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

[Souldriver]

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).

Off course not. This is not how the system works. It's all about record profits and huge stockholder dividends, all with a short term view. Only look a year ahead in time, or even in quarters. And when it goes wrong the people responsible for the reckless business policies, bail the fuck out or get a bail out.

THAT's why I don't see a problem with at least some form of government oversight and control, to prevent the greedy market mechanisms to take off in full force and cause an unhealthy hausse, followed by an even unhealthier baisse. The problem is that when a crisis occurs, and people seem to have learned their lesson, after a few decades (when a new generation arises who never heard of or experienced a crisis) people/politics/... are stupid enough to just let anything run its course again, with no control whatsoever, until the next fuckup.

 

[Geeker]

I agree. Corporations are like water, you need regulation and governement to make sure the water ends up where you want it instead of flooding and destroying everything.

Does that make sense

 

[bionic77]

Off course not. This is not how the system works. It's all about record profits and huge stockholder dividends, all with a short term view. Only look a year ahead in time, or even in quarters. And when it goes wrong the people responsible for the reckless business policies, bail the fuck out or get a bail out.

THAT's why I don't see a problem with at least some form of government oversight and control, to prevent the greedy market mechanisms to take off in full force and cause an unhealthy hausse, followed by an even unhealthier baisse. The problem is that when a crisis occurs, and people seem to have learned their lesson, after a few decades (when a new generation arises who never heard of or experienced a crisis) people/politics/... are stupid enough to just let anything run its course again, with no control whatsoever, until the next fuckup.

I was just watching CNBC and I learned that it is very easy for the poors (as Astrolad terms it) to complain about the wealthy and elite taking a short term view in an all nothing chase for profits, but people don't realize how much a good private school costs these days. And nannys? Thanks to the Patriot Act they can't even get good illegal immigrant help anymore and the decent wages they pay to those women so that they don't have to raise their own kids really adds up!

So it is easy to say that the government should step in and regulate the greed but as I have learned from CNBC and the other financial analysts this is going to result in a lot of bad things to the Wall Street lower and middle class ($250-500k).

 

[xero273]

hmm we have DJIA below 7000. check.

now we need the S&P to drop below 700

 

[Souldriver]

I was just watching CNBC and I learned that it is very easy for the poors (as Astrolad terms it) to complain about the wealthy and elite taking a short term view in an all nothing chase for profits, but people don't realize how much a good private school costs these days. And nannys? Thanks to the Patriot Act they can't even get good illegal immigrant help anymore and the decent wages they pay to those women so that they don't have to raise their own kids really adds up!

So it is easy to say that the government should step in and regulate the greed but as I have learned from CNBC and the other financial analysts this is going to result in a lot of bad things to the Wall Street lower and middle class ($250-500k).

Won't somebody please think of the wealthy!!?!

 

[AstroLad]

The funny thing is that GAF is now calling for these CEOs's heads even though they're nothing more than victims of the economic climate and unscrupulous--and often fraudulent--borrowing, as mandated the Community Reinvestment Act that got us into this whole mess in the first place (a joke piece of legislation that I will note was rightly opposed by many of these CEOs).

But where was GAF when all these companies were making billions? Praising the CEOs? Helllll no. And guess what--despite all these losses, these companies still have made more money than they lost. So pinning the blame on the CEOs is revisionist history at it's worse.

GAF: Fair-weather fans until the end.

 

[shintoki]

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.

In a bit of defense, The original method was to get credit, you had to have credit. It was simple. There has been allot of government meddling and social changes to affect how credit is given out that are more in line with socialist then the original capitalist ideals.

But nothing will change, if American's get their inflated sense of buy now and pay later out of their stupid heads.

 

[Beer Monkey]

But where was GAF when all these companies were making billions?

Hanging out with the Republicans who are NOW concerned about deficit spending.

 

[Souldriver]

The funny thing is that GAF is now calling for these CEOs's heads even though they're nothing more than victims of the economic climate and unscrupulous--and often fraudulent--borrowing, as mandated the Community Reinvestment Act that got us into this whole mess in the first place (a joke piece of legislation that I will note was rightly opposed by many of these CEOs).

