AIG’s reward for failure: Another $30 billion in taxpayer-backing; Update: $61.7b 4th quarter losses
Screw up, move up. It’s how Obama cabinet officials get ahead. And it’s how Washington’s favored failing businesses get more of your money. The first $85 billion bailout under Bush didn’t work. The second $38 billion under Bush didn’t work. So, hey, how about tossing another $30 billion down the hole?
So much for President Obama taking a stand against Bush’s failed policies, eh? But don’t worry. We’ve got Bozo the VP looking out for us this time, making sure all the money is tracked on the Internets. Oh, wait. Transparency doesn’t apply to the Big Business bailouts. Just trust them:
American International Group Inc., the insurer deemed too important to fail, may get a commitment for as much as $30 billion in new government capital after a record quarterly loss, said two people familiar with the matter.
The insurer may also be allowed to make lower payments on government loans, said the people, who declined to be identified because there was no public announcement. New York-based AIG may forfeit part of stakes in its two largest non-U.S. life insurance divisions to lower the firm’s debt, the people said.
AIG, first saved from collapse in September with a package that grew to $150 billion, had to restructure its bailout after failing to sell enough units to repay the U.S. Firms including banks relied on AIG to back more than $300 billion of assets through derivative contracts as of Sept. 30, making the insurer a “systematically significant failing institution” that has to be propped up, according to the Treasury.
“The government has accepted all the downside with little chance of upside,” said Phillip Phan, professor of management at the Johns Hopkins Carey Business School in Baltimore. “They are trying to protect the global financial system from a complete meltdown.”
AIG, which agreed in September to turn over an 80 percent stake to the government, is set to announce a fourth-quarter loss of about $60 billion tomorrow, according to three people familiar with the matter. The company’s board was scheduled to meet today to vote on the revised bailout, according to two other people familiar with the matter.
***
Update: Down, down, down…
American International Group Inc., once the world’s largest insurer, said Monday it lost $61.7 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history, amid continued financial market turmoil.
The results come as the U.S. government also Monday announced a restructuring of a bailout plan for the troubled insurer, extending $30 billion in additional aid to the company.
New York-based AIG said it lost $22.95 per share in the last three months of 2008. It lost $5.3 billion, or $2.08 per share, in the same quarter a year ago.
Revenue fell to negative $23.8 billion, as the company had to reverse gains it recorded from investments in past quarters.
The latest results include $7.2 billion in unrealized losses and credit valuation adjustments at AIG Financial Products, the source of credit-default swaps, and pretax losses of $21.6 billion tied to the declining value of AIG’s investment portfolio.
AIG’s general insurance business swung to a loss on $2.8 billion in net realized capital losses. General insurance net premiums dropped 16.3 percent to $9.2 billion, and net premiums earned fell 5.9 percent to nearly $11 billion.
Adjusted to exclude certain items, operating losses totaled $37.9 billion, or $14.17 per share, versus a loss of $3.2 billion, or $1.25 per share, last year.
***
Fox Business reporter Cheryl Casone points out that AIG’s losses can be translated to:
$670,652,173/day
$465,730/minute.
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- Obamanomics Continue to Send Dow to Nosedive; AIG still tanking | Christopher Estep's America
- Mandatory Sick Days? What is this, Public School? | BipolarNation.com
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- So much President Obama taking a stand against Bush’s failed policies, eh? Another $30 billion to AIG | Fire Andrea Mitchell!
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So easy for AIG and the rest of these “too big to fail” companies. Why make an effort when you know the government won’t allow you to fail.
At this point we should be tracking the daily billions and trillions being squandered by the Obama/Pelosi/Reid administration. It should be a running score board so we can keep it in perspective just how much of our money they spend.
I want to pass a resolution that allows us to beat every government official until they stop spending our money.
First off, I do not see anything in our Constitution about government getting into private business in the first place. Second, the government does not even have the right to tell us what we can or cannot do in our own homes or businesses (although it has never stopped them yet) but this takes the cake.
