trotters
Down at the piggy banks
Paying piggy thanks
To thee pig brother

- everybody: -
Everywhere there's lots of piggies
Living piggy lives
You can see them out for dinner
With their piggy wives
Clutching forks and knives to eat their bacon.
 
2008-09-16 05:14:05 PM
thomps: /this is a horrible analogy and is based on a complete lack of military knowledge

If it was a bad analogy, my ignorance about the military is buffering yours.

I do appreciate your explaining this to me. My "fark 'em" attitude isn't based entirely on a gut-level rejection of the corporate socialst whores who get the public to pay for their new sports arenas, their new Cabela's box store or what have you.

I do think fundamental issues of justice and fair play are at work, as is the importance of adverse consequences informing future decisions. You've convinced me that letting these guys crash and burn outright is not smart, but by God we'd better get more than our pound of flesh out of these assholes.

And seriously, I do like George Will's idea to make the heads of these companies that need handouts get paid on a Federal payscale.
 
2008-09-16 05:15:06 PM
Bonzo_1116:
How about making them insure houses in flood zones behind government levees? You know, become the insurance biatch for government-mandated insurance programs. The public will have insurance available, and AIG is taking their penance.


heh.
 
2008-09-16 05:16:55 PM
Bonzo_1116
There are Capitalists and Capitalist Pigs. I think in this last go round with sub-prime and its attendant failure it was a case of lots of regular Capitalists growing trotters and tushes and poking their snouts deep in the feed trough.

this happens every few decades- Capitalism demands constant growth (growth = more factors of production = more profit), and when that growth falters, everything built on the expectation of infinite growth gets taken down with it- or would, but they always seem to be able to make us work harder and/or for less pay, or inflation makes up the difference. And yet we keep on returning to the same system!

But this is it. Every major downturn before has been made up with more technology, more land, more resources; but this planet's tapped out. Oil's peaking, there's no more uncolonized land, and technology relies on an industrial base and plentiful resources. The world 20 years from now will be the world forever, until the space creatures come and enslave our distant descendants, or the sun expands to a red giant and boils off the atmosphere.

So that's why I'm saying this is our last chance to get it right, because after this those in power will have a stable system, ala feudalism in the wake of Rome, and they have never been nor will they ever be kind masters!

Most of you have designs of setting yourselves up as the wealthy ones, winners in a system of winners and losers. But you will lose- the illusory possibly of success is necessary to keep us divided, and a willing minion is more productive and less likely to rebel.
 
2008-09-16 05:18:06 PM
Sir Roderick Glossop: They can't have it both ways, as weaver points out. They can't play capitalist while the trees are heavy with fruit and then play socialist when the drought hits.

I agree 100%. I just don't think that's what's happening with AIG. No shareholder there is poised to make out with a bag of loot after the government's loan. There stock has dropped over 90% this year ... wow. We should get our pound of flesh out of this, I don't think anyone's arguing against that. You can bet the loan documents from the government will be very heavy handed ... and like I said "quarterly audits for all! hooray!"

This has been my favorite thread for a while.
 
2008-09-16 05:18:41 PM
thomps: this is a horrible analogy and is based on a complete lack of military knowledge

But pretty accurate, I'd say.

They (the banks) were all lending Big Money to each other and reaping the fees, using ratings from S&P et al which they either didn't know were incorrect or ignored this. AIG insured them, rightly thinking the ratings were correct and the bankers knew what they were doing. AIG must have derivatives for this type of thing anyway?
 
2008-09-16 05:20:02 PM
Sir Roderick Glossop: If it was a bad analogy, my ignorance about the military is buffering yours.

I do appreciate your explaining this to me. My "fark 'em" attitude isn't based entirely on a gut-level rejection of the corporate socialst whores who get the public to pay for their new sports arenas, their new Cabela's box store or what have you.

I do think fundamental issues of justice and fair play are at work, as is the importance of adverse consequences informing future decisions. You've convinced me that letting these guys crash and burn outright is not smart, but by God we'd better get more than our pound of flesh out of these assholes.

And seriously, I do like George Will's idea to make the heads of these companies that need handouts get paid on a Federal payscale.


well dammit, i hate when i have to agree with people on fark, but such is life.
 
2008-09-16 05:20:05 PM
thomps: sure, but i don't understand why you'd want to single out one shareholder to confiscate stock from. that is his only remaining link to the company.

He's the only one named in the article.
 
2008-09-16 05:20:10 PM
WaltzingMathilda: This has been my favorite thread for a while.

Seconded.
 
2008-09-16 05:20:21 PM
Bukharin: AIG is more like Bernie Mac than Freddie Mac

/it's gonna die.


Oh, I cringed, but niiiice.
 
