>What do you think would happen if they did not step in? It would not be pretty, but we have become a nation that rewards failure and punishes success by making the taxpayer pay for failures. You have to keep in mind that this situation was precipitated by the opinion of a rating company... rightly or wrongly... determining that the credit of AIG was not as good as they had thought earlier. The ability to pay did not change, just the opinion of the prospects of paying... which increased equity requirements and probably interest rates.
AIG was not without assets and it is unlikely that everything would have gone away. What has happened is that the CEO that screwed up will continue to get his inflated paycheck. Personally, if you overextend yourself... you loose, but if a company like AIG, etc. overextends itself, we all loose, but if they make a profit we get nothing. Something seems kind of unfair about that... privatizing the profits and socializing the losses. If AIG were managing assets, the assets are still client assets, unless there was some sort of fraudulent conversion, so the customer would loose nothing except maybe a little sleep. If they can't meet their insurance obligations, it would behoove the insured to switch carriers. Sure there is inconvenience, but not the major meltdown you fear. The problem of not letting companies fail is that no one ever learns the lessons that can be found in the failure. Beyond this, while rating agencies are useful, their opinions should be advisory, not absolute. If the company is still basically solid, there is no reason a bankruptcy court (if necessary) could not help them work out an arrangement with their nervous creditors. On the other hand, if you had some reasonable business persons (how's that for pc?) they could probably work out arrangements without going through a court. It's called restructuring debt. -- Larry Miller --- StripMime Report -- processed MIME parts --- multipart/mixed text/plain (text body -- kept) message/rfc822 --- _______________________________________________ Post Messages to: ProFox@leafe.com Subscription Maintenance: http://leafe.com/mailman/listinfo/profox OT-free version of this list: http://leafe.com/mailman/listinfo/profoxtech Searchable Archive: http://leafe.com/archives/search/profox This message: http://leafe.com/archives/byMID/profox/[EMAIL PROTECTED] ** All postings, unless explicitly stated otherwise, are the opinions of the author, and do not constitute legal or medical advice. This statement is added to the messages for those lawyers who are too stupid to see the obvious.
