If they don't get the loan, they are bankrupted. It is a bail out. And if they can't pay it back, whose money is at risK? The taxpayers. Were the taxpayers consulted before this loan was agreed upon? Maybe they'de prefer to do something else with the money This is a clear case of privatized profit, socialized debt, do you support this practice? .
On Sep 17, 1:36 pm, VT Sean Lewis <[EMAIL PROTECTED]> wrote: > A bridge loan is not a bail out. > > On Sep 16, 11:25 pm, Frank <[EMAIL PROTECTED]> wrote: > > > $107b rescue for AIG > > > * September 17, 2008 - 1:01PM > > > In a bid to save financial markets and the economy from further > > turmoil, the US government agreed today to provide a $US85 billion > > ($107 billion) emergency loan to rescue the giant insurer AIG. > > > The Federal Reserve said in a statement it determined that a > > disorderly failure of AIG could hurt the already delicate financial > > markets and the economy. > > > It also could ''lead to substantially higher borrowing costs, reduced > > household wealth and materially weaker economic performance'', the Fed > > said. > > > ''The president (George W Bush) supports the agreement announced this > > evening by the Federal Reserve,'' said White House spokesman Tony > > Fratto. > > > ''These steps are taken in the interest of promoting stability in > > financial markets and limiting damage to the broader economy.'' > > > Treasury Secretary Henry Paulson said the administration was working > > closely with the Fed, the Securities and Exchange Commission and other > > government regulators to ''enhance the stability and orderliness of > > our financial markets and minimise the disruption to our economy.'' > > > ''I support the steps taken by the Federal Reserve tonight to assist > > AIG in continuing to meet its obligations, mitigate broader > > disruptions and at the same time protect taxpayers,'' Paulson said in > > a statement. > > > The Fed said in return for the loan, the government will receive a > > 79.9% equity stake in AIG. > > > Earlier, Fed chairman Bernanke and Paulson met with Senate Banking > > Committee Chairman Senator Christopher Dodd, Senate Majority Leader > > Harry Reid and House Republican leader John Boehner to brief them on > > the government's options. > > > ''At the administration's request, I met this evening with Treasury > > Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. > > They expressed the administration's views on the deepening economic > > turmoil and shared with us their latest proposals regarding AIG,'' > > Reid told reporters. > > > ''The Treasury and the Fed have promised to provide more details in > > the near future, which I believe must address the broader, underlying > > structural issues in the financial markets.'' > > > Shares of the insurance company swung violently yesterday as rumours > > of potential deals involving the government or private parties emerged > > and were dashed. Its shares closed down 20% at the end of the day - > > and another 45% after hours. Still, no deal emerged. > > > The problems at AIG stemmed from its insurance of mortgage-backed > > securities and other risky debt against default. If AIG could not make > > good on its promise to pay back soured debt, investors feared the > > consequences would pose a greater threat to the US financial system > > than this week's collapse of the investment bank Lehman Brothers. > > > The worries were triggered after Moody's Investor Service and Standard > > and Poor's lowered AIG's credit ratings, forcing AIG to seek more > > money for collateral against its insurance contracts. Without that > > money, AIG would have defaulted on its obligations and the buyers of > > its insurance - such as banks and other financial companies - would > > have found themselves without protection against losses on the debt > > they hold. > > > ''It might not just bring down other financial institutions in the US. > > It could bring down overseas financial institutions,'' said Timothy > > Canova, a professor of international economic law at Chapman > > University School of Law. ''If Lehman Brother's failure could help > > trigger AIG's going down, who knows who AIG's failure could trigger > > next.'' > > > New York-based AIG operates insurance and financial services > > businesses ranging from property, casualty, auto and life insurance to > > annuity and investment services. Those traditional insurance > > operations are considered healthy and the National Association of > > Insurance Commissioners said ''they are solvent and have the > > capability to pay claims''. --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more. -~----------~----~----~----~------~----~------~--~---