But where was GAF when all these companies were making billions? Praising the CEOs? Helllll no. And guess what--despite all these losses, these companies still have made more money than they lost. So pinning the blame on the CEOs is revisionist history at it's worse.

GAF: Fair-weather fans until the end.

I don't know if you're trying to rile things up, but I sort of agree. Off course there has to be something horribly wrong with your management, when you're able to bleed sixty two billion dollars in 3 months.

BUT you can't blame all this on the CEO's in general, as a group. Most of them did what they were told to do: record profits every year, no matter what. Bigger dividends every year, no matter what. Long term vision and strategy is not allowed since it doesn't instantly maximize profits.

So this whole system is to blame, not just the CEO's functioning in them.

 

[Pimpwerx]

I think GAF's hatred for these CEOs is that they ran these companies with the same level of fiscal irresponsibility that should not be fitting of someone who works in finance. Didn't banks/lenders write the guidelines many of us follow to keep our credit scores high? Why then should anyone feel pity for some rich sluts who sank an entire fleet of banks with seemingly amateurish hamfistedness? PEACE.

 

[bionic77]

The funny thing is that GAF is now calling for these CEOs's heads even though they're nothing more than victims of the economic climate and unscrupulous--and often fraudulent--borrowing, as mandated the Community Reinvestment Act that got us into this whole mess in the first place (a joke piece of legislation that I will note was rightly opposed by many of these CEOs).

But where was GAF when all these companies were making billions? Praising the CEOs? Helllll no. And guess what--despite all these losses, these companies still have made more money than they lost. So pinning the blame on the CEOs is revisionist history at it's worse.

GAF: Fair-weather fans until the end.

I thought you were going to go with blaming the middle and lower class for taking those juicy loans to buy houses they couldn't afford. When you think about it isn't it really their fault for trying to live above their means? The CEOs of these companies obviously couldn't resist the opportunity for higher profits from higher interest rates to the mongrels who wanted a home above their heads. I blame the average Joe though for not having the decency or the brains to resist those loans and continue to work and pay rent like the rest of us. As Lex Luthor has pointed out to us so many times before, there is only so much land and there isn't enough of it for everyone. Blaming the CEOs for the irresponsibility for the American middle class is like blaming the gun shop owners for the murder that happens every other day in a bad neighborhood or McDonalds for obesity epidemic. They were just trying to fill the demand.

But to answer your question as to where GAF was when this was happening. They were too busy looking at the sales numbers of PS3/Wii/360 to notice that the bubble was about to burst so they missed all the warning signs along with all of the world's experts.

 

[AstroLad]

I thought you were going to go with blaming the middle and lower class for taking those juicy loans to buy houses they couldn't afford. When you think about it isn't it really their fault for trying to live above their means?

Oh I definitely addressed that:

[CEOs were] nothing more than victims of the economic climate and unscrupulous--and often fraudulent--borrowing, as mandated the Community Reinvestment Act that got us into this whole mess in the first place (a joke piece of legislation that I will note was rightly opposed by many of these CEOs).

Blaming the CEOs would be like blaming someone for having there house robbed. But then again, I'm sure 90% of GAF would be in support of house robbery under the guise of "wealth redistribution to poor minorities." :lol

 

[Pimpwerx]

But to answer your question as to where GAF was when this was happening. They were too busy looking at the sales numbers of PS3/Wii/360 to notice that the bubble was about to burst so they missed all the warning signs along with all of the world's experts.

Not me. I think Miami is a perfect example of the bubble. The real estate expansion down here is evident in the skyline:

2005-2007

1998-2008

That's just the skyline. Property values were going through the roof everywhere down here, and still have 20-30% more to drop before they get to where they should be. I posted on here a lot over the years that there is no industry down here. There are no new business moving in. There's no new industry bringing in new money and creating any long-term growth here. So just who in the hell was supposed to be buy all of these properties?

Miami is gonna be America's Dubai. A playground for the rich and famous that might end up a ghost town. I see people continuing to move down here, but Miami is really just a half-step up from the rest of the South as far as having real commerce or industry. It's a bunch of transients and...well...idiots. It's not like out education system is doing us any favors.

But what I'm getting at is that a lot of us saw disaster approaching. That or some unforseen miracle. The evidence was/is all around us, I just think some were being really, really naive about it. The people at the top weren't being naive, they were gorging on the feast before things went tits up. PEACE.

