How come people are not raising red flags over the federal reserve takeover of AIG?
 

:thumbdown: this is just like it happened in the UK back when Wellington fought Napoleon, a private institution being taken over by the most corrupt, evil and lying motherscooters on earth, the federal reserve bankers (JP morgan, chase, Jensen, Rockefeller) a private bank that controls the fate of the US economy and political inclines, this can only be bad

nothing good will come out of this, except more power for the fed reserve and IRS, this could mean that they can now access your money more readily, AIG has lots of holdings in real estate (loans) and lots more in Retirement funds that are managed by AIG... in a sense they could now do a loan recall, just like they did in 1929 and actualy get to own the whole US economy as well as the monetary mint like they do now

WTF why is no one but Lou Dobbs actualy worried?

is the fluoride in the water dumbing people that much?

why are people so oblivious here? come on! wake up, they already tax you illegaly(income tax) and enforce laws that do not exist, why let them steam roll us into being their slaves now also?

I think I will go to another country after the elections, I mean can't let the Liberals win eh?

The federal reserve isn't taking over AIG, unless it has happened in the last 3-5hours. Thats when i last checked CNN's website(s).

They are planning to issue an 85B $ federal loan.

For a company which has assets in the trillion marque...

What worries me more then anything is that these misc. companies collapsing will lead toward the gov. taking over the financial instatutions in the coming century.

They're buying 80% stake in AIG. That's the word on the street.

I think it would be more worrying if financial institutions kept closing. I'm a fan of a free market economy, but the government has to take control in a crisis. Not sure it's reached that stage yet.

Mattk, you mean the govt. is supposed to nationalise debt?
AIG is a behemoth, that certainly would create huge ripples if it collapsed. So the govt. intervention with its $80b @ 8.5% above 3-month LIBOR is necessary, but expensive.

My main concern is that the US fed keeps nationalising debt. 11 banks this year, now AIG, how much more to go?

All I know is I'm making a killing in this down market. :mrgreen:

http://www.ft.com/cms/s/0/6ff9306c-8...077b07658.html

Russian Stocks crash 20%....

This is why I work in a R&D company.

Economically, a bad idea, but responsible government involves ensuring both economic and social stability. Nationalising debt seems to be a logical stabilising measure to ensure no massive depressions in the economy occur. If all these banks and NBFIs crash and burn, you'll have a large hole in the financial sector in terms of both economic and human capital.

you are right in the respect of the governement towards estabilizing the economy, HOWEVER and a huge one at at that, this is not the governement nationalizing debt we are talking about, this is the federal reserve bank taking over AIG... the federal reserve is a private bank and not part of the government, it is owned by Rockefeller, Jp Morgan, Chase, Jensen, Hannity and a few others which are secret to the public, they did this same maneuver right before the 1930's depression, the moment they were in control of a company they recalled loans and plunged the economy into chaos, the same thing I see coming now

The thing is.. It doesnt really stop the crash, only delays the inevitable and essentially turns our country into socialism.

AIG crashing would be bad. Proping them up for a year so we all crash even worse when they fail again since thy dont face the consequences of their actions.. much worse.

It's nice to be on the same team with you for once;-):-P
Well said, Sir.

Hasn't anyone learnt the lessons from the Japanese? I would have thought that the writing was on the wall...

Or what about when Andrew Mellon was Secretary of the U.S. Treasury in the late '20s. When Wall Street cracked in '29, Mellon had the solution: let it happen! Mellon was ready to let the chips fall wherever they might. ...Four years later, the road to recovery was being well travelled.

But didnt the Japanese have a strong asset base from which to recover... isnt the US pretty much one enormous overdue credit card?

Guys, I work at Morgan Stanley and have to deal with this nonsense every single minute of the work week. AIG is far too big for the government to let it fail. Its not only the US, its everywhere. AIG is huge in Europe and Asia and it would be way more costly than 85B if it failed. Much like Freddie and Fannie wouldve destroyed the economy had the gov not stepped in. Some might argue that in a capital system, some businesses are bound to fail and others to succeed, and this is true. The issue is that these are extraordinary times and the normal rules hardly apply. The past two days have been absolutely insane. Even companies that are economically sound are getting punished to the point of forcing their stock price down by 50%+ For gods sake, Goldman stock went down to 85 dollars today...that has never happened before, ever! Wachovia went up something like 55% in an hour.


