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[PTTG??]

Ohhhhh man. AIG is going to collapse- with the stock sell-off on the rumors- I work in the Sacramento branch office and I know for sure- the local VP just resigned right now- he walked right out and left. He knew something.

The're keeping it secret so that the top executives can still get out with some money- but don't let them! They're doing an Enron thing! Tell everyone you know to get their stocks out while they can!

I know this isn't exactly a jet-set group, but on the off chance...

[Strife26]

The Begining Of The End Of Capitalism. Remember That Bank Accounts Are Insured, So Just Dump The Stock.

[Akroma]

lol at everyone acting so suprised. Not like something like that happening this or next year was a total suprise

those who have no stocks, rejoice, now is the best time to buy some and earn some money in the next, ineffitable, boom

[Nilocy]

The Begining Of The End Of Capitalism. Remember That Bank Accounts Are Insured, So Just Dump The Stock.

NEVAR! Capitalism shall always rule! And its people who dislike it that are causing all the problems with it! Just embrace the awesomey feeling of being a cog in the machine.

[KaelGotDwarves]

Well yeah. I actually have stocks in the market.

The US GOVERNMENT asked two banks to prop up AIG a few billion... but considering how rampant lending sparked this shitty mortgage/economy crisis in the first place... god damn we're fucked so hard.

[Earthquake Damage]

The US GOVERNMENT asked two banks to prop up AIG a few billion... but considering how rampant lending sparked this shitty mortgage/economy crisis in the first place... god damn we're fucked so hard.

I don't see why anyone should throw money at a failing business to keep it afloat.  Unhealthy businesses die while healthy ones thrive.  It's the nature of the system.  Or did I miss a memo?

[KaelGotDwarves]

The US GOVERNMENT asked two banks to prop up AIG a few billion... but considering how rampant lending sparked this shitty mortgage/economy crisis in the first place... god damn we're fucked so hard.

I don't see why anyone should throw money at a failing business to keep it afloat.  Unhealthy businesses die while healthy ones thrive.  It's the nature of the system.  Or did I miss a memo?

US Gov's bailing out of major lending institutions Fannie Mae and Freddie Mac and using our tax dollars to prop them up, thus establishing economic socialism/communism in America, but only for once rich too large to fail companies.

Didn't you get that memo?

EDIT: for spelling.

[Zako]

I didn't...

But then again, I don't have shares in anything, so I don't really care. 

[KaelGotDwarves]

Well just for the record, we're probably more socialist than China economically right now.

USA #1!

Since the news hasn't carried out how big the story is...

Here's an idea of how fucked we are.

[Zako]

I don't get it....

[Duke 2.0]

Spoiler: And remember (click to show/hide)

 And remember: Neither party is really going to help this. Republicans are now Democrats, Democrats are Socialists, and the independents are anarchists.

 But also remember: American Socialists and anarchists are different from their European counterparts. Our Socialists use a more subtle method of gaining public support(Because we lack revolutionary conditions that spawn them), and our anarchists merely want a small government, not a total disband.

Although I don't want to get much more into this. If I have learned anything, politics and the interwebs don't mix. Particularly if the general public wants one thing, any other opinions will be made out to be an idiot. Then there is the argument "Where is your support? What evidence is there?" Which sucks, as the sources for such things are obscured in some strange locations and are often edited depending on who posted it.

 So in summary, I don't want to debate things on the internet because it will just be my word versus somebody elses. Then one side gets the bright idea to make the other side seem less intelligent by insulting their intelligence, and a flame war erupts.

[Thunderwoot]

Spoiler: And remember (click to show/hide)

 And remember: Neither party is really going to help this. Republicans are now Democrats, Democrats are Socialists, and the independents are anarchists.

 But also remember: American Socialists and anarchists are different from their European counterparts. Our Socialists use a more subtle method of gaining public support(Because we lack revolutionary conditions that spawn them), and our anarchists merely want a small government, not a total disband.

Although I don't want to get much more into this. If I have learned anything, politics and the interwebs don't mix. Particularly if the general public wants one thing, any other opinions will be made out to be an idiot. Then there is the argument "Where is your support? What evidence is there?" Which sucks, as the sources for such things are obscured in some strange locations and are often edited depending on who posted it.

 So in summary, I don't want to debate things on the internet because it will just be my word versus somebody elses. Then one side gets the bright idea to make the other side seem less intelligent by insulting their intelligence, and a flame war erupts.

lol you think that democrats are radical leftists. If anything everyone in america is shifting more and more to the right

Edit: oh hey it looks like you fell for some kind of red scare thing too and think that socialists are an insidious evil corrupting our government i could be misreading that though

[Aqizzar]

Fuel for the fire, because I have enough tertiary understanding of this to at least comment on it.

I don't get it....

Depository Institutions is a fancy way of saying accredited banks, members of the American banking system.  When banks are short on money and can't cover what people have stored or invested in them, they borrow from the Federal Reserve to cover their holdings difference in the short term so a panicked bank run won't collapse them.

American banks have been doling out money on loans and investments they can't collect on now, because the recipients can't pay them back.  The federal government bailed out the big banks and real-estators to keep them from dragging the entire investment economy down with them as the pillars of the market disappear.  Don't think it wasn't, and is, controversial that the Bush administration of all folks turned investment risk into a matter of the public treasury.  Don't think you've seen the last either.

