AIG uses my money to tell me how taking more of my money is good for me
In the dark of night last night, the Bush administration and AIG hammered out a plan to confiscate more of my money and yours For The Good Of The Economy. The first $85 billion didn’t work. The next $38 billion work. So let’s throw more bad money after bad! Who needs Obama? Like I’ve said repeatedly over the last year, statism and socialism are here and now. Via WSJ:
The U.S. government reached a deal Sunday night to scrap its original $123 billion bailout of American International Group Inc. and replace it with a new $150 billion package, according to people familiar with the matter. While the arrangement stands to considerably ease terms on the faltering insurer, it gives the government an unprecedented role as an actor in financial markets…Under the terms ironed out late Sunday, the government would give AIG more money, including $40 billion from the U.S. Treasury’s $700 billion Troubled Asset Relief Program. It would also receive less interest than on the bulk of the original loan, while freeing AIG from exposure to some of the risky financial instruments that nearly caused it to file for bankruptcy protection.
The $150 billion in government aid consists of a $60 billion loan, a $40 billion preferred-stock investment and $50 billion in capital largely to purchase distressed assets which are to be placed into two separate financing entities.”
These people don’t know what the hell they are doing. (See: “Effectiveness of AIG’s $143 Billion Rescue Questioned”) And now they want more.
Early this morning, AIG sent me an e-mail from its new “Blog Relations” department. Yes, when they’re not using our tax dollars to fund spa retreats for themselves, they are paying flacks to tell me how taking more of my money and yours is good for us.
Your tax dollars at work:
We apologize for sending this to you as a mass e-mail distribution, but we thought you would want to receive this information as soon as possible, especially since you and your readers have been following this story closely.
Below are two announcements that AIG released minutes ago at 6 a.m. New York Time. For more information, you can listen to AIG Chairman and CEO Edward M. Liddy’s investment community conference call today, November 10, at 8:30 a.m. New York Time at www.aigwebcast.com.
Best regards,
AIG Blog RelationsU.S. TREASURY, FEDERAL RESERVE AND AIG
ESTABLISH COMPREHENSIVE SOLUTION FOR AIGDesigned to Create Durable Capital Structure, Resolve Liquidity Issues From Credit Default Swaps and U.S. Securities Lending, Facilitate Orderly Asset Sales, and Enable Repayment of Loan Plus Interest
NEW YORK, November 10, 2008 – American International Group, Inc. (AIG) today announced agreements with the U.S. Treasury and the Federal Reserve to establish a durable capital structure for AIG, and facilities designed to resolve the liquidity issues AIG has experienced in its credit default swap portfolio and its U.S. securities lending program.
Edward M. Liddy, AIG Chairman and CEO, said these agreements are a dramatic step forward for AIG and all of its stakeholders: “Today’s actions send a strong signal to our policyholders, business partners and counterparties that AIG is on the road to recovery. Our comprehensive plan addresses the liquidity issues that threatened AIG, and gives us the financial flexibility to complete our restructuring process successfully for the benefit of all of our constituencies.”
Liddy continued, “The $85 billion emergency bridge loan was essential to prevent an AIG bankruptcy, which would have caused incalculable damage to AIG, our economy and the global financial system. Thanks to decisive action by Congress, Treasury and the Federal Reserve, there are now additional tools available to create a durable capital structure that will make possible an orderly disposition of certain of AIG’s assets and a successful future for the company. Our goal is to repay taxpayers in full with interest, and emerge as a focused global insurer that will create meaningful value for taxpayers and other stakeholders.”
The actions announced today include both ongoing financing facilities and one-time transactions designed to address AIG’s liquidity issues. The ongoing financing facilities include:
· Preferred Equity Investment: The U.S. Treasury will purchase, through TARP, $40 billion of newly issued AIG perpetual preferred shares and warrants to purchase a number of shares of common stock of AIG equal to 2% of the issued and outstanding shares as of the purchase date. All of the proceeds will be used to pay down a portion of the Federal Reserve Bank of New York (FRBNY) credit facility. The perpetual preferred shares will carry a 10% coupon with cumulative dividends.
· Revised Credit Facility: The existing FRBNY credit facility will be revised to reflect, among other things, the following: (a) the total commitment following the issuance of the perpetual preferred shares will be $60 billion; (b) the interest rate will be reduced to LIBOR plus 3.0% per annum from the current rate of LIBOR plus 8.5% per annum; (c) the fee on undrawn commitments will be reduced to 0.75% from the current fee of 8.5%; and (d) the term of the loan will be extended from two to five years. The extension of the term of the loan will give AIG time to complete its planned asset sales in an orderly manner. Proceeds from these asset sales will be used to repay the credit facility. In connection with the amendment to the FRBNY credit facility, the equity interest that taxpayers will hold in AIG, coupled with the warrants described above, will total 79.9%.