If you have stocks, please stop freaking out. Fear is driving the market, not reason. There are definitely bargain opportunities out there, but be careful because there's too much volatility. If you buy something, hold on to your balls because its going to be a bumpy ride.

If anyone has questions or concerns let me know I'd be happy to help.

I accidentally a cocacola bottle. Is this bad?

1929, 1983, 1990 all come to mind.. Ever indeed.

Spoken like someone from the "inside" with a vested interest and a lot to lose if the rules are followed ;) - it is always the "extraordinary times" that seem to require the abandonment of the commonsense checks, balances and rules that lead directly to all the huge failures, collapses in human history that when analysed by following generations all turned otu to be avoidable and preventable had commonsense and established rules of engagement been observed.

This isn't a financial message board, and these topics take up way too much time to debate. I'll just say that I too work at a B/D 04RCSTI, but I respectfully disagree. Some of these companies and a-holes need a good caning.

It's funny that the U.S. pushes capitalism on the world and now our government is putting its citizens on the line, rescuing Wall Street and the Chinese. We're told it's to save the housing market and the economy. They were scrambling years ago to find affordable housing for the average Joe, well here we have a solution in front of our faces. Let things get back to the fundamentals instead of loaning money to people who could never afford it in the first place. Most of these Alt-A and subprime loans were based on fraud.

No, it seems both parties want to chain the American public to their loans, and make them slaves to their astronomical mortgages and the banks. Most of the politicians from both sides are lame. Too bad Ron Paul couldn't garner more support. That's one guy who "gets it". Let housing get affordable again, let the price-income ratio find some normalcy, and let financial institutions who made bad decisions go under. Rant over. Ciao.

Graywolf, I was talking specifically about Goldman's stock and the specific way in which it happened regarding mutual funds shorting the hell out of it and spiking their CDS's.

and RC, truly spoken like someone from the "outside." So you would rather just let the whole world economy crash? Or would you rather have to break the "rules" and bail out some companies that failed because of a completely irresponsible system that finally caught up to us? You think we like it? Nobody said it is fair, nobody said it was right. Its a last ditch effort to save an economy that is fundamentally fucked up. I don't like the situation any more than you do, but it had to be done for the good of everyone.

I don't have anything to lose either...but when you hear calls from people who are worried because their millions of dollars of savings are in limbo just because mutual funds are shorting the shit out of a company while they spread rumors and hike up the CDS's then you start noticing how crazy the situation we are in is. What I said is that desperate times call for desperate measures. You seem to think that I'm supporting the fed and their decisions or that I agree with it. What I disagree with is 25000 people losing their jobs in NY because the system and the "rules and checks and balances" that you speak of didnt work in the first place. The commonsense checks and balances were abandoned years ago when financials started collateralizing sub prime mortgages. It is exactly a lack of these checks and balances that have led us to where we are. Sadly EVERYONE else has to suffer for the irresponsible acts that blew the bubble. Now we are paying for it hard.

I'm not going to get into details here, its obviously politics and this is not the place to discuss.

Haha Mayer, you beat me to it, but more or less the same. I guess I should've been more specific with my first comment....

I definitely ABSOLUTELY agree that some of these companies DO deserve what they have coming to them, NO doubt about that. On the other hand we CANNOT allow the economy to go to shit any more than it has already. This past week has been insane. Sorry I'm just venting now haha.

I don't like bank rescues, or mamooth insurance company recues where many banks are insured.
But it's like those bitter medicines: if you don't take it, it'll be much worst.
Just think who loses more when a bank fails. Thousands of individuals lose much more than the well paid executives.

The last time I checked, mutual funds weren't allowed more then 30 percent in short funds. I think your pointing the finger at the wrong group. I also think you still don't get it. At this point it is too late to avoid the recession. You can take it like a man or delay the inevitable. This shit is comming one way or the other.

so let me get this straight, you are perfectly ok with Allan Greenspan and his set of evil bastards at the federal reserve bank gain control of one of the biggest financial institutions in the world?

Because that is what is gonna happen, they would gain controlling power on the AIG board with only 85B investment, in a company that is probably worth close to a (cue Dr Evil voice) "Trillion fricking dollars" doesn't it bring back memories of JP Morgan back in 1929?