 

[bionic77]

Oh I definitely addressed that:

Blaming the CEOs would be like blaming someone for having there house robbed. But then again, I'm sure 90% of GAF would be in support of house robbery under the guise of "wealth redistribution to poor minorities." :lol

Touche.

 

[AstroLad]

The New Yorker article on Florida--"The Ponzi State"--was great. Registration required for full-text unfortunately but a decent summary here:

New Yorker: Florida's is 'The Ponzi State'
The Feb. 9 & 16 issue of The New Yorker magazine features a scathing view of Florida's real estate bust gone wrong entitled, "The Ponzi State, Florida's Foreclosure Disaster," by Charles Packer.

Packer interviews CFO Alex Sink, Congresswoman Kathy Castor, Tampa Mayor Pam Iorio, all Democrats, dozens of real estate, banking and housing professionals and many of the unfortunate souls caught in the crosshairs of the crisis. He cites the in-depth series of articles by both the Miami Herald and the St. Petersburg Times that exposed the factors that contributed to the crisis and he tries to talk to Gov. Charlie Crist but "the governor's office did not respond to requests for comment.''

"This is one of the places where the financial crisis began,'' Packer writes, after vividly describing the ghost subdivisions surrounding Tampa Bay. "Florida has epitomized the boom-and-bust cycle of American business ever since a land rush in the nineteen-twenties ended with the devasting hurricane of 1926. The state’s economy depends almost entirely on growth – that is, on new arrivals and the wealthy the generated in construction and real estate."

The pivot quote of of the story comes from Gary Mormino, professor of history at the University of South Florida St. Petersburg: “Florida, in some way, resembles a modern Ponzi scheme. Everything is fine for me if a thousand newcomers come tomorrow. The problem is, except for a few roadbumps – ‘73, ’90, and they were really minor – no one knew what would happen if they stopped coming.”

The story is classic New Yorker: rich in anedotal detail and you-are-there description, way too long but a must read.

http://miamiherald.typepad.com/nake...f-the-new-yorker-magazine-the-ponzi-stat.html

 

[BlueTsunami]

Read Incognito's article... sounds like they were running the biggest business scam in the history of everything.

 

[Nerevar]

In a bit of defense, The original method was to get credit, you had to have credit. It was simple. There has been allot of government meddling and social changes to affect how credit is given out that are more in line with socialist then the original capitalist ideals.

I don't know whether to laugh or cry at the fact that this post was intended to be serious, and it came immediately after AstroLad's obviously sarcastic troll-bait bit. The "community reinvestment" bogeyman that conservatives have paraded out after the collapse of the housing market is the saddest attempt at blaming the government for the failures of a market economy I've ever seen. If you seriously believe this then you need to get help.

 

[Azih]

The worst thing we could do now is regulate. Government needs to get out of the way and let the free market prosper.

 

[ronito]

The worst thing we could do now is regulate. Government needs to get out of the way and let the free market prosper.

:lol

 

[kaching]

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.

That seems a fairly irresponsible way for a homeowner to look at such a purchase. Even when "just living" in a house, a lot of people will face the prospect that the house they own currently will not be their last. As their circumstances change, so too does the suitability of the home and anyone who is in such circumstance should not simply pay money into a mortgage to live there without some consideration of the return on their substantial investment as downpayment on the next.

The problem isn't in the expectation of some appreciation of home's value, the problem lies in the fact that too many people at all levels began to expect some seriously gross overvalued appreciation of these properties. It wasn't sustainable. But if someone doesn't buy into an overvalued property, does appropriate maintenance/upkeep and modernization over time, there's no reason why they shouldn't expect a modest appreciation in the right market conditions.

 

[bionic77]

The worst thing we could do now is regulate. Government needs to get out of the way and let the free market prosper.

Are you one of them fancy Harvard educated commentators from CNBC or MSNBC?

If you start dissing Obama's plan to start increasing taxes on people who earn more than $250k (because these people are clearly the ones we should be worried about most) I am going to believe that you are really Kramer.

 

[LiveFromKyoto]

If the guys running this company are making anything more than minimum wage they should probably be arrested.

 

[daw840]

If the guys running this company are making anything more than minimum wage they should probably be arrested.