The one-time transactions involve the creation of two financing entities capitalized with loans from AIG and the FRBNY. These entities will purchase assets related to AIG’s U.S. securities lending program and Multi-Sector Collateralized Debt Obligations (CDOs) on which AIG has written credit default swap (CDS) contracts. The entities will collect cash flows from the assets and pay interest on the debt. FRBNY and AIG will share in any recoveries in the market prices of the assets.
· Resolution of U.S. Securities Lending Program: AIG will transfer residential mortgage-backed securities (RMBS) from its securities lending collateral portfolio to a newly-created financing entity that will be capitalized with $1 billion in subordinated funding from AIG, and senior funding from the FRBNY up to $22.5 billion. After both amounts have been repaid in full by the financing entity, the parties will participate in any further returns on RMBS. As a result of this transaction, AIG’s remaining exposure to losses from its U.S. securities lending program will be limited to declines in market value prior to closing and its $1 billion of funding.
This financing entity, together with other AIG funds, will eliminate the need for the U.S. securities lending liquidity facility established by AIG and FRBNY in October, which had $19.9 billion outstanding as of November 5th. Upon repayment to all participants, AIG will terminate its U.S. securities lending program.
· Reduction of Exposure to Multi-Sector Credit Default Swaps: AIG and FRBNY will create a second financing entity that will purchase up to approximately $70 billion of Multi-Sector CDO exposure on which AIG has written CDS contracts. Approximately 95% of the write-downs AIG Financial Products has taken to date in its CDS portfolio were related to Multi-Sector CDOs.
In connection with this transaction, CDS contracts on purchased Multi-Sector CDOs will be terminated. AIG will provide up to $5 billion in subordinated funding and FRBNY will provide up to $30 billion in senior funding to the financing entity. As a result of this transaction, AIG’s remaining exposure to losses on the Multi-Sector CDOs underlying the terminated CDS’s will be limited to declines in market value prior to closing and its up to $5 billion funding to the financing entity. As with the securities lending program, FRBNY and AIG will share in any recoveries in the market prices of assets.
AIG will continue to have exposure to CDS contracts on Multi-Sector CDOs that are not terminated. As AIG winds down its Financial Products division, it will also have exposure to other types of remaining CDS contracts, which have generated substantially smaller total collateral demands than the CDS contracts on Multi-Sector CDOs.
Taxpayers will benefit from the transactions with AIG as follows: fees, interest and repayment of the FRBNY loan in full, payment of a 10% coupon on the newly issued preferred shares, cash payments from the assets purchased by the two financing entities and potential asset appreciation in the underlying securities held by those entities. Taxpayers will own 77.9% of the equity of AIG and will hold warrants to purchase an additional 2% equity interest, and so will benefit from any future appreciation in AIG shares.
AIG will also continue to participate in the recent government program being utilized by many companies for the sale of commercial paper. The Commercial Paper Funding Facility (CPFF) has allowed AIG to reenter the commercial paper market. AIG is authorized to issue up to $20.9 billion to the CPFF and has currently issued approximately $15.3 billion as of November 5.
Mr. Liddy continued, “All of these steps, which would not have been possible in September, will benefit AIG, its stakeholders and the American taxpayers. This plan contributes to stabilizing the financial system and provides the opportunity for the public to realize gains on its AIG investment in the future. These measures will also put AIG on track to emerge as a nimble competitor with good long-term growth prospects.”
“This innovative solution enhances AIG’s liquidity position. At the same time, American taxpayers will be fairly compensated for funds lent to AIG, and they will capture the majority of any appreciation in the value of the securities involved in the program in the years ahead.”
Liddy added, “Today’s announcement would not have been possible without the vision and extraordinary hard work, dedication and cooperation of officials from the U.S. Treasury, the Federal Reserve Bank of New York, the Federal Reserve Board and the state insurance departments. On behalf of AIG, I would like to extend sincere thanks to all of those involved in crafting this mutually beneficial solution.”
Where is the fiscal conservative counterinsurgency?
***
Hans Bader at OpenMarket.org has more.
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- AIG bailed out. Again. » A Couple Things » A couple things about politics, sports, travel, and other stuff.
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- Monday Morning Roundup: Thinkin’ ‘Bout Bailouts — The Opposite of Jim Bunning
- Ban Bailouts–Stop Inflation Now (SIN)–Stop Socialism of Losses! « Pronk Palisades
- Bailout On Steroids | America Needs Me
- Without Objection: WO’s Daily Roundup
- Milking The Teet Of America | 101 Dead Armadillos
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- The College Politico » Blog Archive » Massive Bailout Madness!!!