The federal reserve bank is a private organization with the ability to print money out of nothing, they can obviously just print 85 billion without remorse, the moeny does not need any backing whatsoever, it is just worthless paper made under a promise that the US governement will pay it back, I have never been a fan of it since it locks the government into a never ending cycle of debt, which will only get bigger now with an extra 85 billion + interest, yes you know there will be interest to AIG, and they will never pay it, so Greenspan, Wolfowitz, Rockefeller, Jensen, Morgan and a few others will get richer and richer, what is next, Microsoft tanking and federal reserve take over? there is already a plan to take over GM...

We already blindly pay an illegal income tax that does not pay for any service tendered to us, it pays the FEDRES bankers

Oh just why the hell can't we have Ron Paul as president?

Some of the wise on Wall Street seem to not be fretting like some of you guys are.

One of the wall st. Billionaires I've had the pleasure of adding to my speed dial has said such things as "This is nothing like 1929. I had lunch with a trader who was there just yesterday"

Although, he also had some insite prior to all these Bailouts. "A company can only grow so big, at that point, the government will take it over. Eventually, every large company will either merge, or be absorbed into the government company"

This is the start of that in no small way. We are on an unstopable march into communism. Socialism is just a step along the path.

The natural way of these things happening has long been the best. Bankrupcy, and hostile takeover for pennies on the dollar; downsizing, then rebuilding; all while some new kid on the block takes advantage of the process.

People get hurt all the time in the market. We survived the last crash quite well; and I'd much rather go through it the "hard" way then killing the market we have long relied on to grow the economy.

BTW, one of the reasons why Ron didn't win the primaries is because of his followers are far crazier than he is. He is crazy, and his associates are crazy.

My guy didn't win the primaries either; but I wouldn't dare waste my vote.

10000rpmlover, its not about Greenspan taking over the world. This isnt a freaking conspiracy. The economy is kicking an screaming for liquidity and they are trying to infuse as much cash as they can.

Did I say ANYWHERE I was OK with it? In fact I said the opposite, I'm not ok with this. It's just a way of keeping the economy afloat.

Where did I say anything about percentages or anything. I'm not saying funds are directly responsible for whats going on. They were partly responsible for what happened to MS and GS stock today. The moment short selling rules changed, did you notice the flood of people trying to cover their assess today? Full disclosure of short selling and BAM stocks up 15% in a matter of half an hour.

I'm not pointing fingers at any SINGLE entity for whats going on in the market overall, I was giving an example of what I meant by the type of crazy shit that's going on these days. It might be too late to avoid a recession, but you must be insane if you're thinking that we should sit back and let it roll us over since "at this point its too late to avoid" it. You can take it like a man or delay the inevitable? That's the kind of bullshit that drove the market down 450 points yesterday. You should work for CNBC. It may be coming, but don't you think we should try and minimize the effects?

What makes today's problem much more difficult is the more globalised nature of these companies. Globalisation has been going on for half a millenium, but the world has never been so integrated in an economic sense.

Also, it is not as if the Federal Reserve is buying AIG. They are acting as a lender of last resort, a common role for such independent institutions and a role they are meant to play. Yes, it is run by people from the business sector, but it's not like they have anything to gain from it except a stable economy.

Breaking the rules wont chnge the fundmental laws that drives economies - it will, as has been said, just put off the inevitable.

BTW, when I said "spoken like someone from the inside" - it wasnt a compliment, some of you guys really have the same misguided enthusiasm and belief in "broken rules" that some of the "insiders" I got know who used to work for Enron.

Each one of them ended up falling and failing along with their house of cards - just because you "believe it will work" doesnt mean it will ;)

Hopefully you some simple assets to help you survive the coming years - things like a paid off house, zero balance credit cards nd a lifestyle that is easily trimmed to eastern european standards of comfort ;)

These same people have played a huge part in the current economic situation - what makes you think they will not fuck it up as they try "save" it?

^Well, saying 'let the market work it out' also relies on the business sector to fix itself. No real difference. The Federal Reserve was created to fix things up. Perhaps it's a good idea to let them do their job.

Maybe you guys can answer this question; Gray, i'm interested to hear your response in particular.

