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AIG loses $62bn in 3 months. Sixty-Two Billion.

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M3wThr33 said:
This shit NEEDS to be criminalized.
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As I heard someone say on the street the other day, the problem with america is that we've spent all this time putting the wrong people in jail.
 
Valkyr Junkie said:
Probably the same as during the first Great Depression.
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While the economy as a whole is better now than during the great depression, the gvt has been much more active, nationalizing banks, bailouts and such. I think theyd be highly amused at that.
 
BobLoblaw said:
Why aren't the executives responsible for this mess unemployed? Permanently? They should all be blacklisted.
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like with all ignorant americans, you do not know. but they are unemployed. at least, they're not working at AIG anymore
 
Tideas said:
like with all ignorant americans, you do not know. but they are unemployed. at least, they're not working at AIG anymore
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:lol What crawled up your ass? Were you on the board or something? I was asking why aren't they unemployed forever. Not working at AIG anymore isn't the same thing.
 
colinisation said:
Reading that article and from my understanding of the whole situation I don't understand how people can call that gaming the system. AIG had a AAA rating the market expected them to have adequately examined the portfolios they were backing and price accordingly they did not. They incurred huge losses as punishment. They did what any organisation is meant to do take risk to generate profit, they failed to adequately price their risk and got jacked as a result.

The failure is with AIG and the market/government in allowing such a powerful and influental organisation to exist in the first place.
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So if I'm an insurance company, and I say I'll pay you back when you get into an accident, but I don't because I didn't set any money aside for that, you're ok with that? You think that's a reasonable business practice?
 
I just wikied the CEO

wiki said:
Edward M. Liddy is presently the CEO of American International Group (AIG), where he succeeded Robert B. Willumstad... Liddy is currently on the Board of 3M and The Kroger Company.. He has recently become a partner at private equity firm Clayton, Dubilier & Rice, which he joined in 2008.
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WTF, one job isn't enough? If your company lost 62 billion in 3 months, you shouldn't have other responsibilities (no matter how small), in my opinion at least. 62 billion is ignore kids live at the office territory. AIG lost $27,600,000 during his last lunch break!
 
Incognito said:
-----> http://www.nytimes.com/2009/02/28/business/28nocera.html?_r=1&pagewanted=all

try not to throw something
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I just read that. I'm at work. Urge to toss a stapler at the wall is rising. The level of greed blended with stupidity is mind numbing. But this stood out to me:

That foolhardy belief, in turn, led A.I.G. to commit several other stupid mistakes. When a company insures against, say, floods or earthquakes, it has to put money in reserve in case a flood happens. That’s why, as a rule, insurance companies are usually overcapitalized, with low debt ratios. But because credit-default swaps were not regulated, and were not even categorized as a traditional insurance product, A.I.G. didn’t have to put anything aside for losses. And it didn’t. Its leverage was more akin to an investment bank than an insurance company. So when housing prices started falling, and losses started piling up, it had no way to pay them off. Not understanding the real risk, the company grievously mispriced it.
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There are some chasmic regulatory gaps that helped facilitate this.

What an epic clusterfuck; we managed to bring down the worldwide economy.
 
White Mountains actually lost more per share last quarter than AIG did.. $65.78 to AIG's $22.95. Just think of what AIG would have lost without the bailouts.
 
gofreak said:
The Titanic reference makes me REALLY wish Mama Robotnik or someone similarly talented would tell this sorry tale through a series of Titanic-gifs.

edit - I like CNN's 'what would $62bn buy?' list:

http://edition.cnn.com/2009/BUSINESS/03/02/markets.whatlossbuys/index.html
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4. AIG shareholders might wish a black hole would swallow up the company's executives so why not send them into space? At $30 million a go, you could send 2,000 of them to the International Space Station -- and back if you so wished.

30 million? I'll never go to space :(

:( :( :(
 
'Let it fail' types should check out the PBS FRONTLINE episode that aired recently titled

"Inside the Meltdown" where the rationale behind what was done and how Lehman collapsed and the impact it had on other players globally was described in detail.

http://www.pbs.org/frontline
 
Almost funny how the same free-market evangelists that populate these banking institutions are now totally reliant on enormous sums of money from the government and most of them also have the government as a relatively large share-holder.

What bigger sign is needed to show that free-market principals don't work, the theory is not based on how humans behave, and they are fundamentally bad for our societies. You need regulation and clarity.
 
MrSardonic said:
Almost funny how the same free-market evangelists that populate these banking institutions are now totally reliant on enormous sums of money from the government and most of them also have the government as a relatively large share-holder.

What bigger sign is needed to show that free-market principals don't work, the theory is not based on how humans behave, and they are fundamentally bad for our societies. You need regulation and clarity.
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I think you just lit the JayDubya signal.
 
MrSardonic said:
Almost funny how the same free-market evangelists that populate these banking institutions are now totally reliant on enormous sums of money from the government and most of them also have the government as a relatively large share-holder.