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- The Fed’s Ponzi Scheme: “It’s none of your business where the money is going.” « Mark Epstein
- Hot Air » Blog Archive » AIG still throwing lavish parties with your money
- Are we headed toward a depression or just a deep recession? » A Couple Things » A couple things about politics, sports, travel, and other stuff.
- AIG Fiesta In Pheonix « Mcnorman’s Weblog
- AIG Bail out … What a Joke.. | Citizen-Right
- Foreign banks profit on AIG’s bailout » A Couple Things » A couple things about politics, sports, travel, and other stuff.
- Michelle Malkin » Road to GOP redemption: Roll back the bailouts, draw a line in the sand
- Everyone lines up for a bailout | Conservative247
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Asleep at the damn switch, apparently.
Looks like they’re trying to baffle us with BS.
I love the part about “incalculable damage to AIG, our economy and the global financial system.” I think that’s exactly what Congress has done.
Their very own actions have caused incalculable damage to our economy and the global financial system. All these bailouts are just furthering the damage.
At this rate its going to be cheaper just to pay off everyones mortgage.
Well… we saw this one coming from a mile away.
Throwing money at it didn’t solve the problem the first time. So, we just need to throw MORE money at it.
The definition of insanity is …..
1.20.09
They’re not fixing any problems with this money, that would have to be done by rolling back the laws that got us here in the first place (SOX, for example). In his own words, the CEO told us the key to all this – “sending a signal”. Smoke signals would cost a lot less and probably be more effective.
Shoot the person in charge, look at the second in command and say, “You have two months.”
THAT is the severance package I would implement…
My point exactly.
But how would you know what’s good for you, if somebody didn’t tell you? AIG and THE GOVERNMENT know what’s best for you. After all, //tongue firmly implanted in cheek// they have only your best interests at heart. You’re not supposed to think for yourself, but blindly follow the instructions given from on high.
It’s foolish to throw money at AIG, but it’s not totalitarian as your illustration suggests. Nobody is holding a gun to America demanding money. The decisions are being made by elected officials, who can be (and have been) voted out when the people get (got) sick of them.
Being wrong doesn’t make you a Stalinist or a Nazi.
FDR would be proud.
lgm,
Theft is theft, no matter how many people vote for it. Stealing is stealing, no matter how many vote for the criminals who carry it out.
Socialism is stealing
Yes, they are. If you don’t pay your taxes people with guns will come to take you away. It’s not a voluntary arrangement.
The Nazi’s were voted into power. They were “elected officials”.
The only news I want to see out of AIG is that the whole freakin’ Board and all company executives have been dismissed, and that some of those same people will be prosecuted to the fullest extent of the law.
On November 10th, 2008 at 10:06 am, lgm said:
Are you saying these elected officials are acting in your best interest or according to your wishes?
Hmmmmmm ….
BTW, folks. Mark your calendars.
The Boss just posted an article criticizing the Bush administration. Our resident lefty troll is telling us “Chill out; its not that bad”
(what’s in my coffee?)
No, but they’re threatening to take Americans’ livelihoods – which is the same diff – if they don’t get the money.
OK, but the elected officials in charge are the very DEMOCRATS who got us into this fiasco in the first place, by taking advantage of loopholes in deregulation to abuse our financial system for their own personal and political gain!
But it’s gonna be alright, in the end. Obama The Experienced will fix this mess. (Even though he’s never led a business or corporation, I understand he once balanced his own checkbook – give or take being off by only a few thou’!)
After all, he is infallible, you know.
That sounds like you are mocking the ONE!!!
/Obamas NSF mode off.
On November 10th, 2008 at 10:06 am, lgm said:
You’ve already won and destroyed the country, you little collectivist. What else do you want? For us to be happy about it?
Believe me, no one’s happy that it’s going to take a civil war to throw you collectivists out of power.
Bus 101: Tell the customer what he wants to hear -
I’m sure many a subprime defaulter signed promisary notes stating literally the same thing. I’ll believe a statement like this from AIG when they make their final repayment!
I also read on Drudge that the Fed refuses to answer a FIOA for who has been receiving the $2 Trillion in bailout funds and what securities are being used to secure it. Just as I expected due to the total lack of over sight of Paulson and his cronies thanks to the Socialist crap sandwich 2.0.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=worldwide
Off topic: Happy 233rd Birthday to the United States Marine Corps and to those that are or who have served!
ΜΟΛΩΝ ΛΑΒE (mo-lone lah-veh) Translation: Come and take them!
You can’t print up and give away this kind of money without inflation taking off…
Give it about 18 months then look out!
Jimmy Carter II
Apparently, the $440,000 the exec’s spent at the spa wasn’t enough for them to work out their strategies. Perhaps, another retreat would be advised so they can find their true direction and esoteric answers to their problems.