Nothing about the American Taxpayer, nothing about We the People, nothing but the government. If that is not nationalization someone please explain to me what it is!
However, there is a little caveat perhaps we should explore … the Constitution does expressly forbid any form of government which is not Republican in nature (And no, that has nothing to do with the RINO led political party of today but with the actual form of government) We really need to begin exploring our options before they bring us past the point of no return and force the hand of true patriots and non-hyphenated Americans.
This is an oversimplification, but how is AIG loosing money? OK, stop doing that. Does anyone know? Has anyone asked?
Yep, sometimes simple works.
When will these idiots wake up and realize you can’t save everyone that is failing? This is so stupid to try to save banks, insurance companies and homeowners who won’t do what they need to do to succeed. This whole country is going to be bankrupt.
As the Dow opens at 12 year lows this morning and has been in steep decline since the One was elected, there is little evidence that this statement is true. Its wearing a bit thin to keep hearing this.
Sorry, but running a deficit every year, I had to fix it for you. The worst part is that they still swear it actually promotes the general welfare. I think they forgot the “general” (as in for the common good) part though.
It’s pretty simple. AIG is losing money because it is spending more than it is earning.
They need to Fail and be done with it. At least dump the top heavy leadership.
I agree with the thought that action needs to be taken now to stop this. Possible scenarios:
1. push the birth certificate issue. There has to be a reason O doesn’t want it shown.
2. lawsuits questioning the constitutionality of government “purchasing” unprofitable companies
3. Look into impeachment actions against the many democrats still in office while under federal investigation.
4. More people at more Tea Parties.
YA THINK?????
How does it feel to be smarter than 95% of Washington DC???
In less than 2 months, obama has spent more than bush did in both the Iraq and Afgan wars since 2001.
Some where along the way, I hear that AIG holds the pension funds for congress. If that is true I can see why they would bail AIG out. Obama and the congress don’t give a damned about our pension funds.
What do you think we will call our new currency after the dollar turns worthless???
What’s this Amero thing that I keep hearing about?
The Soetero?
If you go to the spp.gov site they will deny everything that you need to know about it. The funny thing is that they used to have a page explaining all of the “accomplishments” they had made despite the protests of voters in the respective countries but they took it down.
Unfortunately, it looks like our B. Hussein O. has much larger socialist goals in mind with Europe included … or at least as much of it as he can succeed in dragging down with us.
yes; it is the job of the american citizen to protect the world from crazy despots, feed the people of those crazy despots, give money to those crazy despots so they can buy weapons from other crazy despots to keep themselves in power, and bail out the socialist systems who enable those despots to function. yes, china was involved in 6 party talks right up until the olympics were completed, then they went back to supporting n korea, and every middle east crazy. then there is that bastion of proper society known as europe, where they are too busy striking and rioting to fight for their own freedom. besides, their 2 month per year vacation plan has dictated they have second vacation homes, rather like californians and new yorkers, and they bought those overpriced second homes and secured mortgages that are somehow secured by the taxpayers of the united states. hence aig. hence your 401 is now a 201, and headed for a 101.
Dow just opened at 6985.
Well if we increase unemployment by just a few more points, we will finally be like europe!! Liberals have wanted to be like europe for a while, we are almost there!!!
F$%^K
It sounds like they were the insurer for a lot of the banks’ credit default swaps. This kind of meltdown makes sense, but that means we just sending more money to banks via AIG. Where is it all going? Does anyone know a good, detailed source that explains where all this money is going and why the numbers are consistently so large? For example, does AIG need an additional 38B b/c of contract they had w/CITI? Why wouldn’t they know they had this liability 3 mos ago.
And we are rapidly closing in on the size of government to GDP to our “allies” across the pond.
ThatSamIAm,
Don’t leave out Hilldebeast overseas passing out 900 million dollars.