That monumental wall on the present day there?  That's a big neon saying saying, "The big banking system is fucked."  This will effect you too, even if you don't have any investments or bonds.  Your bank, your employer, his bank, your landowner, and probably your extended family do, and you're going down with them.  The only people safe from this are people who don't have money to loose, and you'll be in even bigger trouble as goods pricing skyrockets.

[Royal Surveyor]

If you are an individual investor, now is the worst possible time to leave the table.

End of capitalism?  Probably not.  Being one of those insane souls who enjoys personal investing, and has had decent luck, it pains me to say this:  This has to happen.  It's capitalism at its finest.

The financial system, apart from commercial banks started to make some really risky bets a few years ago, leveraging a lot of cash against nearly nothing.   Suddenly, one of their biggest pieces of assets (the housing market) starts to implode and they're left holding their hats, which really should have come as no surprise given the number of high rated bonds to the amount of subprime mortgage companies that were out there.  Something was very rotten.

Did I once consider investing in these guys?  Oh, yes.  Did I?  Hell, no, not after I thought about it a few days.

I really do not think that the Fed or the Treasury will bail out AIG.  It would set precedent about bailing out a lot of other institutions: hedge funds, venture capital firms, etc.  That would not be good, and I think that there would be a lot of blowback because Joe Taxpayer is already a little perturbed by the housing crisis, energy prices, and the weak dollar.  Spending more on bailing out the well-heeled would be bad press.

Fannie and Freddie were oddballs in this whole mess.  They were not private sector and they were not public sector.  There was a lot of blurry lines regarding what they could or could not do as a result.  I think that by making them completely one or the other, things will get better.  Honestly, even as a pretty staunch capitalist, it might be better in the long run if those firms are ran by the government.  We might even see the emergence of similar, private firms to compete under the private sector rule-set.

Bottom line:  These companies deserve to be bitch slapped by the market for their excesses, and yes, it will be painful for the rest of us.  This is always the result of self-feeding in the market; I'm dating myself, but does anyone remember the fallout in the early 90s, the early 00s when the same sort of shit storm happened?

If you're wise about it, you'll just keep putting your, slow, regular amounts in, looking for good deals, and most of all, DON'T PANIC.  Good deals might be difficult to tease out of the mess, but they are there, and now seems to be the beginnings of a prime buying opportunity.  Remember, if you're not a floor trader, you ought not be worried about the changes over a minute, hour, or even a quarter.  You're horizon is five or ten years away.

As for foreign nations holding US debt, that's tossed around a lot.  It's usually not a big deal, but then again, no one thought it was before WW1 either (I highly recommend Niall Ferguson's The War Of The World for those interested in the financial and social links during the Great War (WWs 1 & 2)).  On the other hand, everyone said that the Japanese would own the US by the end of the 1980s.  They didn't.   This time is a little wonky because Congress has raised the debt limit for the US Government several times in the past 8 years to fund some very expensive adventures, so we will probably see some serious payback in some form in the next two decades.  We'll see.

[Thunderwoot]

http://money.cnn.com/2008/09/16/news/companies/AIG/index.htm?cnn=yes

NEW YORK (CNNMoney.com) -- In an unprecedented move, the Federal Reserve Board is lending as much as $85 billion to rescue crumbling insurer American International Group, officials announced Tuesday evening.

The Fed authorized the Federal Reserve Bank of New York to lend AIG (AIG, Fortune 500) the funds. In return, the federal government will receive a 79.9% stake in the company.

Officials decided they had to act lest the nation's largest insurer file bankruptcy. Such a move would roil world markets since AIG (AIG, Fortune 500) has $1.1 trillion in assets and 74 million clients in 130 countries.

An eventual liquidation of the company is most likely, senior Fed officials said. But with the government loan, the company won't have to go through a tumultuous fire sale.

"[A] disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance," the Fed said in a statement.

The bailout marks the most dramatic turn yet in an expanding crisis that started more than a year ago with the mortgage meltdown. The resulting credit crunch is now toppling not only mainstay Wall Street players, but others in the wider financial industry.

The line of credit to AIG, which is available for two years, is designed to help the company meet its obligations, the Fed said. Interest will accrue at a steep rate of 3-month Libor plus 8.5%, which totals 11.31% at today's rates.

AIG will sell certain of its businesses with "the least possible disruption to the overall economy." The government will have veto power over the asset sales and the payment of dividends to shareholders.

The company's management will be replaced, though Fed staffers did not name the new executives. The board will remain. For customers, it will be business as usual, officials said.

Taxpayers will be protected, the Fed said, because the loan is backed by the assets of AIG and its subsidiaries. The loan is expected to be repaid from the proceeds of the asset sales.

The government had resisted throwing a lifeline to AIG, hoping to entice investment firms to set up a $75 billion rescue fund. Officials opted not to bail out Lehman Brothers, which filed for bankruptcy on Monday. But by Tuesday night, it became clearer that the private sector would not step in to help AIG, which has a greater reach into other financial companies and markets than Lehman does...

this actually looks like a good thing since AIG going under would be terrible for the economy