Fire the ba$t–ards!! Let them go bankrupt and save the taxpayers money!!
Being further marginalized and ignored by the MSM and the Donkey party.
Of course, you’re correct, flenser.
This poster’s comments clearly and loudly illustrate the tremendous success the Gramscian socialists/statists/collectivists have had over the past 40+ years in rotting our society/culture/nation from within.
The media and the elite are captives of the existentialist world view.
The only things that matter to them – the only things – are power, sex, and money.
Virtually everything else, if not actually everything else, can be seen to be derived from power, sex, and money.
In fact, power, sex, and money themselves could be seen merely as variations of the same thing.
The poster says,
Well, on the face of it, he is not incorrect.
But, why are those elected officials making those decisions?
Because they are in thrall to the power (which also helps them acquire more money…and sex, if they desire); fame (which helps them acquire more power, and money…and sex, if they desire); and perks (power, money,…and sex, if they desire) that they derive from being in office.
And how do they get elcted?
Through elections manipulated by the media and by powerful, moneyed interests – who, having more or less “bought” the politicans, damn sure control them through actual or veiled threats of pulling out their support of any wayward politician(s) that might dare “turn on” their handler(s)/owner(s).
But, as the saying goes (paraphrase?): “There are none so blind as those who will not see.”
One could modify the saying to “…who can not see.”, because of the success the existentialist socialists/etc have had over the past decades.
Clowns like that poster perhaps are not willingly blind; they may indeed be blind; and just might not have the capacity to see and understand the disaster that is gradually, in salami-slice fashion, devouring our nation/culture/society…and the world.
…who can not see…., because they are morally feeble, weaker, less fortunate products of our dangerous “education” system; and of the septic sewer of a culture with which the media and the elites have enveloped us – the way constrictor snakes coil themselves about, and suffocate their prey.
Can’t Bush and
PaulSkunkson just go on freakin vacation or something? You almost have to wonder what kind of jobs they have lined up on the civilian side come 21 January, because the more money they throw at AIG and the rest of the crooks, the worse the stench.Thanks for going native, Mr. President. I won’t be sorry to see the back of you no matter who takes your place.
Personally, I would prefer to see these “too large to fail” companies split into smaller companies through anti-trust style legislation than see them nationalized.
Oh, but that doesn’t fit the agenda, now does it?
Lord, give me strength! My morning started off nice, when I took the dog for a walk there was a herd of deer on the front lawn, ahh nice. Then I turn on the news to hear about AIG getting more money and a guy from the UAW wanting money to pay for Union benefits and Harry and Nancy only all to happy to give it to them. ARG!!!
Why should I bother getting up at 5:00 AM and go to work every day just so the Government can take half and give it away to jacka$$es?
Tell me how good my crap sandwich tastes, and how much I really enjoy it. Where are the condiments?
And another example of “THEY LIED”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=worldwide
I have a feeling they’re not going to stop at “half.”
Excuse my South Georgia mathematics but..
The way I learned it, supply and demand means that putting more money in to circulation increases supply and therefore drives down inherent value.
If the US was so far in debt to begin with, where are we getting all of this money?
To my best understanding, we are simply printing it.
So, as far as I can tell, we are “rescuing” the financial system by forcibly devaluing our own currency and adding a booster rocket to inflationary forces.
I didn’t go to the Harvard Business School so I’m not a pro. But the definition for actions like these is: Stupid. Synonyms would include (but aren’t limited to): “Idiotic”, “dumba$$”, and, my own favorite, “lunacy”.
However, most of our fearless leaders did attend schools like Harvard and Yale. So if a dumb, God Fearing, gun owning Red Neck like me can figure it out, why can’t they?
Answer, they already have. Follow the money. These actions MUST lead to someone in power lining their pockets. There is no rational reason for them to have been implemented unless someone in the Government stood to make a lot of cash (for the very reason that “a lot” of cash will not be much money after inflation runs away with our currency.
Carter would have done this because he was a wimp. The Democrats in congress have done this because they are crooks.
In pre war Germany, the Nazis (yes, I am comparing DemoCommies to Nazis, so what) devalued the Reichsmark and replaced it with “New Money” on several occasions. This was an orchestrated attempt to steal money from the populace and redistribute it to the government.
The Brits did the same thing in 1970.
Johnson financed Vietnam without war bonds by removing us from the gold standard.
Crooks all.
Here’s how it works.
The auto unions give money to the Dems.
In return the Dems give taxpayers money to the auto unions.
In return the auto unions give money to the Dems.
In return the Dems give taxpayers money to the auto unions.
In return the auto unions give etc etc etc.
Infinite loop.
The Dems win, the unions win, and he only people who lose are the dwindling number of taxpayers. Or, since we’re borrowing the money, the suckers who lend it to us thinking they’ll get it back.