It just keeps getting worse and worse, more so than I anticipated, knew it would be bad but this admin is just plain wreckless, out of control and must be S.T.O.P.P.E.D. N.O.W.
To date, even the people in our government who are responsible for accounting for the money have gotten absolutely no information from the banks. There is no accounting for where it has gone and it is very likely that there never will be.
The times they are a changing!
Barry O continues to do a heckuva job on the stock market.
These suggestions are perfect and need to be repeated over and over and over. As to #2, there certainly must be a way, constitutionally, to “sue” the administration for malpractice or something. If they are trashing the constitution and trying to impose an agenda on this country that is opposite of what the founding fathers intended, then surely there is a clause in the constitution that can be used to bring them down!
Also, #3…why isn’t this being done already? The Congress is full of crooks, literally! If they are under investigation, they should not be in Congress…period! How hard is that for the American people to grasp? Or perhaps they should be treated like teachers or cops who are under investigation…suspended until the investigation is resolved. (without pay!)
The amazing think is, the 410 billion spending bill???? They are blaming the earmarks on bush.
AMAZING
Sad thing is they will probably get away with that lie.
They’ll be breaking out the golden parachutes any minute now.
I appreciate that MM criticized bailouts under Bush as loudly as she’s going after the Obama bailouts. But think about this:
People who actually understand the banking economy (as opposed to us web rats) from both parties have decided that expensive bailouts are better than the alternative. Maybe they are right.
Oh come on LGM. Look at the markets to see how “well” it is working.
I have an understanding of the economy. They aren’t right. If their only intent was to save the economy, they would focus on that. You can not add to the debt through stimulus and appropriation, bail out bankrupt companies, kowtow to unions and the cost of billions be bailing out the automakers and then propose tax hikes in a recession and then claim to be saving the economy. They count on people like you to trust them and not ask WTF.
Or maybe they don’t have any more clue about what should be done than anyone else. They don’t seem to have had any success so far.
If I remember correctly, a big part of the problem was people spending money they did not have for things they could not afford. Kind of like what the government is doing now.
Your “Maybe” leaves the strong possibility that “Maybe” they are wrong as well … and judging from the long term economic impact of the congress of 1933 and the damage Jimmy Carter did to our country, it seems it would be much better to be prudent here and not rush in with little or no accountability regarding billions (trillions?) of dollars that are being handed out so freely that somebody eventually will have to pay for … assuming that the impending crash is not fatal.
You are a math professor, crunch the numbers and no matter how you add them up, they add up to a really big debt even without the double digit inflation rates that are on the way. Much too large to be paid off in our lifetimes for certain and likely big enough to cause China to sell off a lot of our debt resulting in even worse devaluation of the (over-minted) dollar … resulting in wheelbarrows full of money to buy a loaf of bread … and the picture just gets worse from there … and that unfortunately, is based on historical accuracy and not assumption.
(Okay, maybe the wheelbarrow was not but the point remains that the outlook is not good no matter how you look at it)
What people are you talking about, lgm? People who “claim” to understand the economy can be dead wrong too! We need to go back and look at what has actually WORKED in the past! Duh.
Obama-wipes
Just more of the same failed policies of predecessor administrations…the FDR and LBJ administrations, that is.
LGM sort of has a point. I’m looking at the current issue of The Economist and on page 9 is a fairly well made point similar to LGM’s.
At the bottom of the page is says “…saving the banks, no matter how underserving they are, is supposed to keep finance flowing to all firms; fiscal stimulus is supposed to lift demand across the board.”
“Suppposed to” are the operative words.
I like that! Maybe ALL new money printed since Obama took office should be called soeteros! Wait a minute, maybe Mr. Soetero is already planning to do just that!
