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September 29, 2014

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Ignatz

It's much better to restore the market's confidence with trillions of dollars of debt and free money someone else will have to pay back.
Six years on; worked out great for the Dow, not quite so great for everyone else.

matt

It wasn't just AIG. It was pretty much the entire financial edifice that was ready to go down. How it was handled was in protecting a number of cronies and pumping close to $1 Trillion into the system that essentially disappeared - poof.

Comanche Voter

Forcing Greenberg out was the original sin. You get regulatory agencies and state and federal prosecutors with an agenda, who believe they know how to run companies better than company executives--and you get trouble.

I remind you that Senator Jean Fraud Kerry failed at running a donut shop--which sort of establishes the business competence level of government officers in general.

Jane

Where was the donut shop?

Pagar a bacon, ham and sausage supporter

IMO, that trillion dollars has shown back up in the money the Democrats
Are using in the 2014 election .
It also shows up in such BS as the Democrat attack ad that the NYTs is running as a regular article saying that Iowa has sunk so low that it is now OK for the Democrats to run an ad condemning the Republican candidate for being against the killing of inconvenient children.

jimmyk

Forcing Greenberg out was the original sin.

Thank you, Client 9.

rse

Watching Henry Paulson at the Boao Forum in early September pushing its Corporatist, Chinese model on the US helps explain the incentives back in the fall of 2008.

Protect the Planning Oligarchs and their Cooperating Cronies.

glasater

As I remember it - Warren Buffett so heroically jumped in to loan GS money after perceiving they would be bailed out.
#whataguy

Hope someone corrects my memory if I'm wrong.

Threadkiller

Stupid homeowners.

NKrebooting

This is a cool subject for me:

1. In a day after Lehman call to Sandy Weil, Hank Greenberg bitterly complained about the exotic derivatives book he started in the early 90s, but which was designed to be sold before or at market peak-- after Client 9 forced him out, the AIG 'managment'liked the trading fees from the book (from which they paid themselves bonuses), and they held on to the book and all of the risk. That's one billionaire's claim anyway ( I was there for the call-- it was like a funeral notice).

2. An AIG auditor relation explained to me that much of the debt held by AIG was collateralized with Fannie/Freddie stock. What could possibly go wrong with THAT?

Goldman get's 100 cents/Dollar? Aside from the obvious vampire squid cronyism, I say look at the foreign banks that were owed by AIG for the answer.

jimmyk

I say look at the foreign banks that were owed by AIG for the answer.

NK, I know that applies to the F&F bailout, as foreigners would have viewed anything less than 100 cents on the dollar like a default on Treasuries. I don't see how that applies to AIG.

On the larger point: Stockman claims in his book that AIG's problems were all safely firewalled from the healthy parts of the operation. Is that just false?

NKrebooting

JimmyK-- if AIG 's obligations to the Euro Banks went unmet, the Euro Banks fail. From what I was told, yes that is false, because the Fannie stock collateral collapsed so AIG was on the hook to make good on the payments to GS/Euro banks.

glasater

So I know its simplistic to say but pretty true nonetheless - our government set the whole mess up beginning with Clinton and CRA.

And HOlder and Obama ran a huge shakedown operation of BAC and JPM and others to pay off organizations who will donate to D's and watermelons.

If you think Janet is upset about Pigford etc I think she is being far too kind.

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