The government in bed with corporations is not defined as socialism. It is absolutely as dangerous though.
Our market has not been free for a very long time, and we have to understand why. As long as a centralized bank has complete control over our money supply, and a centralized federal government has complete control of taxing our production, we will remain slaves to the state.
If the Republican Party seriously wants to win again, they have to understand the principles of liberty and freedom. There would be no starker contrast to Democrats if they adopted this plank in their platform.
The money has stopped coming in from other countries – we are now simply printing it.
Boomer
OT
Thank you!
I think they should stay at Club Gitmo
Republicans are just as much to blame for the economic cataclysmic unleashed when we were taken off the gold standard – As that dubious honor can be laid on the back of Nixon. They are all crooks.
January Twentieth, Two Thousand and Nine, the series premier of the new reality TV show taking the nation by storm!
Coming soon on all networks and timeslots…
Obama’s working on that one, too.
Let’s try ‘em in Texas!
Resurrect Judge Roy Bean!
Hindsight and all, letting AIG file for bankruptcy, re-organize, sell off some of its assets, probably was the way to go.
Sometimes in a capitalist society, a business will fail.
Propping up a failed business on the government dime just encourages risky behavior.
Libs usually talk of corporate welfare as reducing exhorbitant and redundant taxes on business, but this is corporate welfare.
Hi 30 Pieces Of Silver! Where’ve ya been? We’ve missed you.
PymouthAcclaim, I’d rather resurrect Judge Isaac Parker, “The Hanging Judge” of Fort Smith, Arkansas.
A much more direct form of it, too.
Busy dealing only in CASH!
PLEASE READ:
Has anyone heard of the 2009 Defense Authorization ACT that was signed into law on Oct 14, 2008? It recommends that we find a single insurer to provide Defense Base Act workers compensation insurance for all DOD contractors (which includes benefits for “foreign nationals”). They get to charge the Govt one rate and they have no competition for other markets.
AIG is on a VERY short list of insureds who will be bidding for the privilage of this monopoly.
Also, then there is the unsettling development of Shariah FINANCE.
Looks like this bailout is SHARIAH COMPLIANT.
THIS IS HOW SHARIAH GETS INVOLVED IN OUR DEMOCRATIC MAINSTREAM.
UN BELIEVABLE.
Now, we’re going to use more of your money, to lobby for more of your money.
1/20/13
I’ve been around… more reading than posting. I’m not taking this Obama as president thing too well.
The value of fiat money is based upon the faith receivers of fiat money place upon it.
That faith comes from the productivity of the people backing that money.
Not the ability of a government to print it.
I see nothing on the horizon to increase my faith in this new administration to understand that.
Further, look around you and see if there is anything you can see which gives you any reason to think the people of this ocuntry will be more productive going forward or less.
Plan and adjust your life accordingly to the reality you see around you.
US FINANCIAL INSTITUTIONS AND BUSINESS ENGAGED IN SHARIAH COMPLIANT FINANCE
by – David Yerushalmi, Esq.
look for more junkets to exotic places so they can “plan” on how to use our money…good grief this country is messed up…dems gone wild….all it needs is well you know….
Keep in mind that a bailout of AIG is also a bailout of Goldman Sachs. Goldman has an exposure to AIG in excess of $20 Billion. Henry Paulson is a former Chairman of Goldman, and the new 30 something wiz kid he tapped to run the bailout plan is also a Goldman alum.
Oh, and Obama’s largest corporate campaign contributor? Goldman Sachs.
I know what you mean, 30. I was sorta depressed, too.
But, just remember this:
Isaiah 43:2 When you pass through the waters,
I will be with you;
and when you pass through the rivers,
they will not sweep over you.
When you walk through the fire,
you will not be burned;
the flames will not set you ablaze.
Lindsay Graham is waiting behind a hotel door in a bathrobe, waiting for someone to ring the bell…
Regarding Goldmans, good old Obama has Warren (I cant believe I lost 77%) Buffet nicely working on his financial team! Buffet just slapped an apparent 5 Bill on the table for Goldman too!
As for the AIG situation, seems there was the ‘real’ story of that first 85 billion. Apparently, they needed that cash to pay off ‘unnamed’ creditors. That was the reason they had to go back for more cash – the additions before this gem.
Now, they need this re-written bailout in order to consolidate more of their losses, again to unnamed creditors, as well as a means to ‘get out from under’ that unfair 14% interest rate on the original 85 billion (the money they were supposed to have returned by now but cannot cause, well, no-one trusts them anymore (hard to sell snake oil to the same customers again and again) ).
Now where it gets interesting is the report today that also as a part of this, they are holding credit defaults for yet another unnamed bank, and there is concern they will need to be paying them off as well.