What bigger sign is needed to show that free-market principals don't work, the theory is not based on how humans behave, and they are fundamentally bad for our societies. You need regulation and clarity.
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It's because the market wasn't free enough!!!!!!!
 
daw840 said:
Wow......
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you disagree that most americans are ignorant and tend to believe everything that's sprout from mainstream TV without doing the research?

come on. you give us too much credit
 
what I want to know is, where is the government getting all of this billions to pour into AIG.

They have to be taking money out of somewhere to put money into AIG. There's no way tehy're just printing money and putting it in...considering how well the dollar is doing versus all the other currency.

Or are we just loaning money from other countries and putting it into these companies?
 
Don't worry, the dollar will colapse in a year or so. We are just seeing the begining of the downfall of the western economic system. :D
 
Tideas said:
what I want to know is, where is the government getting all of this billions to pour into AIG.

They have to be taking money out of somewhere to put money into AIG. There's no way tehy're just printing money and putting it in...considering how well the dollar is doing versus all the other currency.

Or are we just loaning money from other countries and putting it into these companies?
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Oh they are not printing anymore money, the amount of tender in circulation is quite limited.

Now the Fed on the other hand is simply creating more credits out of thin air, saying here have 1 billion extra credits in your account.

The treasury issues debt to pay for stuff, the fed just prints.
 
kaching said:
I'm referring to something at a much different scale here...at a basic individual level, there's nothing wrong with the belief that a house is a good investment. The problem comes in when you try to scale that to everyone's home purchase.
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I am going to have to disagree with you. If you are living in a house you should NOT look at it as an investment. Yes, it has worth and yes it could possibly appreciate in value (usually through investment in upgrades), but its primary purpose is to be used as a domecile. You are paying for it for that use. It isn't an investment. Now some people do make a business of buying and maintaining properties and houses which they rent out which is very reasonable, but the house you are living in shouldn't be viewed as an appreciating asset. That is a recipe for disaster (as we see and anyone who is eating crow for it right now deserves what they got). This whole housing crisis doesn't affect anyone who bought a house with the intention of living in it and using it for it's purpose.


Javaman said:
Hell, some people are walking away from their upside down house and using the tax credit to buy a new house. If both husband and wife aren't on the original mortgage, the other one can get a loan, take advantage of the tax credit and they both walk away from the original one, leaving 20+% for the banks/AIG to cover. Sure it'll mess up the original owner's credit for a couple of years, but why not buy the comparable house across the house for 1/2 the price of your own?
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That is very interesting. I have not heard about this happening much. I have heard plenty of times about couples being denied mortgage loans because one has a previous foreclosure, bad credit, or a bankruptcy.
 
Tideas said:
you disagree that most americans are ignorant and tend to believe everything that's sprout from mainstream TV without doing the research?

come on. you give us too much credit
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I don't think that is a problem limited to Americans...I think it's pretty much worldwide
 
Davidion said:
It's amazing how the rating companies went along with all of this shit, absolutely amazing.
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It's starting to feel like we're being manipulated. Something is afoot, Watson.
 
HamPster PamPster said:
I just wikied the CEO



WTF, one job isn't enough? If your company lost 62 billion in 3 months, you shouldn't have other responsibilities (no matter how small), in my opinion at least. 62 billion is ignore kids live at the office territory. AIG lost $27,600,000 during his last lunch break!
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All CEOs sit on each other's boards. That's how they've been able to increase their pay to astronomical levels. It's the classic case of "you scratch my back, I'll scratch yours".

The worst part is that everyone has excepted this. When smart people spoke out against pay inequity, they were labelled as being "socialists", which is somehow akin to being a genocidal dictator.

I say draw and quarter every single one of the rich fucks and corrupt politicians that did this to us (and by "us" I mean people in every country).
 
catfish said:
thats wow.

These stories of losses are getting silly now. Money is just a made up thing if the US can just THROW THIS MUCH CASH INTO A BLACK HOLE.
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this post made me laugh pretty hard

i just don't understand these companies anymore
 
BigGreenMat said:
That is very interesting. I have not heard about this happening much. I have heard plenty of times about couples being denied mortgage loans because one has a previous foreclosure, bad credit, or a bankruptcy.
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Whoops, "across the house" was supposed to ready "across the street". They way they do it is to get a loan before walking away from the original house. This of course assumes that the spouse makes a decent income. I'd love to see some statistics on how many people are doing it, but I haven't a clue where to look. I'm sure there's some shady night time infomercial crap out there showing people how to do it. Even though most people wouldn't be able to pull it off, it's a pretty sneaky way to "game" the system at the taxpayer's expense.
 
1235934773_resized.jpg






Thanks for the mountains of cash US Tax-payers, and the lucrative get out clause AIG!
 
the funny thing is sports leagues are going to get absolutely obliterated by this crisis and as i'm sure you know the premiership is no exception
 
Notorious A.I.G. comes back with a follow-up to the its hit debut album, awesome.

A.I.G. literally can't be allowed to fail. Defaulting on their default swaps would send those swaps' counterparties into a tailspin and force them to realize more losses, decapitalizing financial institutions literally overnight. Ever wanted to see the world's economy go into hypovolemic shock? Letting A.I.G. fail would probably do it.
 
