AIG lives

[Nachtläufer]

Just been watching on the news this morning, and so many mixed opinions on this issue.

AIG Bail Out (http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20080917&id=9147170)

whats youer take of this? Im not entirely into politics, but i know know enough that. A. you can spend 300 billion and month on war, and B. survive an economical depression back home. 2 and 2 just dont add up and support each other.

[MOMO]

government bailing out big businesses...

*sigh*.

[JScullin]

Don't worry, this is all part of the "trickle down" approach to the economy. Government gives big tax breaks to businesses so they can pay you more and give you better benefits so you go out & buy material items to support the economy! They would never keep the money for themselves and put it towards ridiculous bonuses and poor investments...

oh wait.

[jaged]

im so glad my school system switched over to AIG a couple years back, eventhough the company we were with was just fine, which is still doing fine :banghead:

[LinkMan]

And the privatization of profits, socialization of losses continues... :(

[skater]

It's a rock and a hard place - if you don't bail them, the damage to the economy could be far worse once the dust has settled. If you do, you're bailing out a company that is having trouble competing.

[JScullin]

Then I'm sure Ford & GM are chomping at the bit for their turn.

[skater]

Then I'm sure Ford & GM are chomping at the bit for their turn.

Yeah. The CEO of Toyota said a couple years ago that he was certain the federal government would bail the US automakers if they got into serious trouble. Now there's a guy that understands the US.

The problem is that if GM or Ford were to close shop or even severely cut back production, it's not hard to understand the ripple effects throughout the economy we'd see - all of the industries that go into cars (plastic, metal, glass, rubber, fabric, transportation, etc.) would be hurt, which would in turn hurt further industries. Who knows where it would end?

[JScullin]

It's the UAW that's killing U.S. automakers the most (among other things). Something like $3-4,000 of the price of every car goes towards union members benefits. And you see the quality of American cars put out...it's not exactly top notch.

[SlowCat]

It's the UAW that's killing U.S. automakers the most (among other things). Something like $3-4,000 of the price of every car goes towards union members benefits. And you see the quality of American cars put out...it's not exactly top notch.

That's not including the $1500 per car GM spends on retirement health care. Unions had their place, but currently most are mismanaged, and hurt the companies while helping the workers that seem to deserve it the least. Get fire for incompetence on the job & most unions will fight to get you your job back :banghead:

Imagine if GM could drop all car prices by $2000-$3000 and still make more money off each car while keeping the same take home pay & benefits for workers. I worked someplace that went from union to non union, and in most cases us non union workers had better benefits, higher pay, and according to the company cost them 1/3 per employee. :crazy:

[BigBalledOX]

government bailing out big businesses...

*sigh*.

So . . . socializing failing businesses that have ****ed themselves over is ok, but socializing healthcare isn't? Yeah, that makes sense. :rolleyes:

[SlowCat]

As for AIG, their reach is far & wide, across many countries & into many industries. But bailing them out could cause more harm than good. It will probably weaken the already poor American dollar, I think of it this way, we keep trading short horrible collapses in the economy for long term slower declines. This is much more far reaching than just AIG, most of the banking industry screwed themselves, very few banks were able to avoid multi billion dollar writes offs and several have already closed their doors.

Which is better ?
Keep as much up front & let it slowly fall apart?
OR
Let it fall apart horribly now & then start rebuilding?

Personally I'd rather get the hard part over and not give billion dollar bail outs to cover all of the debts these companies have accumulated, the quicker it's over the quicker the economy can rebound. Though I do understand that it isn't the view of most people, they would rather soften and extend the mess for as long as possible, and even though I understand many of the reasons I don't agree.

Either way we are screwed, all we can change is how screwed, and for how long.

[Blackcoog]

Damnit when will my 401k ever get a break? Mine's been sucking it up over this year and I'm sure the last few days will make it much worse.

[skater]

Damnit when will my 401k ever get a break? Mine's been sucking it up over this year and I'm sure the last few days will make it much worse.

A while back, I moved parts of my TSP (similar to a 401k but for gov't employees) to the safer government securities fund from the common stock fund. Which actually contributed to the problem, of course, but, hey...I'd like to retire someday!

