When All Else Failed: Govt. Bails Out AIG to Avoid Catastrophe

Give them another bonus

Perhaps you could use the word "nationalize" instead of "bail-out." It's more accurate, less inflammatory, and might even suggest that you understand what's happening.

At 8.5%, as tax payers, we may actually make money off this bailout transaction.

Question: How many more companies are we going to bail out? Answer: Until November! .......................... Also, why do tax payers have to bail out those RICH CEO's on our dime? So the individual investor gets screwed and loses everything while the decision maker (CEO) makes millions and get off scott free? And we call it the land of the free?

Why do you post "FREEBIRD"? Please elaborate.

I watched CNBC this morning in the gym and kept on seeing the words "decisive" and "preemptive" scrolling across the screen as the story was being told of the Feds $85B "bail out" of AIG. Those terms could have only been applied last week when AIG asked the Fed for a bridge loan of $20B-$40B at a time when the end result of declining that request was very well known. Therefore, the remarks that followed by Paulson, in short that they had to work this out on their own, were either founded in ignorance or cunning shrewdness BUT after the ratings agencies dealt the downgrade card, the new figure ballooned up to $85B and then the Fed steps in to bail them out; when this could have been done for less than half and created a much more calming effect in the market the week before? No, the only words that come to mind that are fitting under this situation are "opportunistic" and "predatory". If we woke this morning to a government such as China or Russia creating this game of chicken, or Russian roulette, where they forced the company to face certain bankruptcy by their actions and then stepped in to bail them out by taking 80% control, we would be deploring them for such communistic tactics. The events of the last few days are very discouraging to say the least, unless you're a voracious short-seller. It is a valid assumption to believe that if the Fed originally allowed Bear Stearns to fail then the markets may have established a bottom at that point and the "stark realities" would have forced LEH, AIG and even MER to act in a much more serious and urgent manner leaving us in a far better position today. No one is too big to fail especially a company like AIG that had such valuable assets. Even in bankruptcy these assets would have been sold at par, or some even above par, and the toxic stuff would have disappeared as it should but the end result would have been true equilibrium in the markets (after some necessary pain). Now the questions still remain and the game of chicken keeps on going.

How can we make money off of this? 8.5% of what?

Last weekend the fed said ..."We are not bailing out another institution (i.e. referring to AIG in this case) and put the tax payers' money at risk" and now they say AIG is too big a company not to bail out !!! C'mooon ...that way every company will be bailed out ...Clearly, the tax payers money is in the wrong hands!!

A good question for both presidential candidates will be how far they are willing to go to continue bailing out banks/big companies in trouble. we will have a lot more of those in the upcoming administration. Daniel Ivandjiiski

I watched CNBC this morning in the gym and kept on seeing the words "decisive" and "preemptive" scrolling across the screen as the story was being told of the Feds $85B "bail out" of AIG. Those terms could have only been applied last week when AIG asked the Fed for a bridge loan of $20B-$40B at a time when the end result of declining that request was very well known. Therefore, the remarks that followed by Paulson, in short that they had to work this out on their own, were either founded in ignorance or cunning shrewdness BUT after the ratings agencies dealt the downgrade card, the new figure ballooned up to $85B and then the Fed steps in to bail them out; when this could have been done for less than half and created a much more calming effect in the market the week before? No, the only words that come to mind that are fitting under this situation are "opportunistic" and "predatory". If we woke this morning to a government such as China or Russia creating this game of chicken, or Russian roulette, where they forced the company to face certain bankruptcy by their actions and then stepped in to bail them out by taking 80% control, we would be deploring them for such communistic tactics. The events of the last few days are very discouraging to say the least, unless you're a voracious short-seller. It is a valid assumption to believe that if the Fed originally allowed Bear Stearns to fail then the markets may have established a bottom at that point and the "stark realities" would have forced LEH, AIG and even MER to act in a much more serious and urgent manner leaving us in a far better position today. No one is too big to fail especially a company like AIG that had such valuable assets. Even in bankruptcy these assets would have been sold at par, or some even above par, and the toxic stuff would have disappeared as it should but the end result would have been true equilibrium in the markets (after some necessary pain). Now the questions still remain and the game of chicken keeps on going.

When will it end? Why doesn’t the FED just give the hardworking citizens, who by circumstance of job loss or medical emergency, the key to their house dept free? This would probably cost the taxpayer less in the long run, free up the homeowner’s money which they will then use to stimulate the economy, keep the house of the market thereby stopping the slide in prices, and stop rewarding the greedy risk takers who created this mess?

Republicans = Socialism at its very best!

First ....Decrease the pays of the CEOs or put a cap on how much they earn...They made millions in the form of bonuses on all fraudulent balance sheets in the past years ...... Now, they should be asked to pay for these ...Why should the tax payers pay for the CEOs mistakes !!

They should sell of Stowe Mountain Resort off first then every other"playground" they have to recover from stupidity! Greenburg cooked the books and his son got pinched for it..

Great.....more money to be printed. We can't even meet our current obligations on our national, sorry, I mean FOREIGN debt. U.S. to lose its AAA credit rating October 2008. Then, we will see a hybrid crisis: Inflation on paper, deflation for the masses. How many dollars are in your pocket? Well, the dollar will be worthless and at the same time, we won't have access to any. Bernanke said it right....."we caused the G Depression, through deflation, but we won't do it again". Technically, he wasn't lying.........I feel sick today....

My partially informed opinion is that the financial abuse that AIG has wrought in States like Calif., e.g., when they attempted to wipe out the smaller Work Comp insurers, tells me that they shouldn't have been saved. They've brought failure of smaller insurers by underpricing their products (in order to compete the smaller insurers had to reduce prices). Now will that same sort of abuse be sanctioned by the USA?

Seriously, someone need to go to jail for causing all these. I am seriously piss off!!!!

America's economy was never survivable long term, after all I wrote a book on that subject. Exponential growth and infinite consumption in a finite world is mathematically impossible. The Math, being the exact science, was both correct and predictable. All of the failures are merely symptoms of a much greater problem.

From Wikipedia: The primary motivation for creating the Federal Reserve System was to address banking panics.

i think it's all a good thing!