2008-09-16 05:22:34 PM
Gobobo: AIG must have derivatives for this type of thing anyway?

i think it'd be pretty hard to match these cash flows perfectly. and regardless, the reason they need the money so quickly is their credit downgrade has forced them to put up additional collateral.
 
2008-09-16 05:24:04 PM
keylock71: Put me in the "fark 'em" camp...

Me too.
 
2008-09-16 05:25:45 PM
Tell me how much AIG was leveraged, and I will tell you how much sympathy I have for them.

The insurance subsidiaries of AIG are not the one losing cash. It's the farking parent company's investments that went bad.

"At this point the insurance companies are financially strong and solvent and fully able to meet any claims,"
-David Neustadt, spokesman for New York state insurance superintendent Eric R. Dinallo.

Link (new window)

AIG originally wanted to loot their own subsidiaries to fix their mess. They were going to fark over life insurance policies, retirement annuities, and those with policy coverage against all manner of calamities, from financial to natural disasters are put at risk just so tehy could make good on a bunch of derivative bets gone bad.

Stop lying about the cause of this problem.
 
2008-09-16 05:30:36 PM
thomps: Gobobo: AIG must have derivatives for this type of thing anyway?

i think it'd be pretty hard to match these cash flows perfectly. and regardless, the reason they need the money so quickly is their credit downgrade has forced them to put up additional collateral.


Oh yes! of course. The ratings agencies come to the farking rescue once more. How ironic, heh.
 
2008-09-16 05:32:23 PM
Gobobo: Oh yes! of course. The ratings agencies come to the farking rescue once more. How ironic, heh.

ha, i hadn't thought of that. maybe moody's has a huge short position in aig
 
2008-09-16 05:34:28 PM
palelizard: I think the only way to fix the systemic issues through government intervention would involve violent use (or believable threat of violent use) of force. That won't fix things while preserving our ideals.

I think the collapse you're talking about won't let us preserve a national ideal either--we'd likely splinter into isolationish smaller states, as most folks have more in common with their neighbor than with someone on the other side of the country. And I think, while that may not be bad in and of itself, a lot of people would get hurt in the process, and a lot of rights I feel are intrinsic to humanity would be violated.


Ok, I'm home. "That won't fix things while preserving our ideals"?! Seriously?

Look at how this nation got it's start. It was started by people who held a violent revolt against a distant government that wanted to medle in their affairs. Thomas Jefferson is quoted as saying, "Every generation needs it's own revolution."

"Splinter into isolationist states"? Sounds like a weak federal government and strong state governments... like... I don't know... State's Rights, maybe?

"a lot of rights I feel are intrinsic to humanity would be violated"? You know who's rights are being violated? Ours. The common man. Our federal government was put in place to ensure liberty, as laid out in the constitution. They've made it their job to take rights away from us at every turn. Why should I pay 23% of my pay to a government who wants to reward screw ups?

I still say fark 'em.
 
2008-09-16 05:36:09 PM
benlonghair: Thomas Jefferson is quoted as saying, "Every generation needs it's own revolution."

are you saying that the iphone is not this generation's revolution?
 
2008-09-16 05:37:24 PM
thomps: benlonghair: Thomas Jefferson is quoted as saying, "Every generation needs it's own revolution."

are you saying that the iphone is not this generation's revolution?


I thought it was Pepsi Clear.
 
2008-09-16 05:46:13 PM
benlonghair: palelizard: I think the only way to fix the systemic issues through government intervention would involve violent use (or believable threat of violent use) of force. That won't fix things while preserving our ideals.

I think the collapse you're talking about won't let us preserve a national ideal either--we'd likely splinter into isolationish smaller states, as most folks have more in common with their neighbor than with someone on the other side of the country. And I think, while that may not be bad in and of itself, a lot of people would get hurt in the process, and a lot of rights I feel are intrinsic to humanity would be violated.

Ok, I'm home. "That won't fix things while preserving our ideals"?! Seriously?

Look at how this nation got it's start. It was started by people who held a violent revolt against a distant government that wanted to medle in their affairs. Thomas Jefferson is quoted as saying, "Every generation needs it's own revolution."

"Splinter into isolationist states"? Sounds like a weak federal government and strong state governments... like... I don't know... State's Rights, maybe?

"a lot of rights I feel are intrinsic to humanity would be violated"? You know who's rights are being violated? Ours. The common man. Our federal government was put in place to ensure liberty, as laid out in the constitution. They've made it their job to take rights away from us at every turn. Why should I pay 23% of my pay to a government who wants to reward screw ups?

I still say fark 'em.


your profile says Connecticut and has a picture of a dude in a sports car ... but I'm picturing a dude holed up in a bunker in North Dakota, waiting for the opportunity to tell some fascist pigs to stay off your land.
 
2008-09-16 05:49:37 PM
skandalus: Oh, I cringed, but niiiice.

too soon?
 
