RYou

This is the simplest explanation of what is going on the banking problems and why the government must bail out AIG and others.

http://www.newsweek.com/id/161199

On the surface, it sounds like they are only bailing out AIG and some other bankers, but read the fine print and where these Credit Default Swaps are currently being held - Pension funds. If the dominoes continue to fall, a lot of pension funds are going to take big hits. That's defined benefit pension if you have one. Your 401K could take an even a bigger hit than what you may have experienced if you are into mutual funds. The Fixed Equity funds which are supposed to be safe havens out of the market are largely comprised of securities issued by insurers and banks.

The numbers tossed around in the article are just outrageous, trillions.
AIG - their bailout is for up to $85 billion, but it holds over $440 BILLION in Credit Swaps.

Does anyone like it, No. Should those that particpated be allowed to out of business because of their participation, Sure. But this situation is SOOOOOOOOOO bad and there is so much potential for this issue to bust the GLOBAL economy, the US governemtn has no option but to try and stop the hemoraging.

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Ground&Pound

The scariest thing about the bailout is that the experts will only say it will PROBABLY work.

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LkwdSteve

The wolf that I'm hearing cried about is a dry up in available credit, which is basicallly portrayed as the lifeblood of our economy. Forget the part about purchasing on credit, which is bad enough, when I hear "Obtaining credit so a payroll can be met" that gets the attention.

Meanwhile foreclosures will continue. Also, many households are deeply in debt in multiple ways, and I can't imagine how this helps THAT problem.

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Bela Bartok was the greatest 20th century composer.

Throwby

It makes you wonder who is operating these business and what their idea of fiscal responsibility is. I worked for a company who operated by continually drawing on a line of credit. I understand that these things are sometimes needed but in this case it was just a case of almost unbelieveable levels of management incompetence that began right at the top. I can only hope that if this goes through it is the end and not the beginning of the problem.

M Richardson

http://www.latimes.com/business/la-f...0,562162.story

The House today rejected a $700-billion Wall Street bailout that would have been the biggest government intervention in the financial system since the Great Depression, sending the stock market into a sharp downturn and leaving President Bush's plan to bailout the economy in doubt.

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Race cars, not greyhounds!

ban basketball

Rats!

I clicked on this link expecting to see a recommendation for a great documentary film about a family of bail bondsmen (bailpersons, for those politically correct jerks like me), but instead it's a bunch of messy stuff about the economy!

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My ignore list: Cyclone85; skipster; tight-waist; Ignatius J. Reilly.

r.payton@att.net

If they have one executive walk away with a Golden Parachute then I will pray for armageddon -what ARROGANCE-to think one man is worth hundreds of millions of dollars while everone else's life savings are swallowed whole .

RYou

The last AIG CEO to be let go (2 weeks ago) rejected his $22,000,000 parachute. He was CEO for only 7 months and couldn't keep AIG out of the toilet. No, he wasn't the one that got them into the crapper either.

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19-0 ? Hell No ! 18 Wins and 1 GIANT Loss !

M Richardson

An interesting article from the NY Times - dated Sept 30, 1999! Some people saw this coming!

(These paragraphs are not the entire article - more or less a teaser to give an idea of what is said.)

http://query.nytimes.com/gst/fullpag...5AC0A96F958260


Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.


In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.



In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.


''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

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Race cars, not greyhounds!

ISU2008

Those who cannot remember the past are condemned to repeat it.

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I think all radical muslims should skateboard. After all, they are radical.