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ORIGINAL: 4u2spoil

Me: "I have a fantastic line of clothes worn by an emperor, how much is that worth?"

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ORIGINAL: 4u2spoil

The financial geniuses who we're counting on to fix things came up with a 5th type of financial product that somehow managed to combine a large amount of the risk, with no financial backing so that they could get around regulation. AIG essentially sold insurance on things that no one owned, that weren't backed by anything.

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ORIGINAL: popeye1250

Yeah, what I can't figure out is why would *Our Government* want to use *our taxdollars* to bail out a scam like A.I.G.
The only thing I can figure is that there are a lot of wealthy people with Lobbyists who don't want to become "not wealthy" when A.I.G. goes bankrupt like it should.
Those same people however don't think G.M. should be helped. G.M. actually makes things, what does A.I.G. make?
As a Taxpayer I don't want to be subsidising wealthy people.
And they try to sell us on the idea that,..."A.I.G. is "too big" to fail."
Padlock the fucking doors!
Send the U.S. Marshalls down and throw everyone out!
Why rob banks when you can put on a suit and "mine the Taxpayers" as the Lobbyists are fond of saying?
No business, scam like AIG, or even country is "too big to fail!"
I'd love to be in the supermarket someday and say to the bag boy; "Hey, didn't you used to be a Vice President for AIG?"

quote:

ORIGINAL: 4u2spoil

quote:

ORIGINAL: popeye1250

Yeah, what I can't figure out is why would *Our Government* want to use *our taxdollars* to bail out a scam like A.I.G.
The only thing I can figure is that there are a lot of wealthy people with Lobbyists who don't want to become "not wealthy" when A.I.G. goes bankrupt like it should.
Those same people however don't think G.M. should be helped. G.M. actually makes things, what does A.I.G. make?
As a Taxpayer I don't want to be subsidising wealthy people.
And they try to sell us on the idea that,..."A.I.G. is "too big" to fail."
Padlock the fucking doors!
Send the U.S. Marshalls down and throw everyone out!
Why rob banks when you can put on a suit and "mine the Taxpayers" as the Lobbyists are fond of saying?
No business, scam like AIG, or even country is "too big to fail!"
I'd love to be in the supermarket someday and say to the bag boy; "Hey, didn't you used to be a Vice President for AIG?"

I sort of see the reason for not letting AIG go under as a whole. Essentially, insurance is supposed to be one of those industries where the company has cash on hand to pay policies. If AIG goes under it's not just these wacky financial derivatives policy holders, but life insurance policy holders, financial institutions holding policies that ensure they're able to pay depositors if something happens. If they get a horde of people trying to cash in their policies and get out, a lot more comes crashing down.

They need to spinoff the division of AIG with these emperors new financial products and let it go under. Get it completely removed from the other parts of the business, and then they can send the guy to bag groceries without it causing policy holders to get buried under the fallout.

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ORIGINAL: 4u2spoil

My casino losses usually happen in the shops outside, but these days that still seems like a safer bet. And if we ever move away from gold and silver and go to a currency backed by shoes and bags I'll be worth billllllions (Said in a Dr. Evil voice)

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ORIGINAL: 4u2spoil

quote:

ORIGINAL: popeye1250

Yeah, what I can't figure out is why would *Our Government* want to use *our taxdollars* to bail out a scam like A.I.G.
The only thing I can figure is that there are a lot of wealthy people with Lobbyists who don't want to become "not wealthy" when A.I.G. goes bankrupt like it should.
Those same people however don't think G.M. should be helped. G.M. actually makes things, what does A.I.G. make?
As a Taxpayer I don't want to be subsidising wealthy people.
And they try to sell us on the idea that,..."A.I.G. is "too big" to fail."
Padlock the fucking doors!
Send the U.S. Marshalls down and throw everyone out!
Why rob banks when you can put on a suit and "mine the Taxpayers" as the Lobbyists are fond of saying?
No business, scam like AIG, or even country is "too big to fail!"
I'd love to be in the supermarket someday and say to the bag boy; "Hey, didn't you used to be a Vice President for AIG?"

I sort of see the reason for not letting AIG go under as a whole. Essentially, insurance is supposed to be one of those industries where the company has cash on hand to pay policies. If AIG goes under it's not just these wacky financial derivatives policy holders, but life insurance policy holders, financial institutions holding policies that ensure they're able to pay depositors if something happens. If they get a horde of people trying to cash in their policies and get out, a lot more comes crashing down.

They need to spinoff the division of AIG with these emperors new financial products and let it go under. Get it completely removed from the other parts of the business, and then they can send the guy to bag groceries without it causing policy holders to get buried under the fallout.

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ORIGINAL: popeye1250

4u, sure, they can pay off the policies as they come due but why should they allow the entity  AIG to continue?
Or the people who ran it to continue to make bundles full of money?
The market dislikes a vacuum, other cos. will step forward to do business.
These are people with college and uni degrees who want people to think that they're smarter than everyone else. They're not, they're fucking *stupid* and *incompetant!* They *DESERVE* to be bagging groceries!
They're "smart" in the fact that they pulled the wool over everyone's eyes for so long like Bernie Medoff.
If I owned a business and a guy with an MBA came in for a job I'd hand him a fucking MOP!!! And the *instructions* that go with it!
I swear, the more "degrees" a person has the more direct supervision they need as well as constant surveilance!
I don't want my taxdollars paying for $200k salaries for incompetants, theives, and jerks. What do they think that after they've been found out it's going to be "business as usual?"
President Obama needs to dish out some tough love and that means prison for bastards like these.
Raise MY taxes to build more hell-hole prisons for these "smart people!"
It wasn't "Joe the Plumber" who got us into this mess was it?