The U.S. dollar: It's continually strengthening across world markets, but why? Is there some sort of good news about the U.S. economy I've missed? Is the U.S. tax code suddenly more capital friendly? Are national levels of wages and household incomes rising? Is the labor force suddenly more focused on producing goods that the world wants to buy by the boatload? Are government expenditures suddenly under control? Really, where's the good news? For two months now the dollar has been strengthening.. I must be missing something.


Also, the U.S. government just seized Fannie and Freddie. Don't these firms count as major banks, what with their $5 trillion and more of liabilities? They're both too big to fail, yet too big to bail. Really does anyone have a spare $5 trillion lying around?
The US Fed, (Mattk) is socializing the financial side of the US housing market. That is a disastrous move, that doesn't stablise the markets. It gets everyone high, has a good trip for a few hours, then comes crashing down.

The business sector "fixing itself" is rather different to the federal reserve and other central banks interfering the way they have in the last 2 days. The one method is the market deciding the outcome and the other is kneejerk manipulations hoping to influence the market.

History (here we are again at history being an actual teacher ;)) has shown that markey manipulation attempts dont work.

I'm sure the last few days have made all sorts of headaches for you guys. For me, it's created some ridiculously good opportunities. When it doubles sell half? The moves have been too fast for that so it's been more of a when it quintuples sell a fifth kind of deal. But yea, it's been mad. (I trade options, not stocks btw)

currencies, like commodities, are traded only partially on reality. the rest of the price is made up by the perception of future reality by the players in the game. right now the dollar will continue to gain steadily, and perhaps far faster than expected, simply because the usa story is now less bad than the european or asian stories. the usa economy doesnt need to be great, and some of you have rightly pointed out that it is actually poor (i agree), but europe is just now dropping into the abyss, with far fewer tools or a plan to get itself back out. same story with japan and maybe china/india. add a few events like georgia, and gdp drop in germany france and italy, and pretty soon the dollar actually looks good - on a relative basis. but a relative basis is all forex ever is.

Bad loans all around are being covered by the Taxpayer now.

Does this mean people are going to move back into their foreclosed homes?

Does this mean that the bank still "owns" them, and when the homes sell, that will help pay off the Gov. loans?

Mutual funds already are required to have full disclosure of their short positions. Your confusing them with hedge funds.

Go read more on the deal.. In addition to the loan the federal reserve acquired an 80 percent stake in AIG as part of the terms


[quote]


Your showing you have little understanding of economics. Read some Friedman for crying out loud. Interfereing with the economy is a losing porposition. ITs going to go where it wants to go. Even more then that, by giving moeny you havent fixed the issues that caused AIG to crash. Which means more then likely.. Theyll crash again!

Wrong again.. No where in the federal reserves mission statement is to revive the economy. Their one.. and only.. appointed task is to guard against inflation. Thats all. The fact that they've forgot that has mostly caused the scale of this mess. Let the market work it out, means just that. Put in better regulations around the loop wholes.. And wait.

Nth hit the nail on the head:

While our economy is hurting, its actually still better off then everyone else. Investments go to safehavens in time of crisis. While US banks are in crisis, so is the rest of the world. US investments as a whole are still much safer then their european and asian counterparts.

Also as he stated the value of our currency is pegged to future expectations. The market expects us to turn it around.

We've had this exact same situation in Finland in the early '90's. Just wait and see what happens, it is not going to be nice.

The federal reserve is a private bank
Check this out
http://video.google.nl/videoplay?doc...ederal+reserve
:-):thumbup:

thank you for the phenomenon video, I think not many people actualy knew that the federal reserve is a private bank owned by the richest men in the united states, Allan Greenspan and Paul Wolfowitz being the ring leaders with Bastards like the Jensen family (JVC, RCA, Westinghouse) and the Bilderbergs comprising of Rockefellers, Morgan, Chase, Rothchilds, Ellis... these people basically own this country, they will never need to do anything except keep the system the way it is

I hate the federal reserve, I hate income tax and I hate the fact that no one would stand up to them and the IRS (which is not even a legal government agency, but a collection branch of the federal reserve)

call it conspiracy, call it what you want, just tell people about it, I have a friend who has never filed an income tax in his life, owns his own paint and body shop for the past 25 years and the IRS will never bother him again after he took them to court 10 years ago and won, I wish I could do the same

now back on topic, I watched Lou Dobbs Moneyline on TV today and he mentioned the FEDRES as instituting the next great depression and acting against the constitution, AIG will not be the only one, GM maybe next and quite frankly, it is over after that

PS- the fact that Brother Cavil hosts that show, will forever give me the creeps, He's a cylon I tell Ya!!