Wow.....like they had so much control over the economy completely collapsing around them. If I recall correctly, and I may not so correct me if I am wrong, the mortgage industry is what set this collapse off. AIG is an insurance company, not the finance company. They are basically being completely fucked over because of the idiot finance companies and the idiot borrowers who got into mortgages they could never afford.

 

[Justin Bailey]

Wow.....like they had so much control over the economy completely collapsing around them. If I recall correctly, and I may not so correct me if I am wrong, the mortgage industry is what set this collapse off. AIG is an insurance company, not the finance company. They are basically being completely fucked over because of the idiot finance companies and the idiot borrowers who got into mortgages they could never afford.

Read the article on the first page. AIG pulled the same, stupid, risky moves the lenders did.

 

[mashoutposse]

That seems a fairly irresponsible way for a homeowner to look at such a purchase. Even when "just living" in a house, a lot of people will face the prospect that the house they own currently will not be their last. As their circumstances change, so too does the suitability of the home and anyone who is in such circumstance should not simply pay money into a mortgage to live there without some consideration of the return on their substantial investment as downpayment on the next.

BigGreenMat's concept that homebuyers should not look at their purchases as investments makes sense. It may be the most responsible way to approach things. For most, "investment" means "potential for appreciation in value." As a homebuyer, your baseline expectation for your "return" should be the utility of the home + equity (total payments paid against principal). There need be no appreciation in home value for the down payment situation to take care of itself as the down payment is simply that "substantial investment" minus fees and interest.

 

[xnipx]

are you people defending the AIG CEOs ignoring the part of the article where it says they didn't have the money to pay out the insurance in the first place? sounds like bad management to me....

 

[Taichu]

Why aren't these CEOs being sent to prison?

If I scammed someone out of 5,000 dollars and was caught, I'd be trouble. Yet these people are able to pull the biggest financial scam ever and when it blows up in their face, they get BILLIONS of free money, over and over.

 

[mashoutposse]

Wow.....like they had so much control over the economy completely collapsing around them. If I recall correctly, and I may not so correct me if I am wrong, the mortgage industry is what set this collapse off. AIG is an insurance company, not the finance company. They are basically being completely fucked over because of the idiot finance companies and the idiot borrowers who got into mortgages they could never afford.

It is not the borrowers' responsibility to look after assets under the management of lending institutions. Time to stop blaming them.

Lenders figured out how to shift risk onto companies like AIG and companies like AIG figured out how to make billions taking that risk on without having to comply with insurance industry regulations. Once these two groups had their lightbulb moment, only then were the little people invited to the party en masse.

 

[mashoutposse]

Why aren't these CEOs being sent to prison?

If I scammed someone out of 5,000 dollars and was caught, I'd be trouble. Yet these people are able to pull the biggest financial scam ever and when it blows up in their face, they get BILLIONS of free money, over and over.

That's because, in reality, the services provided by firms like AIG were perfectly legal and rather valuable -- insurance. There is nothing inherently wrong with a credit default swap or any of the other insurance products they dreamt up. Their mistakes were that they significantly undercharged for the service and were significantly unprepared to actually fulfill the service in a worst (or even just 'bad') case scenario.

 

[WrathOfOtaibah]

The funny thing is that GAF is now calling for these CEOs's heads even though they're nothing more than victims of the economic climate and unscrupulous--and often fraudulent--borrowing, as mandated the Community Reinvestment Act that got us into this whole mess in the first place (a joke piece of legislation that I will note was rightly opposed by many of these CEOs).

But where was GAF when all these companies were making billions? Praising the CEOs? Helllll no. And guess what--despite all these losses, these companies still have made more money than they lost. So pinning the blame on the CEOs is revisionist history at it's worse.

GAF: Fair-weather fans until the end.

This is your best yet. Congrats.

 

[Taichu]

That's because, in reality, the services provided by firms like AIG were perfectly legal and rather valuable -- insurance. There is nothing inherently wrong with a credit default swap or any of the other insurance products they dreamt up. Their mistakes were that they significantly undercharged for the service and were significantly unprepared to actually fulfill the service in a worst (or even just 'bad') case scenario.

They had nothing to back up their claims. That cannot be legal.

 

[StopMakingSense]

They had nothing to back up their claims. That cannot be legal.