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ORIGINAL: MrRodgers

Well with gold and silver having little to do with currency (paper)...let me help set the record straight:

Banks are NOT required to have ALL of the money they hold 'on deposit' only a small percentage. If there is a big enough 'run' on said given bank, they are fucked and depositors are also fucked that is without a GOVT. RUN 'health' insurance program to rescue the borrowers...the bankers.

Insurance Cos. are NOT required to have ALL of the cash on hand to pay off ALL policies...only a small percentage. IF there are too many deaths, too much property damage, too many expensive auto accidents cause by their insured...they are fucked and many insurance companies have been bailed-out by state taxpayers with more socialism for the investor.

Casinos though are another interesting study in the obvious vacuousness of capitalism. They ARE required to have cash on hand to payoff winnings but because they own the govts. involved and never have pay off more than 30 cents on the dollar...the casino amonts to what it is...a license to steal and have never had to tap the taxpayers to payoff, although I am sure in a pinch...they too could be great rich socialists.

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ORIGINAL: 4u2spoil

quote:

ORIGINAL: popeye1250

4u, sure, they can pay off the policies as they come due but why should they allow the entity  AIG to continue?
Or the people who ran it to continue to make bundles full of money?
The market dislikes a vacuum, other cos. will step forward to do business.
These are people with college and uni degrees who want people to think that they're smarter than everyone else. They're not, they're fucking *stupid* and *incompetant!* They *DESERVE* to be bagging groceries!
They're "smart" in the fact that they pulled the wool over everyone's eyes for so long like Bernie Medoff.
If I owned a business and a guy with an MBA came in for a job I'd hand him a fucking MOP!!! And the *instructions* that go with it!
I swear, the more "degrees" a person has the more direct supervision they need as well as constant surveilance!
I don't want my taxdollars paying for $200k salaries for incompetants, theives, and jerks. What do they think that after they've been found out it's going to be "business as usual?"
President Obama needs to dish out some tough love and that means prison for bastards like these.
Raise MY taxes to build more hell-hole prisons for these "smart people!"
It wasn't "Joe the Plumber" who got us into this mess was it?

The way I see it is that AIG is a family. You've got your sensible grandmother, who probably sells things like life insurance and insures traditional things of value. There's a grandchild who insures things like movie productions, sports events and things that aren't traditionally valuable, but attached to something "real" nonetheless.  Then you've got that crazy uncle who's always drunk. Once in a while it sounds like he's having a lucid thought, but then he finishes it with some nonsense and you realize he's still only making sense in his own world. Throw the drunk uncle out, but don't shut down the family reunion because of one dipstick.

The problem is that this drunk uncle (the financial division) got so wasted that his stench is overpowering everyone else. There are people who probably make $35,000/year processing claims for auto insurance, or doing paperwork for policies related to an actress breaking her leg on set, or lots of things that aren't causing any problems. Unfortunately, as cagey noted, the scale of the mess created in the financial section is so big that it's pulling the entire company down. Which is why it would make sense to make that drunk uncle division (sticking with that comparison - these guys had to be on something to come up with these things) its own entity that could fail and die without taking down the entire family.

Now on the MBA thing I  agree with you on. On occasion I'd hear finance people talking shop, and I thought I just wasn't smart enough to understand. I realize that most of it is bullshit with a rose on top, and enough acronyms and industry terms to keep people believing that. The more useless the job, the less clear it is. If you can't explain what you do to a 12 year old, in terms they understand, your job is useless. I know everyone thinks education is the answer to everything, but some of the biggest idiots I've met/worked with have had advanced degrees with little talent or common sense to support it. In general, education is a good thing, but it shouldn't be the sole criteria for deciding if someone is capable for a job. That's a different post though - which I may start.

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ORIGINAL: popeye1250

Yeah, what I can't figure out is why would *Our Government* want to use *our taxdollars* to bail out a scam like A.I.G.

quote:

ORIGINAL: 4u2spoil
I can't speak for all countries, but in the US and I'm pretty sure the UK, you're protected to a certain limit. So yes, if you have $10 million in the bank, and the bank goes under, you're at risk of only recovering $100,000 or maybe $250,000 if the FDIC guarantee increase got through. But the first thing you see on any paperwork for investments that aren't traditional deposits, or are over a certain amount, is that they aren't Federally insured and may lose value. Even accepted products like IRAs. When I referred to being required to hold what they took in, I was referring to traditional products like a checking or savings account. There are many products offered by many banks that fall outside of that. All banks have to keep enough reserves to repay those people should they want to withdraw.

Insurance companies are required to pay. I think it was a Florida hurricane where Allstate had a huge loss, tried to fight the payouts but couldn't. I can't remember if they eventually moved out of the market, or jacked the rates up so high that no one could afford it, but for people holding policies before the hurricane, they had to pay. They didn't like it, and it meant not making a profit, but they had the money. People get dropped from insurance all the time, the policies get more complicated, they try to find reasons not to pay certainly, but they're legally required to keep enough to payout most policies.

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ORIGINAL: Cagey18

Thanks Phil Gramm!

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ORIGINAL: MrRodgers

True conservatism and even liberalism will tell you that 'too big to fail' is too big to exist.

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ORIGINAL: 4u2spoil

My casino losses usually happen in the shops outside, but these days that still seems like a safer bet. And if we ever move away from gold and silver and go to a currency backed by shoes and bags I'll be worth billllllions (Said in a Dr. Evil voice)