Highly unlikely for 2 reasons:
1. The people that are proposing expensive bail outs are the ones that caused this in the first place.
2. Actual economists have repeatedly said that the bail out is “stupid”
When I have the mental superpowers of Dr Walter Williams saying that this is stupid and suicidal on one hand and Barney Frank blathering and bloviating unintelligibly on the other – I’ll go with the Doctor of Economics
ktnxbai!
Bownie Fwank bwathers and bwoviates! Has kind of a ring to it, don’t you think?
It’s called bankruptcy.
AIG’s loss was a record.
$22.95 per share.
Per share!!! ……that’s remarkable.
and the reason for this “record”???
It’s because instead of AIG going bankrupt, the gov’t pumped “record” amounts of money into AIG… so the broken company could have the opportunity to bleed out those funds at an amazing rate.
Want another loss per share “record”? Just give them more money to lose.
Unreal.
That’s no excuse for handing over tons of cash with no directives as to how it is to be spent. There is also no justification for the government taking an ownership stake. There is also no provision for taking an unpartisan look at the root cause.
Finally, there is no justification for adding tons of pork to the stimulus and budget. In tough times, economization is all that much more important. What the Dems are doing is furthering their agenda under the guise of helping us and using this “crisis” as cover.
Who thought that “Americathon” would ever be a documentary?
And who thought that some of the dumbest and most corrupt people on the planet would end up in Congress?
Well duh, he was the model for the dunce hat.
Some of you are making the mistake in thinking Obama and the collectivists are trying to actually help the economy. They are not! They are trying as fast as possible to change the USA into their version of a socialist utopia. (Yeah, I know, some utopia!) They are using this “crisis” as a golden opportunity to install all their socialist policies and make as many people as dependent on the government as possible, consequences be damned.
Let’s see, the alternative would be to repeal the Federal Reserve Act, and take control of our wealth, instead of allowing a private corporation to buy Treasury Bonds, and then loan them back to us at interest.
Oh yeah, there is also the matter of fractional reserve banking… lgm, you are supposedly a math teacher, you know what a fraction is, don’t you?
Are you really so naive as to think that the economy is a force of nature, like the weather? Boom and bust cycles are manipulated, always for a goal. And the goal is and has always been to concentrate the wealth of the many into the hands of the global elite.
Sadly, very few in Congress understand this, and the ones that do either enable it, or are too afraid to speak out about it, or are labeled crazy.
This meltdown is the finalization of the globalist agenda. We worry about a slide towards socialism, but the truth of the matter is, the trap that has been laid is much more nefarious and more dangerous to our liberty than most people are willing to admit.
There is a simple concept that even you might understand, lgm… our liberty, our life, and our happiness, along with the right to pursue it, is granted by our Creator, and not by any man.
The concentration of wealth into the hands of the few is not simply about greed, but rather is is about the power to control every aspect of your life, to decide arbitrarily whether or not you are worthy of that life, and to destroy all vestiges of freedom that you and I have as the “common man”.
I pray for this nation and its’ people, and I weep for what is coming upon us.
Happyscrapper –
It does seem that way, doesn’t it?
Most rational post I’ve ever read of yours.
However… consider this.
Ever wonder why Treas Sec or anyone else doesn’t fully explain the forces at work here and why, in detail, they are doing what thy’re doing?
Perhaps the reason is… they really don’t know.
They don’t know. Remember just a few weeks ago Geithner saying how they would be trying some new ideas and may have to change things as they go along. They really don’t have a clue! But again, with Obama, Pelosi & Reid, it is not about fixing the economy. It is about power.
I’ll settle for doing the opposite of whatever it is they’re doing now. What’s the worst that can happen?
Wasn’t this supposed to be the only administration that could effectively bring about “change?”