See. They didn't call it insurance. They called it a swap. These swaps were completely unregulated, and had no balance requirements.

 

[daw840]

They had nothing to back up their claims. That cannot be legal.

Wait just a second. I don't pretend to know a whole lot about this entire thing, I have a degree in Tech for Christ sake. Would it be the same as if nearly everyone who has Geico auto insurance totaled their car all at the same time? I don't believe that Geico could pay for that either.

 

[Justin Bailey]

Wait just a second. I don't pretend to know a whole lot about this entire thing, I have a degree in Tech for Christ sake. Would it be the same as if nearly everyone who has Geico auto insurance totaled their car all at the same time? I don't believe that Geico could pay for that either.

Read. The. Article.

 

[StopMakingSense]

Wait just a second. I don't pretend to know a whole lot about this entire thing, I have a degree in Tech for Christ sake. Would it be the same as if nearly everyone who has Geico auto insurance totaled their car all at the same time? I don't believe that Geico could pay for that either.

Insurance is regulated, and companies have to have a reserve set aside to cover their policies by law.

 

[daw840]

Read. The. Article.

Stop. Being. A. Douche.

I did read the article and I will admit I am a little confused. I don't see how that article in the OP answers my question. I understand the concept of reserves, but AFAIK the insurance companies don't have to have the entire value of the vehicle/home for every one of their insureds on hand at all times. Like I have said before, I was just looking for some clarification because I don't really know a whole lot about this subject. If you added up the market value of every car in any given insurance companies book of policies I would be willing to bet no insurance company has that much money just sitting somewhere if every one of there cars was totaled all at once. That is what it looks like to me is happening with AIG. I could be wrong, and admittedly I probably am. I bow to you Justin for your overwhelming economic prowess, and ability to comprehend this article The good lord blessed you with that but apparently cursed you with the inability to see when someone who is not as learned as you is actually trying to ascertain what is happening in the world right now.

 

[loosus]

You mean they're coming back every few months for more money? You mean, they're not really propped up by the money, after all?

Wow, that sure sounds familiar. Oh yeah, level-headed people said that would happen nearly six months ago. Imagine that.

I hope all you dumbasses who were who shitting yourselves at the very prospect of a large company going bankrupt feel vindicated.

 

[StopMakingSense]

That is what it looks like to me is happening with AIG.

No, AIG had no reserve requirements and did not keep a reserve for these swaps.

 

[Kevtones]

AIG is really making a name for themselves.

 

[Justin Bailey]

Stop. Being. A. Douche.

I did read the article and I will admit I am a little confused. I don't see how that article in the OP answers my question. I understand the concept of reserves, but AFAIK the insurance companies don't have to have the entire value of the vehicle/home for every one of their insureds on hand at all times. Like I have said before, I was just looking for some clarification because I don't really know a whole lot about this subject. If you added up the market value of every car in any given insurance companies book of policies I would be willing to bet no insurance company has that much money just sitting somewhere if every one of there cars was totaled all at once. That is what it looks like to me is happening with AIG. I could be wrong, and admittedly I probably am. I bow to you Justin for your overwhelming economic prowess, and ability to comprehend this article The good lord blessed you with that but apparently cursed you with the inability to see when someone who is not as learned as you is actually trying to ascertain what is happening in the world right now.

I'm talking about the ny times article posted on the 1st page: http://www.nytimes.com/2009/02/28/business/28nocera.html?_r=1&pagewanted=all

When you ignore responses people make and ask questions that have been answered by them, it's only natural to assume you simply didn't follow the advice. But anyway, AIG didn't keep any capital reserves because they didn't have to, because there was no regulation forcing them to. That was the dumb, risky move that AIG made, and the one that put them in the situation they're in today.

Why would Wall Street and the banks go for this? Because it shifted the risk of default from themselves to A.I.G., and the AAA rating made the securities much easier to market. What was in it for A.I.G.? Lucrative fees, naturally. But it also saw the fees as risk-free money; surely it would never have to actually pay up. Like everyone else on Wall Street, A.I.G. operated on the belief that the underlying assets — housing — could only go up in price.

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.