Fragamemnon said:
A.I.G. literally can't be allowed to fail. Defaulting on their default swaps would send those swaps' counterparties into a tailspin and force them to realize more losses, decapitalizing financial institutions literally overnight. Ever wanted to see the world's economy go into hypovolemic shock? Letting A.I.G. fail would probably do it.
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I just picked up Civ 4 and all this talk of crashing world economies makes me want to go home and play it.

Is there a way to sabotage the entire world economy in that game and drive everyone back to the Feudal period?
 
SnakeswithLasers said:
I just picked up Civ 4 and all this talk of crashing world economies makes me want to go home and play it.

Is there a way to sabotage the entire world economy in that game and drive everyone back to the Feudal period?
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Sadly, no. :( Outside of the way that the tilesets and unit graphics change depending on tech levels, riflemen are still really cheap, even compared to macemen, and once rifles hit the field horse cavalry is obsolete due to rifleman vs. mounted bonus and high unit strength value. :(
 
Fuck it.

Just nationalise the shit out of AIG, Citi and Bank of America and a couple of others on the side. The UK should do the same with RBS & Lloyds-HBOS.

Criminal proceedings should follow as standard.

HSBC has gone through a year in the most horrendous market in modern history and still made £6.5bn ($9.3bn) before tax. They have policies and provisions in place that UNDERSTAND the nature of prudence. Every other UK bank is in strict violation of FSA Principle 4 on Prudence even if they followed the Capital Directive. The SEC doesn't use a Principles based approach so all kinds of horrendous shit happens on the other side of the pond. You need that shit to be changed.


Capital Adequacy and VaR was used as away to get away with murder. Rules based approaches fail. Principles based regulation should underly them.

First people to be shot in the face should be the mercenaries at S&P, Moody's and Fitch. Ratings don't mean SHIT. All it takes is an MD to get on the phone and cha-ching the rating is delivered.

String the fuckers up.

The whole business model is bullshit. Ratings should be conducted by an independent agency preferably an LLC funded by all regulated firms with a single subcription price, which is compulsory. This will fuck the conflict of interest in the ass. It is such a simple idea it annoys the shit out of me that it has never been implemented.

Who the fuck thought that FOR PROFIT organisations, getting another FOR PROFIT organisation to rate their instruments would not create a conflict of interest? Even an 8yr old would understand that something is not quite right there.

The biggest problem right now is that no one knows what the landscape is going to be like in the future regulatory environment. The system is broken. Huge change is needed and AIG can not go out of business, well it can in one way only - full nationalisation.
 
Fragamemnon said:
Sadly, no. :( Outside of the way that the tilesets and unit graphics change depending on tech levels, riflemen are still really cheap, even compared to macemen, and once rifles hit the field horse cavalry is obsolete due to rifleman vs. mounted bonus and high unit strength value. :(
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Damn, no credit-default-swap-bail-out-destruction for me.

Edit: For all the criminalization talk--isn't it unconstitutional to make something illegal and then charge people for a crime that was committed before the act was illegal?

I'm not saying I don't think these people should burn, I do, but realistically, can we charge them for a crime when the stuff they did was legal (based on the laws they had written... =/)?

Or am I misunderstanding here and what they did WAS illegal at the time...?
 
Tideas said:
what I want to know is, where is the government getting all of this billions to pour into AIG.
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We are borrowing it from ourselves. The government is basically writing a giant IOU to itself.

The scary thing is if you borrow too much then we will end up like so many failed 3rd world countries where a huge percentage of our debt is used to pay the interest from fucktard decisions from the generation before (like bailing out AIG).

Lets hope it works out because no one will win at the end of this one (except for the CEOs who already made their money and bailed on the companies they ran into the ground, I admit they win big).
 
These businesses run too close to the edge. One little hiccup in the Economy and they go bankrupt. I hope they learn their lesson. (probably not).
 
Good news everyone... no wait, the other thing.

_45526548_006930593-1.jpg


_45527423_dowjones_gr226.gif



http://news.bbc.co.uk/1/hi/business/7918168.stm

Stocks plunge on financial fears

Stock markets have fallen worldwide, rattled by fears that turmoil in the financial sector is far from over.

On Wall Street, the US Dow Jones index fell below 7,000 points for the first time since October 1997.

In the UK, the FTSE 100 index briefly hit a six-year low. Markets elsewhere in Europe also fell sharply.

Confidence was hit by a fresh $30bn bail-out of US insurance giant AIG following a record $62bn loss, and by HSBC's plans to raise £12.5bn.
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Thanks AIG
 
Windu said:
These businesses run too close to the edge. One little hiccup in the Economy and they go bankrupt. I hope they learn their lesson. (probably not).
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The people who run the companies are so wealthy that it doesn't faze them one bit. They could lose their jobs and still live comfortably for the rest of their decadent bourgeois lives.

Honestly, nothing is going to change until that entire top 1% of wealth holders faces physical violence or asset redistribution via massive taxation. They are just too insulated from the rest of the society for anything less to affect them.
 
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