IMHO, the banking and financial products industries will never regain self-sufficiency as long as the government uses artificial supports to decide which will survive and which must actually compete; it’s time to let these behemoths fail and/or go into bankruptcy, leveling the playing field so smaller, better run regional banks and insurers can rise up and take their place.
lgm,
I read one of your posts on a similar topic where you thought the stimulus bill was not large enough. I imagine that you are basing this on the misguided concept that the way out of the depression was WWII spending levels. You are forgetting a key part to what made that work: the government coercing or cajoling hundreds of thousands of people to sacrifice for the good of the country. It is much cheaper to feed, clothe, and shelter a human being if you feed them in messhalls, clothe them in uniforms, and shelter them in bunk beds in communal bedrooms (barracks).
Those who were not in the military also sacrificed or volunteered (air raid wardens – whose real purpose was to cut down on electricity use so as to decrease the demand for fossil fuels used to make it), scrap drives, and don’t forget all the rationing of sugar, gas, silk, rubber, etc. Also, don’t forget all the sacrifices made to buy war bonds (I know people who went without new shoes or clothes and spent the money on war bonds instead – they were making an investment in their country surviving a serious socialist threat). Now we will be asked to sacrifice in order to make our country socialist.
What do you think Obama meant when he talked about people having to sacrifice? From his actions (not his words), this is exactly what he wants to happen, and his administration is working actively to make it so.
If pouring money down the rabbit hole didn’t save AIG the first three times, why do they think a fourth dumping will work ?
Just like FDR. His own Treasury Secretary admitted that they didn’t know what they were doing and just tried new things, and it didn’t work! At the end of the first term unemployment was still over 20%.
FDR kept getting re-elected because he committed massive public spending to special interests! He bought re-election!
Bownie Fwank bwathers and bwoviates the USA into bwankwuptcy!
Rush Limbaugh, in his “first ever address to the nation” Saturday, said (parphrasing)…”The U.S. Government works for US, not the other way around. They are there as guardians of the nation, not to change it into their idiological vision for it. It is not their duty, nor their right to alter the constitution and turn this country into a socialist system.” If nothing else, we need to remember that! They are there as servants of the American people, and we CAN fire them! Over the years, the civil servants in Congress have built up a very inflated opinion of their importance and power (As Obama said recently, we are the ordinary people and they are the prominent ones). They need to be take down, not just a few pegs, but completely destroyed and rebuilt with people who remember what the roles of “civil servants” really are. They complain about the “entitlements” of Corporate Executives and how it must stop. Yet, Corporate Executives are in private busines. As for them, the servants of the people and paid for by you and me, it is fine to fly back and forth from work (DC) to home (California) in private jets, and to fly from DC to Chicago for the weekend so the wife can have a romantic Valentine’s Day dinner. I am so sick of the hypocracy these people exhibit by their actions! I want them out! Now! Donald Trump thinks they should be FIRED, and he should know! And another thing…TERM LIMITS!!
Wow! Weawy well thaid!
Well, Because, because… Umm, Just because, dammit.
Hmmm. That sounds familiar.
If pouring money down the rabbit hole didn’t save AIG the first three times, why do they think a fourth dumping will work ?
The mindset of punishing success and rewarding failure is utter madness. The Dow is below 7000, ugh. Where will it stop?
Stop rewarding failure!
Keep spreadin the word!
I suppose it’s really a question of where you put your faith.
Do you put your faith in the government which is largely responsible for creating this mess in the first place by pushing these banks into high risk mortgages? The same government filled largely by people who do not have any business/financial experience? lgm wants to put his faith in the academic economists that Obama has selected to advise him, but why hasn’t Obama talked to the real leaders behind the market? If the President (and Congress) wasn’t so busy vilifying the CEOs and the wealthy, they could be an influencing factor here. Instead, he’s put them all on the defensive and worried about nationalization.
Investors trust the CEOs. Ultimately, that’s why they buy shares, isn’t it? They are putting their faith in the leadership of the company to take it in the right direction. Instead, they now see the government getting involved everywhere and not allowing the market to adjust on its own. Who would invest in any of these banks if they thought it might nationalize? Not many. And the market continues to dive.