As for the email that MM nicely shared, it is soo twisted that there can be no doubt the obfuscation is their only retort to the impending claim of fraud.
Thank you for keeping on top of this as it continues to develop, and thank you for dropping–for good I hope–what I will refer to as the “sandwich analogy”.
Thanks alot for that disgusting mental image, Aloha!
It was laughed at, ignored, and derided as crazy.
Guys,
The 15th (I believe) the G# countries meet to decide on the New World Reserve Currency.
You can already hear England, France, etc join Red China and Russia in calling for a currency de-coupled from the US dollar.
When this happens, what you will see hit soon after is hyper-inflation and possibly hyper-stagflation.
A few people I’ve talked to have said that we’re going to have hyper-inflation along with a severe deflationary economic contraction (of GDP, I guess…).
Along w/the killing of our coal & oil industry, which ever of the 3 scenerios that occur, watching it should be really “fun”.
Why worry? I’m not saying not to fight, but to worry about what’s coming is silly.
So, any opinions on what the exchange/conversion rate will be on Old-$ vs New-$ ? We could start a pool!
Mine is that they’ll knock 3 zeros off the old dollar: $1000 to make each $1.
Does this seem like a power grab? The Left spent the last 8 years subverting our government through questionable fundraising and cleverly disguised propaganda (Iraq War, e.g.), then ignored (shouted down?) warning signs from Bush, walked off the job this summer and now these bailouts and government mixing the feed with free enterprise — is this some consolidation of Liberal Power? Is there a quiet coup d’etat going on right now?
It’s not about Democrat vs. Republican anymore – Both parties are in on the scam, and you are the sucker. By continuing the left-right paradigm, these crooks continue to win.
I disagree. They’re not stupid. They’re raiding the government coffers to make themselves richer, and they know exactly what they’re doing.
This is liberalism on steroids.
This bailout was Shariah Compliant trough Shariah Finance aka: Jihad with MONEY.
PLEASE READ
Thanks, tre.
Re: MtsEdge
A good clarification. Thanks.
As much as I find the whole “industry bailout of the week” distasteful and flat out dangerous, I could swallow it a bit more if the monies disbursed were loans. To emphasize the importance of paying back these loans, the companies would be prevented from declaring normal bankruptcies.
In addition, put the officers and board members of the companies/corporations into a personal financial bond/guarantees that, by nature, would limit their powers to distribute the profit for anything other than standard wages, benefits, and re-invetments into the company. No bonuses or increases in salary until the loans are paid off. Retirement or quitting the positions will not erase the financial responsibilty placed on these people.
Of course, the liklihood of this happening is near impossible.
On November 10th, 2008 at 12:49 pm, Ahh a Lion! said:
“…you are the sucker. ”
Wow, didn’t take long to resort to name-calling. BTW, conservatives have lost control of the GOP and the electorate. We need to re-take control of the GOP. This is indeed a left-right thing. The party affiliations are becoming increasingly irrelevant. I voted GOP because of Palin, not McCain.
#70.
Nevermind.
OT: Anyone know what’s going on with Freerepublic ?
Indeed, my friend, indeed.
Re: Spidgy
Was meaning it in a you = the American people. Didn’t mean to offend.
I do not think that the “you” in “…you are the sucker.” referred to you, the poster, specifically; but rather to all of us working, responsible, tax-paying “yous” out here in the U.S.
Seems more likely that the ‘people in charge’ are simply stuck in their thinking that the ‘good old companies’ need to survive. Quite frankly, I think that it is time for these companies to fail.
Clearly, the management of these companies has failed, and giving them back these same financial problems can only result in worse problems.
As for the auto-bailout, I have no idea why they are even considering handing money to management that is so irresponsible that it will not lay odff workers as the company goes down in flames. In fact, the management is attempting to use the current number of workers as a reason to hand them money.
Can someone tell me why those auto companies, if they get ‘bail-out’ money, would ever do anything to improve productivity with the new paradigm of ‘too big to fail because we hire a lot of unneeded people’?
I’m just a country hick. But, here’s something I don’t understand. There’s lots more than this.
Real assets can’t be destroyed. Their valuation can change.
So, it’s not like these things disappear or there’s a vacuum.
Using AIG as an example.
Are they the only insurer/reinsurer out there? If they went away (in a free market system) someone would step up and fill the need if it were profitable to do so.
Same with the mortgage bailouts. Neither the mortgages nor the real estate would go away, just the valuation of it.
Chap 11 was the answer to really solve the problem.
And continuing to prop up these inefficient entities adds to making the bubble even bigger reducing any possibility for a soft landing. I do think we’re way past that.
Higher economics puzzles me
Check out this video of my hero Peter Schiff. He takes some of the more idiotic economists to task for taking this exact position: Link.
