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Thursday, September 18, 2008

AIG, Too Big To Fail?

I'm surprised that so many Democrats are saying they are against the government bailout of AIG. I thought Democrats - especially the Insane Liberal Clown Posse - advocate for the government takeover of private businesses. The ILCP has no problem with the government seizing control of oil, gas and energy companies. So what's the problem with the government owning an insurance company?

Any Liberals and Progressives want to weigh in on this? Go ahead Libs, crawl out from under the dirt from under the rock and add a comment. If you date.

U.S. Senator from North Dakoter Kent Conrad - a Democrat - speaking about the AIG bailout said, "we have to do it." He said this on Wednesday's Liberal Talk Radio program of Big, Fat, Drunken, Drunken Dog-Killing, Wife-Beating Ed Schultz's Show. So it must be true.

©2008

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Comments:
This comment has been removed by a blog administrator.
 
KoMedia - your comment has been deleted because the link to your site - at your site - appears to be harboring a virus. I won't be publishing anymore of your comments. Nothing personal, but your site appears to have viru.
 
I was a financial services professional worked in brokerage (back-office), and for an insurance corporation in treasury ops, dealing with securities and custodial issues, before moving over to the actuarial side. I've actually had dealings with AIG (it would have been impossible not to).

This is just my opinion, not necessarily representative of the industry as a whole.

My first problem with the bailout is the continuing devaluation of the dollar, which leaves us vulnerable to the imposition of another, possibly multinational currency. The fact that many AIG treaties are international just adds the icing to the cake, because it brings thorny (and expensive) legal issues that the gubmint will be financially responsible for, even if only for the duration of the bailout.

The second is the issue of "a lesson unlearned". I am among those who favor particular regulations, especially those that pertain directly to co-ownership of banks and insurance companies, statutory regs, and demutualization aspects that I consider to have been detrimental to the industry as a whole (it's not as exciting as the the short selling/uptick debate, but there's big money, as well).

I take the position that I'd rather be America, dealing with the Asian markets, then Argentina, battling the same. Insurance requirements, versus those the SEC would require from financial institutions, investment banks, etc., roll at an excruciatingly slow rate, and the groundwork for ensuring the repeating the entire debacle the same way has not been laid, and cannot, without a diligent and responsive Congress (cough) and the same bad management teams' business strategies, you wind up with a piggyback effect which would be too much of a threat to national security, from a treasury perspective.

Lastly, I'm uncomfortable with the government intervention because of the precedent it sets (or, rather, re-establishes)... The quick fix guarantees that the corruption as well as the corporate malfeasance will never be rooted out.

IMHO, it's also inconsistent with the overall "free trade" meme that's been adhered to. I'm opposed to socialism, but laissez-faire capitalism is hardly better, in hindsight. The key really comes down to, how can we reconcile, as they say, privatizing the gains while socializing the losses when any rational man's confidence in the Fed itself has to have been shaken?

We really do need more details, and more "meat" on the details themselves, but, all in all, I'm skeptical, not because I don't think it's going to "save" these companies from imminent ruin, but that it's only postponing the inevitable, for AIG isn't even as strong as the pundits think it is.
 
Hash,

Good take. I'm with ya on what you wrote.

The post was (I know you "got it" cuz you're a sharp guy) tongue-in-cheek ala the Left loving it when the govt takes control of private businesses.

I'd rather be America, dealing with the Asian markets, then Argentina, battling the same.

Absolutely.

I'm opposed to socialism, but laissez-faire capitalism is hardly better

And another Absolutely.

Anyone in DC elected (ie Congress) for any length of time had to know this damn was about to bust and they didn't fucking do anything about it, they put band-aids on severed limbs and just kept putting off the inevitable, and that really pisses me off. And both R's & D's are responsible to some degree or another.

Dang it Hash, I said this before and I'll say it again, you write damn well. You should be blogging.
 
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