Personally, I’d rather put my faith in the capitalist market that made this country great in the first place. When government gets out of the way of business, we all benefit. If the market continues to plunge, so too will all of the liberal pork programs.
This class warfare on the wealthy has got to stop. Jealousy of these individuals does not change the fact that they are the true job creators of our country, not the government.
There should be no doubt in your mind that they will take all that they can from us in the meantime. I do not see anybody waiting for our grandchildren to get paid. They want it all and they are working really hard at taking it all right now! I seriously doubt that they have even considered the future … at least not beyond the next eight years, and maybe if he destroys enough, he figures he can just stay in office and keep it!
Unemployment at 10% in california.
Obama’s policies at work!! (or not)
Stocks trade on a multiple of potential earnings. As of today, 31% of the S&P companies are below book value.
The rational behind all this is that AIG is too big to fail. Problem is, it already failed. From $52/share to $.43/share in less than a year. The latest bail is a classic good money after bad scenario. Will it recover? How many people here would buy insurance with AIG? Will they be able to pay a claim? Who would buy stock, even at fire sale levels? Heh, right.
1)FYI, AIG is not a bank.
2) Who would these “people who actually understand” be? There is no historic or even theoretical precedent for this mess. Cluelessness is the operative word.
3) “…have decided…” Where is this alledged consensus? Economists are across the board, on both sides.
Let AIG go down. The market will recover. It always has and always will.
“If all economists were laid end to end, they would not reach a conclusion.” – George Bernard Shaw
we can all look forward to the 3rd world war to get us out of this disaster. unfortunately i don’t think our government has the gones to win a war, because it isn’t politically correct, and the housefrau teachers would not like it. but that just means we will become citizens of the greater china empire. one good outcome, we won’t be wasting 2.5m dollars on a death penalty conviction and 65k per year for 20 years to incarcerate them and hope they die of old age before we actually execute them. 1 day trial, 1 day to parade them around the streets with a sign on their heads saying they are to be executed for back talking the politburo, and the next day a bullet in the back of the head. see how efficient those chinese are.
“Whenever a person believes his security is in his job or his government rather than in himself, he’s placed his well-being in the hands of others, where it should never rest!” I wrote that quote down MANY years ago and never forgot it.
P.S. I don’t know who said it!
AIG is too big to fail because they underwrite about 90% of all aircraft insurance in the world. If they go bankrupt, the entire world’s airline industry shuts down. The regulators need to seize AIG, isolate and distribute the “too big to fail” components and write off the rest of the worthless “alternative investments” junk.
The government already owns 80% of AIG (we are not allowed to use the word “nationalization”, it’s the new “N” word) so why not just seize the rest and just finish the job?
Pasadena Phil;
I agree, but again the “too big to fail” idea is fallacious. As you said, others can and will pick up the airline market.
Putting more government money in assures the inevitable failure it is intended to prevent. Confidence is the key for any insurance entity, (or bank for that matter)and AIG is close to zero.
How many more billions of dollars in (the illegal redistribution of) government subsidies would this save us?
Can anybody say two birds one stone?
One of the most important criticisms we use to make on how the Japanese handled their bank failure in the early ’90s was that they wouldn’t slay their zombie banks. Yet here we are creating an entire zombie economy. The government simply refuses to fix even the simplest things.
How hard would it be to simply re-instate the uptick rule on short selling for instance? Why does it need to be “studied”?
Why not come right out and declare that most of the Glass Steagall Act (another dirty word these days) will soon be restored? There is beautiful efficiency in keeping inherently conflicting interests apart that requires minimal bureaucracy to police. Just kee[ commercial banks, investment banks and insurance companies separate!
We need to go back to making a distinction between regulation and bureaucracy. Proper regulation is efficient and so is good. Bureaucracy is inefficient and so, bad.
So after all this time of finger pointing and wagging, you’re actually saying that President Bush and his administration were right on the economy?