The leadership of GM and other auto-makers have for a long time seemed to have been infiltrated and taken over by Union acolytes.
I really don’t see what all the fuss is about. The omniscient Barney Frank says that somebody (who just happens to be in line for an appointment in the Obama administration) told him he was ‘pretty sure’ this kind of non-transparent activity is ‘OK’.”
I can now sleep soundly, confident that our nation’s economy is in good hands once again.
Now where did I put that map to my buried strongbox? I need to put my gonads in there before my government confiscates them.
If we are going to give $ to companies who have shown themselves incapable of managing risks and running their businesses properly, at least hold them accountable for changing things. Otherwise, what is their motive to change?
If we “loan” (giveaway) $ to them, then we should make some demands/stipulations of them to ensure the $ is being used wisely.
1) hire an outside consulting group to go in and review their business model and processes. Make sure things are running as efficiently as possible. Eliminate the fat and resource drains that do not add direct value. Freeze all discretionary spending. Benchmark to the industry and etablish objective measurements which show they are “right sized” (fte/rev, fte/unit, or something). Report back to congress.
2) The consulting firm then becomes an oversight comittee repsonsible for the taxpayers vested interest.
3) Have the company develop a new business plan for the next 5 years which will transform the company. It must include timetables, oweners, and measureable results. Missing the timetable is grounds for dismissal.Results are reported quarterly to the oversight committee and teh CBO. Significant misses result in a congressional review.
4)Concesssions from Unions. Wages and benfits to be benchmarked against the industry average and that becomes the new wages and benfits. In order to rightsize the company, layoffs without huge severance packages are a must.
5) The gov’t takes over the current pension obligations. A huge drain on company resources. The company must stop new pension obligations from being created and develop a plan to move to 401K or similar retirement plan.
Up to this point, I see no sacrifices being made, except taxpayers. Nor has there been any parameters set on the funding limits. At htis point it is open ended. Which is disastrous when combined with no consequences or “skin in the game”.
Noted. Thanks.
Now is the time for the tide to turn away from both “parties.” They are merely the essence of one another anyway.
The automakers in the US have had their _____’s handed to them by foreign carmakers, for a variety of reasons (cheap labor, etc). It’s too late for the playing field to be leveled. More money isn’t going to save a company that has diminished demand for its products and services. The only chance is to artificially inflate demand w/ ridiculous tariffs or taxes on cars imported.
Or, they could just lay off a bunch of people, spend the money on R&D and come back to the market when they’ve got a product that consumers demand (normally how the free market would work). The competitive advantage of the assembly line that Ford dominated a century ago is a bit outdated now.
We should all blame Alexander Hamilton for this:
AIG is the WORLDS largest insurer. You name it, they insure it. Other insurance companies, Healthcare Comapnies, Boeing, Bechtol…. if they went…there is an argument that there would not be enough capacity in the markets to sustain all their business if they went under.
I dont know that for sure, what I do know is that they ARE the WORLDS largest insurer and that being the case, this bailout was a GIVEN.
Ahh a Lion,
Government in bed with business is actually the definition of Facism.
Nixon’s only compliance in taking us off of gold, a law passed in 1964 by LBJ, was his unwillingness to reverse it. Every President since then is guilty of the same thing.
You are right that this isn’t about Dems and Repubs.
It IS about Socialists and Capitalists. Of those two parties, at least one DOESN”T openly say that they want to redistribute wealth and take my hard earned so that some junkie can have a nicer apartment. I grant you, the party that doesn’t say these things has had a pretty tough time convincing me they don’t wish for it secretly.
And yes, any party that wants to redistribute my wealth (meagre though it is), subvert the nature of my country and teach my child that the State is the answer to all of the individual’s problems is Stalinist. Plain and simple. Pleeeeease don’t try to tell me this isn’t what the Dems are about because they have proven it over and over and over.
The Republicans we have elected in the recent past, however, seem to enjoy not being kissed after allowing the Dems to buy them dinner.
The one thing I think we do agree on is the universality of the Crookedness.
Well said on #28 Granite.
Anytime these guys use the word “comprehensive”… it really means “we’re convinced this is the best way to screw you over”
And yes Michelle, socialism IS here. Think about it. When we object to transferring wealth, Liberals and Dems say “We’ve already got a progressive tax code, so that’s happening already.”
Translation: “Yes, we really DO believe in Socialism and we’re already pushing it on you, but we won’t say it exactly that way… yet.”
They don’t even pretend to tell the truth.
BTW, how do you pronounce that guy’s name? ‘Cash & carry’??
Is this story from The Onion?
Correct,
correct,
correct,
and…correct.