The new world wants to destroy the usa Economy

Greenspan takng over the world? He's not even the chairman anymore. Sure, he's part of the reason this whole mess came to being, but it's Helicopter Ben and Bazooka Paulson who are exacerabating the problem.

Ditto with nth and graywolf on why the dollar is rallying. Ditto on the responsibility and supposed mission of the Fed, graywolf. It's also funny how Fannie and Freddie are counter productive to their mission statement.

nth, I like Ron Paul but I'm not crazy, at least I don't think so. :-) :nurse:

79TA, congrats on the long puts (I'm assuming). I was about to do the same with some near-the-money puts on LEH, but chickened out. No guts, no glory. Still banging my head everyday. The options market should be interesting in the coming day. The spreads are getting absolutely HUGE like with WM. Talk about unintended side effects. ProShares ETF? Orders to create new shares have been halted, wonder how that one will play out.

You guys should be worried about this:

Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

http://calculatedrisk.blogspot.com/2...-proposal.html
http://www.nytimes.com/2008/09/21/bu...ss&oref=slogin

Yeah, you know what is so funny, that this has always proclaim to be the best market economy every and that minimal Government is always the best, because the markets will regulate themselves.

But guess what, now that the derivative markets (ABS, CDO, CDS) are all crashing, it is those exact same people that are asking for government bail out and help. It is those exact same people that are turning their backs on Friedman and Hayek.

That's what happens when you make bad investments, such as loaning money to people that have no ways or means of repaying. But it is okay since our socialist government is here. Just print more T-bills. Backed by the full faith and credit of the United States. <sarcasm> Sounds a like like Road to Serfdom to me.

Seriously, the Fed needs to focus on fighting inflation, that should be their only mission.

Making sweeping statements about Ron Paul supporters isn't accurate. But, there are plenty of crazies around and following him ;) :laugh:

http://www.bloomberg.com/apps/news?p...efer=worldwide

Pelosi and Kerry loose quite a bit of "their" company, AIG...

One has to wonder how many of these bastards sold before the insider bailout deals were struck - you KNOW there was insider info being shared and blatant illegal trades being made.

At the least the ron paul Paul supporters know stuff that matters

I told myself not to get into this discussion here at MotorWorld, but I had to make this post.

Just saw this on Calculated Risk this morning, you all should see this. It appears that us taxpayers are bailing out FOREIGN financial institutions as well!!! Seriously??? This is getting ridiculous. They're taking assets that was originated up to this month. Why are they taking assets as of this month when these banks should have known by now not to issue them any longer? ABSOLUTELY RIDICULOUS.
http://www.reuters.com/article/ousiv...48303920080921

Paragraph three:
http://www.treas.gov/press/releases/hp1150.htm

On top of that, check out this Lehman news. $2.5 billion bonus earmarked for "key" employees for running the company into the ground, while there is not money left to pay staff in its foreign operations. SERIOUSLY???
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance

Pretty amazing isnt it?

Even more scary I believe is the number of folks involved in this plan that stood to lose everything in these bad investments - but managed tyo run to their buddies in government and ask for the bailout not to save "the people" but simply to save themselves.

If this was about "saving the people" then the plan would have been more like a proposal to freeze all the mortgages at thier lower initial percentage rtes, and then use the government bailout money to subsidise the apparent losses that may have been realised by folks who bought the morgages from the original issuer.

I mean, "US mortgages" are being blamed for starting all this, so why not "fix" the root cause of the problem?

Well, if you only fix the root cause you dont get to play with all this new money - that's why.

In the end, this "bailout plan" does not put a single family back into their foreclosed home, all it does is keep the wealthiest and most powerful folks around the world in the driving seat. ;)

I think you american need to get rid of the private federal reserve bank

not gotten rid of... more something along the lines of what Economist Walter Williams says. "the Fed should be a computer algorithm that determines rates based on many factor which are already accounted for; IE inflation, unemployment, growth, etc. etc.