[MOMO]

So . . . socializing failing businesses that have ****ed themselves over is ok, but socializing healthcare isn't? Yeah, that makes sense. :rolleyes:

:confused:

Did i say it was ok to bail out failing businesses?

[Jorgen]

Damnit when will my 401k ever get a break? Mine's been sucking it up over this year and I'm sure the last few days will make it much worse.

I think that everyday I watch my accounts take their beatings. The only reason I can make myself sleep well at night is knowmy for every $1 I put in my company is adding another $1.50 so I am still getting my benefit. Now the IRA I have had for the past 8 years is the one that really pisses me off.

[Blackcoog]

I think that everyday I watch my accounts take their beatings. The only reason I can make myself sleep well at night is knowmy for every $1 I put in my company is adding another $1.50 so I am still getting my benefit. Now the IRA I have had for the past 8 years is the one that really pisses me off.

Same here my company has a 100% match up to 8% contribution. It still sucks though. :(

[JScullin]

I think that everyday I watch my accounts take their beatings. The only reason I can make myself sleep well at night is knowmy for every $1 I put in my company is adding another $1.50 so I am still getting my benefit. Now the IRA I have had for the past 8 years is the one that really pisses me off.

But can't something like the Enron fiasco totally kill that? People lost their entire retirement funds and because that company cooked the books.

[Jorgen]

But can't something like the Enron fiasco totally kill that? People lost their entire retirement funds and because that company cooked the books.

They cooked the books and people were primarily in company stock there. That is how they lost their money. At least that was my understanding and the reason not to keep all you retirement money in company stock.

[BigBalledOX]

:confused:

Did i say it was ok to bail out failing businesses?

Sorry, I realized after the fact it sounded like a personal slight, which I didn't mean it to. I just find it funny the government has no problem bailing out businesses that made horrible decisions but if you try to make sure everyone has health care everyone gets all up in arms. Wasn't aimed at you but the hypocrisy in general.

[NorCalCoug]

And the privatization of profits, socialization of losses continues... :(

++ This.

The boardmembers for Freddie Mac and Fannie Mae received millions when the government took over, as part of their "golden parachute" clause for their jobs.

US Democrats question Fannie, Freddie CEO exit pay - Forbes.com (http://www.forbes.com/reuters/feeds/reuters/2008/09/09/2008-09-09T194236Z_01_N09290704_RTRIDST_0_FANNIE-FREDDIE-PAY-CONGRESS-UPDATE-2-CORRECTED.html)

That's seriously ****ed up.

[carajo]

government bailing out big businesses...

*sigh*.

Government is bailing out themselves. AIG insures a LOT of bonds issued by state and local governments in the US. The bonds are often not rated based on the particular government's rating, but on the insurer that backs those bonds.

As well, AIG is held in a lot of money market accounts. Did you see where there was a money market "broke the buck"? What this means is that the assets of the the fund are worth less than 100%. This isn't allowed in money markets. You put in $1 today, you get at least $1 back tomorrow. It's the equivalent of cash. So the problems that would be created by allowing AIG to go under would be monumental.

And don't forget that AIG is the world's largest insurer. And insurance isn't like cars. If GM went out of business tomorrow, your car wouldn't cease to exist. And you could easily go buy a different car. Insurance is highly regulated, and there aren't always very many options in different geographical areas.

[carajo]

But can't something like the Enron fiasco totally kill that? People lost their entire retirement funds and because that company cooked the books.

Remember that what Enron was doing in terms of their finances wasn't black and white against the rules. Unethical, yes. Particularly in their encouraging their employees to continue buying their stock. Most companies now issue a statement regarding their stock, warning that you shouldn't put all your eggs in one basket and that you are welcome to sell the stock (if the company gives it to you) and buy something else.

Anyhow - Enron wasn't really breaking any rules. Grey area. Worldcom, on the other hand. Blatantly broke the accounting rules. Black/white.

[KoochieCivic]

Damnit when will my 401k ever get a break? Mine's been sucking it up over this year and I'm sure the last few days will make it much worse.

Tell me about it... -20% so far this year.

[bubby]

I've been taking some pretty big hits on my retirement as well. I'm in TIAA-CREF, but the options I chose have been going up so I'm hopeful.