2008-09-16 05:52:32 PM
WaltzingMathilda: Are you saying that if I were the leading Fire Insurance salesman, but then all of a sudden the entire country caught fire at the exact same time, and I was having a liquidity problem because I was honoring my policies and paying out (but had plenty of assets), that I am a poor underwriter? Please.

Oh, boy, more. You're the underwriter. A whole county doesn't catch fire without there being significant, decernable risks. Very dry summer. Land logged in the past 45 years that has died off. It is your JOB to assess that risk and charge acordingly so that, when those claims are made, you can cover them.

If you get to the point where you can no longer do that safely, you do one of two things. You either a) sell your liability to another insurer or b) stop selling policies. AIG was one of the largest insurers in the world, therefore option "a" was a difficult one. Therefore, the buck had to stop with them.

Anyhow, as another poster said, this isn't a fire. It's more akin to insuring someone who built on a coal vein fire^ in progress.

Here's my problem, as others have pointed out. It's not like AIG wasn't making money here. 2nd quarter 2007, AIG posted a 4.28 billion dollar profit.^ Where the fark was their rainy day fund? Because it's already raining hard.
 
2008-09-16 05:57:12 PM
WaltzingMathilda: your profile says Connecticut and has a picture of a dude in a sports car ... but I'm picturing a dude holed up in a bunker in North Dakota, waiting for the opportunity to tell some fascist pigs to stay off your land.

Oh, that's me in the pics. I'm pretty good with a smallbore rifle, but that's about it.

I read the writing on the wall, and believe in the freedom to suceed and, maybe more importantly, to fail. I believe in evolution in both nature and society. When one thing fails, another will take it's place. And thus we improve our society.

I saw a Howard Zinn quote the other day which really said it all: "Dissent is the highest form of patriotism."
 
2008-09-16 06:01:26 PM
benlonghair: Here's my problem, as others have pointed out. It's not like AIG wasn't making money here. 2nd quarter 2007, AIG posted a 4.28 billion dollar profit.^ Where the fark was their rainy day fund? Because it's already raining hard.

It was paid out to the tune of 18B over the next year on subprime claims. You think companies keep reserves at 4x their quarterly profit in liquid assets at all times? Are you high?
 
2008-09-16 06:02:37 PM
It just keeps fa(i)lling
 
2008-09-16 06:03:31 PM
benlonghair: I saw a Howard Zinn quote the other day which really said it all: "Dissent is the highest form of patriotism."

I agree 100% ... but not to the extent of causing the entire US government to collapse ... what the hell kind of patriotism is that?
 
2008-09-16 06:07:01 PM
WaltzingMathilda: benlonghair: I saw a Howard Zinn quote the other day which really said it all: "Dissent is the highest form of patriotism."

I agree 100% ... but not to the extent of causing the entire US government to collapse ... what the hell kind of patriotism is that?


I disagree, we need some sweeping reforms in this country, we are getting closer and closer to how it was in colonial times....taxes being paid with no real benefit to the common man, excessive government, rights being stripped away. Not to sound unamerican or anything. A good dose of revolution could be what this country needs to a) pull together and b) grow the hell up.
 
2008-09-16 06:12:43 PM
TRUBored: WaltzingMathilda: benlonghair: I saw a Howard Zinn quote the other day which really said it all: "Dissent is the highest form of patriotism."

I agree 100% ... but not to the extent of causing the entire US government to collapse ... what the hell kind of patriotism is that?

I disagree, we need some sweeping reforms in this country, we are getting closer and closer to how it was in colonial times....taxes being paid with no real benefit to the common man, excessive government, rights being stripped away. Not to sound unamerican or anything. A good dose of revolution could be what this country needs to a) pull together and b) grow the hell up.


I agree in some sense ... I just say let's try "voting" for the right people first. Let's be honest, if the people wanted to revolt, they'd probably try voting in some different people first before they got there. But Republicans have pretty much ruled with an iron fist for 3-4 decades, so, I don't know ... I'm tired.
 
2008-09-16 06:15:25 PM
Ok, who are the right people?

Since the 90s each presidential election has been same shiat different suit.
 
2008-09-16 06:17:57 PM
TRUBored: Ok, who are the right people?

Since the 90s each presidential election has been same shiat different suit.


I don't see it that way at all ... Clinton and Dole? Gore and Bush? Kerry and Bush? Obama and McCain?

Really? I only write there names out again because I want to make sure you're talking about US presidential candidates.
 
2008-09-16 06:19:24 PM
WaltzingMathilda: TRUBored: Ok, who are the right people?

Since the 90s each presidential election has been same shiat different suit.

I don't see it that way at all ... Clinton and Dole? Gore and Bush? Kerry and Bush? Obama and McCain?

Really? I only write there names out again because I want to make sure you're talking about US presidential candidates.