If you are, and there really is no other context in which to place the above statement, then doesn’t that make Obama…Bush III?
nj aviator and pasadena phil, right on! if you let them go bankrupt and disappear, the stockholders are out, but not the citizenry. then every entity who insures through aig will switch insurance to someone else, lloyds of london, pay higher premiums, and mind their loans better, and the crisis winds to an end. people who can’t afford to buy homes in california, move to houston. people who can’t afford to buy a house, rent. people who have saved buy a second home now that they have become rational again. the economy moves forward. but if some group steps in and confiscates the savers money and gives it to the losers in life, and those failing entities which are just too big to fail, then you have japan in the 90’s, the world in the 30’s and life in america for at least the next 4 years.
I’m with ya across the board, but regulation is now in the hands of Frank and Dodd et al. Sigh.
I lost 67 billion last quarter. Let’s see, if you’re an insurance company how do you do that? Everybody you insure wrecks their car and has their house burn down. No, that’s not it. Hmm, all those office buildings you bought as investments fell down. No, no, hmm, oh yeah – you were speculating in the markets and the markets went down. So instead of cutting your (now our) losses and taking over your office buildings and insurance policies we add more money to the pyre…
Yeah, Obama’s the smartest guy ever to be President. (This week maybe…)
Slightly OT- Gordon Brown is looking to “convince” Pres. Obama to forge a relationship which leads to a “Global New Deal”.
Yep, they want to take the Roosevelt model to the world. Ten years of Global depression without “9 old men” to finally put an end to it. Brilliant.
source
Hey, where are the libs to tell us what a good idea this is?
I’m not picking on ThatSamIAm, he was just the first person to post anything
I don’t know why everybody is so concerned about this.
Unless you make more than $250,000.00 a year the One is going to give you money. The fact that we’ll all be serfs working for the One and his minions is immaterial. The One will watch over us.
Now lets all join hands and sing Kumbaya:
Kumbaya, my Lord, kumbaya
Kumbaya, my Lord, kumbaya
Kumbaya, my Lord, kumbaya
O Lord, kumbaya
More than speculating, Vegas. AIG sold over 300 Bil in Credit Default Swaps, (Insurance against mortgage backed securities failing) and did not have the capitol to back them. They did not believe the securities could fail. You did not even need to own the securities to purchase a CDS. These were new “financial products” and not even regulated.
I wish this guy was my neighbor…
I’m not into exotic paper – if we closed that end of AIG down – wouldn’t the losses stop? (I mean someone would be out their own money, but it wouldn’t be our problem? Just asking…)
Most of the people who post here are more qualified to save the economy than Obama, and they sure have a heck of a lot more common sense!
Bueller? Bueller? ……
Me too. Even if I didn’t have a good understanding of how the economy works, I know one thing.
Free markets have no agenda.
You mean common sense. Not so common these days. I thought insurance was about managing risk. Whoda thunk?
Edited version of a letter sent to my pro-partial birth and live birth infanticide Obama loving brother, who believes George Bush is Hitler, frequented the Kansas City Indy Media site and used it as ’sources’ in our e-mail disagreements, and detested the Geirge Bush military, even while working as an engineer for a contractor at the Lake City Army Ammunition plant.
………………………..
I think we’re about a year away from us living off xx wife’s name xx teacher income. But we’ll be saving on daycare. Maybe I can bus tables on the weekend.
The Dow has dropped below 7,000 as more of the investor class realize the economy is being run by Marxists dedicated to destroying capitalism, and replacing ‘trickle down’ prosperity with ‘trickle up poverty’.
BTW, did Charlie know the top 2% in earners (not the top 2% of the rich, the DWI Killer Senator Kennedy and Senator Rockefeller inherited their money, and never worked for it) pay 40% of the taxes already? The top 5% almost 60%? The bottom half of Americans don’t pay income taxes at all? But somehow confiscatory rates on those that produce most of the wealth is somehow going to help those who already pay no taxes.