 

[Crayon Shinchan]

I'm talking about the ny times article posted on the 1st page: http://www.nytimes.com/2009/02/28/business/28nocera.html?_r=1&pagewanted=all

When you ignore responses people make and ask questions that have been answered by them, it's only natural to assume you simply didn't follow the advice. But anyway, AIG didn't keep any capital reserves because they didn't have to, because there was no regulation forcing them to. That was the dumb, risky move that AIG made, and the one that put them in the situation they're in today.

Moreover, they significantly undervalued the risk of the insurances they sold, and as such didn't price them appropriately; meaning that far more people bought them than should've.

 

[Justin Bailey]

Moreover, they significantly undervalued the risk of the insurances they sold, and as such didn't price them appropriately; meaning that far more people bought them than should've.

Yes, yes, saying "the one move" is simplifying too much. There was a lot of stupid going on.

 

[Azih]

See. They didn't call it insurance. They called it a swap. These swaps were completely unregulated, and had no balance requirements.

Just like unlawful enemy combatants aren't covered by the Geneva convention and we can do whatever the hell we want with them neither are swaps covered by insurance laws. This is freedom folks.

Hell AIG wouldn't be a AAA rated company if the market hadn't judged them as such and so their using their market earned good name to turn risky sub prime mortgage backed securities into extremely secure AAA investments through swaps is a miracle of the market. That the swaps were bought by so many financial institutions worldwide is a testament to their success. They wouldn't be bought if they weren't great. That's the genius of the market.

 

[mashoutposse]

Moreover, they significantly undervalued the risk of the insurances they sold, and as such didn't price them appropriately; meaning that far more people bought them than should've.

Exactly; nail on the head. The heart of the problem was way too cheap and way too easy access to AAA-rated insurance. Correct pricing would have short-circuited demand and taken the sheen off of subprime mortgages way before things had gotten out of hand.

Just like unlawful enemy combatants aren't covered by the Geneva convention and we can do whatever the hell we want with them neither are swaps covered by insurance laws. This is freedom folks.

Hell AIG wouldn't be a AAA rated company if the market hadn't judged them as such and so their using their market earned good name to turn risky sub prime mortgage backed securities into extremely secure AAA investments through swaps is a miracle of the market. That the swaps were bought by so many financial institutions worldwide is a testament to their success. They wouldn't be bought if they weren't great. That's the genius of the market.

:lol AstroLad-caliber.

 

[Zero Hero]

Isn't anyone slightly interested in wondering how Phil Graham would have handled the situation if McCain won?

Spoiler

But then again, they knew they wouldn't win

 

[StopMakingSense]

Hey guys, remember who's really at fault here. those pesky irresponsible borrowers.

 

[Justin Bailey]

Exactly; nail on the head. The heart of the problem was way too cheap and way too easy access to AAA-rated insurance. Correct pricing would have short-circuited demand and taken the sheen off of subprime mortgages way before things had gotten out of hand.

You could also look at it this way: if they had been forced to keep some capital in reserve for each swap, this "cost" would have been reflected in the price, making it higher and forcing AIG to be more selective about what securities they insure.

This is where government regulation can prevent things like this from happening.

 

[mAcOdIn]

Wall Street is nothing but one get richer scheme after another anyways, I think the financial makeup of the world needs to be reset for the good of the future. Of course they don't want that to stop, it's their business, they've done it for years, they know how it works and it makes them money. I think we should take the hit, plunge into depression for a decade or so and start over. That's my personal view.

I'm also furious with our government suggesting that we engage in even more reckless behavior, by buying more stuff on credit, to save this rat infested trash barge. You know the government is not looking out for you when they frown upon you paying down a debt with a "tax rebate." Fuck you both Bush and Obama.

I understand that probably everyone on this board had nothing what so ever to do with that shit and doesn't understand why they need to suffer and believe we should save this economy for their sake. I see your argument, but if we do not allow it to completely collapse it will stay relatively intact, and we'll look at this shit again in another 70 years. The rich still have enough money to start up this shit again, they need to be brought down to our level and the government will not have the balls to do it if the economy is saved. Hard reset on the world right now for the sake of all that will come after us.

 

[KHarvey16]

Sorry guys, the quota for uninformed opinions has been reached today. No more room .

 

[Zero Hero]

Banks can create money, but they are out of money?

Or is the money created now in line with the debt created?