I’ll ask it again:
Does not anyone else find that the coincidence strains credulity, that the oil/energy markets conveniently had a “crisis” several months ago; and the credit market most conveniently had a “crisis” a month before our election
- an election in which the socialist/statist/collectivist candidate was a virtually unknown quantity (and about whom what was/is known is not good) with long, strong connections to America-haters;
and an election in which this socialist/etc candidate – regardless of what the legal verbiage ultimately shows his birthplace and “natural-born American status” to be (or to have been) – hardly seems close to being an American like the vast majority of us in the U.S are….regardless of whether our ancestors were born here ten or more generations ago; regardless of whether our ancestors were born here one or two generations ago; regardless of whether we were born in another country and became naturalized; regardless of whther we are Asian, white, American black, American Indian, Latino (again, likely just the P.C. term for Spanish-speaking Central American and Caribbean Indian/creole mix), Caribbean black, African black, Japanese, Northern European, Western European, Southern European, Eastern European, Mediterranean (including Lebanese), India Indian, Filippino, Chinese, Korean, Japanese, etc,etc…etc.
Here’s what I mean:
I am of Souther European extraction and heritage; all my grandparents were immigrants.
Tiger Woods is my fellow American.
Chuck Norris is my fellow American.
As much as I wretch just thinking about it, Ted Kennedy is my fellow American.
Bill O’Reilly is my fellow American.
George Foreman is my Fellow American.
Benjamin Bratt is my fellow American.
Barbara Jordan was my fellow American.
Martin Luther King was my fellow Amerrican.
Gary Cooper was my fellow American.
Senator Inouye is my fellow American.
Desi Arnaz was my fellow American.
Jay Silverheels was my fellow American.
Mitt Romney is my fellow American.
And so on, and so on,…I think you get my point.
But, who the hell is Barack Hussein Obama?
I take a back seat to no one in my love of GM products.
Having said that, it has has become clear to me that these companies as currently constituted cannot continue to exist.
In an economy of diminishing returns, the consessions necessary to compete simply are not realizable by the Unions.
Their contractural commitments to the current employees and the commmitments to their retirees are simply unsustainable.
If we as Americans want to offer them assistance, let’s call it what it is.
Welfare.
The automakers must either cut their benefits packages and costs at all levels.
Or we must punish the foreign carmakers. Who actually employee Americans in states other than Michigan.
Neither seems like a pleasant choice going forward.
Is there a middle ground.
Perhaps but do you see anyone actually trying to find that point.
I do not.
I hear many people saying it is managements fault for not building cars people wanted. What the feck?
Ask yourself when the last time someone around you complained their car was too large or too comfortable. Or that they really enjoyed carrying that sheet of plywood in their Prius.
What they mean when you hear this complaint is that the car makers should be making more Prius like autos and forcing us to take it or leave it.
For years I have heard Americans complain that foreign cars were better anyways. While I never fully agreed, I unnderstood their complaint. Well soon we may not need to worry about that complaint anymore.
The time is near for the US Automotive industry to stand or or be carried off the stage.
Now that is real change.
Freddy said:
Ya, and the real kicker is the one arm of AIG that failed and caused the “need” for the AIG bailout was Steven Cassiano, from their London Office – AIG Global. This London office was responsible for providing “insurance” for bad mortgages with NO UNDERWRITING OR RISK ANALYSIS and no reserves. Cassiano was involved heavily in the Junk Bond scandle of the 80’s.
When mortgages went belly up, and clients came calling….this office had put all of AIG Companies assets on the line and therefore, had promised payments against AIG’s assets. Goldman Sach’s was one of their biggest risks.
I hate to keep belaboring this, but this bailout was done with SHARIAH COMPLIANT FINANCING. I’ve posted links.
Its basically Jihad by money.
People need to see what our Govt’s and Wall Street’s latest financial catastrophy will look like.
Shariah Finance gives money to Charities supporting Jihad and the move to Sharia Law in this country…
Meanwhile, Wall Street and the Govt are allowing this bailout to be done in compliance with Sharia Finance.
UN BELIEVABLE
Apparently the only free lunch in America will be eaten by the high rollers, with taxpayers paying the bill. As usual.
Of course, the bottom-feeders will surface as soon as Obama begins his presidency, and we can look forward to gazillions of free dollars handed out to almost everyone. Hey, everything’s free! Come get yours! Line forms at the rear.
Oldcollegeguy1980,
Here is an idea – yes, a lot of people would be out of work but it seems they may be anyway in the near future so..
How about letting economics take their course and letting the US automakers go under? Then, get rid of the incredibly restrictive laws passed in the last 20 years that make automotive development by small firms and guys working in a garage impossible. We would see improvisation and incentive on a scale not seen since the 1920’s. And, five years from now, we would have far more efficient cars and trucks at prices more people could afford without having to take out 6 year loans that are upside down the day you drive it off the lot.
Sounds crazy..