Change!
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War Has Been Declared on U.S. Energy
Obama’s budget ends the IDC deduction for oil companies, ends depreciation and depletion, and ends royalty relief for the deep-water Gulf.
Oil exploration is a risky and expensive business. Intangible drilling costs (IDC) being treated as an expense meant that oil companies could charge the capital cost of a well, the drilling rigs (thousands a day for the type drilling the North Texas gas wells), drilling fluids, the cost of cementing pipe (”casing”) into the hole, the cost of an on-site geologist and/or electric line logging to find potential pay zones, and the cost of ’stimulating’ the well with acid or high pressure fracturing with a sand slurry, against the revenue the well would generate. A DFW gas well can easily cost over five million dollars, and a tax deduction on that would be worth the corporate tax rate times that expense. Obama is basically ruling that gross revenue, not income, is taxable. It won’t stop oil and gas drilling in the country entirely, but it will sharply curtail it, and cause higher oil prices. Natural gas prices, because gas is difficult to import, will go even higher. Obama is also ending deep water (ie, high risk) royalty relief in the Gulf of Mexico. Which means a lot of projects will no longer meet risk adjusted hurdle rates of return. Again, less domestic supply, and sharply increased unemployment in the oil and gas business.
The Fresh Prince of Bill Ayer’s has decided that all of the oil companies revenues are taxable, with no deductions for things like drilling and exploration expenses.
I expect BHI and HAL to be penny stocks, in danger of de-listing, soon.
I can think of one Demonrat in the Senate, Landrieu, from an energy state. But budget bills are not subject to the filibuster, and this will pass.
BTW, Obama’s Global Warming Czarina Browner, whose picture disappeared from the leadership page at the Socialist International web page the day before she was tabbed, has targetted an 80% reduction in fossil fuel use in 40 years. No mention of nuclear power, and, in fact, Obama has signed an order that Yucca Mountain won’t be used as a storage site. Windmills and solar cells and Priuses and Coopers won’t come close to covering the difference. (Heaven help people with more than 1 child who have to drive those Coopers). I dare say its Pol Pot living on a commune and planting behind cattle driven plow time.
Swede: on your comment #80.
That is exactly right. It’s not the insurance business that took AIG down, it is that they played “Balance Sheet Bingo” with these “alternative investments”.
A very important point about this mess that is being completely ignored is that the vast majority of American banks escaped ALL of the subprime mortgage mess and yet are being destroyed by the political “solution”. That is truly a shameful tragedy.
The banking system is not failing because of widespread abuse across the industry but because of massive abuse by a handful of politically active “banks” that got too big as a reward for selling out to Congress’ “ownership society” mandate.
Again, this is the strategy as outlined by Trotske. Create your own – Higher Need, to use as a whip to keep the proletariat in line.
A good sign: the spin coming from DC is very defensive. “As bad as the market sel-off has been, it would have been much worse without the various bailouts”.
Get used to it. We will soon be hearing that porkulus didn’t fail although it didn’t create a single job. “It saved 3-4 million jobs.”
There is simply no room for factual arguments in these new Dark Ages.
What the crap….every day I hear more sordid details about some appointee of the One. Doesn’t anyone believe in vetting any more? Are ALL the media in this entire country in the tank? Is no one going to stand up and call him on his corrupt choices? We are being led by a socialist president with a socialist cabinet. Everyone needs to read Saul Alinsky. He was Obama’s idol and intellectual mentor back in college. He said that in a college paper. Saul Alinsky was a very bad dude and it surely sounds like Obama wants this country to be made in Alinski’s image. Again I paraphrase Rush…The POTUS is supposed to be the guardian of our liberty and protect and defend our constitution. He is doing exactly the opposite! He is a traitor.
Not in economics, science, politics – nowhere. They are “true believers” and will shout down anyone who disagrees. They are all about affect rather than effect.