There = their ... damn it
 
2008-09-16 06:26:14 PM
The power has not been with our elected officials for a while. The power has been with the people who control the money. The presidential candidates may differ on the platforms they preach, but if the money does not want a policy passed, they will throw more money to the people who oppose the policy. Whoever controls the money controls the country. That is why the candidate doesn't matter. Same shiat, different suit.
 
2008-09-16 06:30:12 PM
just wanted to stop back in and thank everybody for an entertaining and time-killing thread.
action items before next thread:
1) supply short-term loan to AIG at usury rates
2) overthrow US government
3) make hilarious bernie mac t-shirt

get to it people!
 
2008-09-16 06:30:58 PM
WaltzingMathilda: I agree in some sense ... I just say let's try "voting" for the right people first. Let's be honest, if the people wanted to revolt, they'd probably try voting in some different people first before they got there.

This country needs to learn some damned personal responsibility. I would go so far as to say I need to learn. This is an extremely hard and painful thing to learn. The only way people will do it is if they're forced.

We are not capable of voting for the 'right people.' Most people don't even understand what the problem is. People need to be hit over the head with it. Repetedly. Very forcefully. AIG failing may be the first blow. (As an aside, who are you voting for? I'm voting Bob Barr. Of our options, he's closest to 'right'.)

WaltzingMathilda: You think companies keep reserves at 4x their quarterly profit in liquid assets at all times? Are you high?

Yes. And yes, but I wasn't when I started here.

What other option do they have? As I said. You have two options. Keep assets to cover potential losses or insure your own liablility. AIG didn't do the first and probably couldn't do the second.

There is, of course a third option. Utter failure. Corporations can get too big. AIG did. Now they're paying for it.
 
2008-09-16 07:15:00 PM
thomps: uh, "this douche" doesn't earn anything from aig anymore - he stepped down in 2005. aig doesn't need a bailout they need a bridge loan to stay liquid. given aig's size and importance in the insurance industry (as well as in opening new markets abroad for american interests) this is one of the few times that i think the government should step in to help.


Bulshiat.
 
2008-09-16 07:15:38 PM
I'll be joining that "fark me" club now.

Oh, wait, I read that wrong.

/I'll still be joining the "fark em" club.
 
2008-09-16 07:43:19 PM
A lot of interesting points in this thread, but one very key point hasn't been covered.

The reason for AIG's poor risk assessment, is down to the AAA associated ratings on the CDS backed securities. So one can reasonably argue that the buck doesn't stop with AIG, but with the investment firms coming up with borderline fraudulent investment grades.

That no action has been taken against Moody/Fitch is downright criminal.
 
2008-09-16 07:50:41 PM
Enough. No more bailouts. Ensure that the bottom of the pyramid (read "home owners who bargained in good faith") is stable, let the middlemen kick off as their risk eats them alive, and the top of the pyramid can deal with whatever results.

I've spent a decade paying into my house on a nice, simple, stable mortgage. I didn't use my home equity up like it was a no-limit AmEx card, I didn't "flip my crib," and I worked my ass off to improve both buildings and property during that decade.

I'm going to see that effort turn into shiat, because a bunch of folks lied and swindled to buy homes they couldn't afford from greedy bastards all too willing to bundle those usurious loans into get-rich-quick packages for receptive investors eager to cut a high profit off the housing balloon. My hard work is going to go bail all of these folks out - while I continue to plod along, pay my mortgage like a good little drone, knowing that my property taxes are going to go through the roof while the actual value of my house ends up in the basement.

Fark them.
 
2008-09-16 08:58:17 PM
Great signal to send. "Do what the hell you want, the U.S. government will bail you out". I can imagine the automakers are REALLY going to be crying about loans of their own. Where the hell does it end?
 
2008-09-16 11:22:09 PM
What's the big deal? This is just another corporatist scam.

/whee! - i'm using your infrastructure but am offshoring and avoiding paying taxes
//whee!
 
2008-09-17 10:23:13 AM
Bukharin: skandalus: Oh, I cringed, but niiiice.

too soon?


Lol, it's never too soon. I just cringe because I actually liked Bernie Mac.
 
2008-09-19 04:17:55 PM
"The Reagan administration is largely a figment of the public relations industry, and the public relations aspects of it, including control over language, are very striking-it's a professional public relations outfit. It was interesting to see how the choice of terms they use was carefully crafted. In both the 1980 and 1984 elections, they identified the Democrats as the "party of special interests," and that's supposed to be bad, because we're all against the special interests. But if you look closely and ask who were the special interests, they listed them: women, poor people, workers, young people, old people, ethnic minorities-in fact, the entire population. There was only one group that was not listed among the special interests: corporations. If you'll notice the campaign rhetoric, that was never a special interest, and that's right, because in their terms that's the national interest."
 
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