LET AIG DIE!
A brief introduction as previously reported by Paul Kiel for ProPublica:
As we’ve noted before [1], the main cause of AIG’s collapse was its credit-default swap portfolio. The swaps were essentially insurance contracts on securities, and for a fee, AIG guaranteed the security’s value. The problem: If the prices of the securities collapsed, AIG was on the hook. Because the portions of the securities that AIG guaranteed were judged to be almost risk free, not much thought [2] seems to have been given to that scenario.
There has been much said over our current economic recession, current administration’s handling of the previous administration’s hand, and the ever growing number of “bailout” and/or TARP money being apportioned out.
AIG has gone to the taxpayer well FOUR (4) times already for nearly $170 BILLION DOLLARS! Yet, as Brady Dennis of “The Washington Post” reports: AIG Warned of ‘Catastrophic’ Failure if they did not receive additional funding.
The collapse, for instance, would strain the global insurance industry, hurt the value of the dollar and damage money-market funds, AIG warned. The company’s failure, it added, would also erase taxpayers’ existing investment in the firm and foster “doubts about the ability of the U.S. to support its banking system.”
What the hell kind of mess do they think we are already in? Let them die. AIG mocks our government and spits in their face while we hand over more lunch money. As Josh Marshall of Talking Points Memo reports on the more than $100 million in employee bonuses that AIG will payout:
First, lest there be any confusion, we’re not talking about bonuses for executives at the conventional insurance providing divisions of AIG. We’re talking about $100 million in bonuses for executives at the company’s Financial Products division, the shop in London that wrote almost half a trillion dollars of credit default swaps (in effect, unfunded de facto insurance policies on wildly overvalued assets) — the ones that caused the company’s death spiral and put taxpayers on the line for what will likely eventually be a quarter trillion dollar price tag.
Again, look at the numbers. ProPublica has put together a chart of previous government bailouts (“History of U.S. Gov’t Bailouts“) and then another chart indicating how the Treasury was impacted (“What Happens After a U.S. Gov’t Bailout“) by the returns of their investments or LACK THEREOF.
Stop the bleeding. Take the Economy off the resuscitator and let us conceive another beginning. Hasn’t there been enough political fighting, corporate greed, private vs public debate of superiority, and lack of consequences for poor decisions that have impacted millions of people and billions of dollars?
These corporations that are getting bailouts have not kept any type of social interest or thought twice about the overall impact their risky behaviors would have on the common person. Why then is the common person taking the beating for their arrogant follies and injustices?
Other AIG related stories and references:
- The New York Times: I.G., Where Taxpayers’ Dollars Go to Die
- Fortune: Revealed: 15 AIG Bailout Counterparties
- Los Angeles Times: Why the World’s Biggest Insurance Company is Still Getting Taxpayer Funds