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AIG: Thank You America, But We May Sue You

No, Its WAAAAAAAAAAAAAAAAAAAAAYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY past time to have looked the "too big to fail" arguements and called them what they are, Bull****. With a capital B and a capital S.
1) What do you think the “too big to fail” position asserts?
2) Exactly how do you propose to assert that it is BS?
 
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Against all bailouts. AIG can try to make a case, good luck getting a judge convinced they were harmed by the bailout plan put forth when there were no other options but bankruptcy. AIG shareholders saved a good deal of money by having a continuing valued investment instead of a one time payment.
 
1) What do you think the “too big to fail” position asserts?
2) Exactly how do you propose to assert that they are BS?

1) It asserts that there exists in our country businesses that are too large either physically or fiscally or both to be allowed to fail because of percieved negative effects on the national or state economy. Thats the nutshell version.
2) I dont propose they are BS, they are in fact BS. There is absolutely no business too large to fail in this country. In fact I would go even further and say that no business can ever be to large to fail. Businesses fail primarily because they have cash flow and reserve problems. How they got to that state is immaterial. What is material is that bankruptcy is specifically for these sorts of situtations. Bankruptcies can either liquidate the company and its assets or restructure their debt such that they can feasably recover and pay back the debt they owe. Bankruptcy is opportunaty for other investertors to come in and purchace a company or its assets at a discount and take over the niche the company being liquidated formerlly occupied, or it allows the company to retsucture its debt obligations in such a way that it can keep operating and forseably pay back its creditors. Bankruptcy happens all the time in this country to very large corperations. The only difference were these corperations that were bailed out were politically connected and screaming bloody murder. There was NO reason at all to bail out ANY of these companies via the goverment. All of the whining about how the country would have went into a recesion if they were not helped is a crock. Most of those companies if not all of them would not have been liquidated but restructured. In other words they would still be in business. That whole bailout fiasco was a crock. Totally and completely unnesseary.
 
Hooray for AIG!!! Bust that socialist pig out of office. Humiliate Obama and Biden every chance you get. Wall street rules! The "Great Re-Distributor of Wealth" made to look like that arrogant socialst swine that he is. God is a Capitalist. Money is to be earned not given.
 
No business (including our government) is too big to fail, and in many cases they need to fail, if the industry and or that company can be profitable, then it will be bought up by investors re-organized and be made profitable again. New management will avoid the same pitfalls that brought the company to it’s knees, and the cycle will begin again…. A government bail out only allows companies to be mismanaged and not worry about what could happen, because they know their actions hold no consequence to success or failure. Succeed and become a millionaire with bonuses and salary, fail and become a millionaire with bonuses and salary, because the government will guarantee it. That is what to big to fail promotes.
 
1) It asserts that there exists in our country businesses that are too large either physically or fiscally or both to be allowed to fail because of percieved negative effects on the national or state economy. Thats the nutshell version.
There-in is part of the problem, that nutshell is missing a very important part. It is better put that they are too large and critically interconnected within the economy to fail and be dismantled safely with the current legal system to do so.

We (the royal we ;) ) have already faced “too big to fail” at wide scale, a prime example being back in the late 1920’s and early 1930’s. The response, after the initial laissez-faire (with a very poor outcome), was in part to institute the FDIC for banks. There was already bankruptcy laws on the books but they proved insufficient for the banking industry, as the economy had evolved and progressed in using them. The problem had to do with both speed at which the bankruptcy was executed (so assets could be divided and dispersed) and the level of insolvency that the banks could reach (thus shortage of assets to pass out to creditors), coupled with their tight ties though out the economy. It was not a matter of ensuring a bank would never fail, it was a matter of having a better chainsaw (and authority to use the chainsaw) to chop it up and move on quickly coupled with triggers and boundaries to keep the job at a size that the chainsaw could handle.

And it worked [well], and continues to work, for 80+ years for the institutions that it was targeted at.

What has happened is that AIG, and others such as Citibank, blurred the lines with the banking industry (and partially due to particular dismantling of key aforementioned boundaries were allowed to blur the lines) and also became similarly key, widely interconnected components of the economy. But we did not build the chainsaw for them, as they exist. Citibank is only partially a bank. AIG never was a bank (although there were insurer rules that they sort of colored outside the lines on). Why AIG was/is so critical has to do with the role of insurance in our economy, and the level of marketshare that AIG had. If those policies, Trillions of dollars worth, fall our economy grinds to a halt. Maybe you do not understand this but it is the case, and I will save time by not going into it.

So now we need a bigger chainsaw (and accompanying rules of operation to keep the chainsaw relevant, maybe requiring some partial dismantling of existing problem children). Thus we can within a few days shutdown, chop up, and move on from say Citibank or AIG failing in the same way that we do 100’s of times a year with banks like Joe Sawbuck’s First National Bank of Duluth.

Presto, no more “too big to fail” without removing the [critical] scenario of failing.
 
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If I were the gov I would counter sue AIG for wasting tax payer money.
 
There-in is part of the problem, that nutshell is missing a very important part. It is better put that they are too large and critically interconnected within the economy to fail and be dismantled safely with the current legal system to do so.

We (the royal we ;) ) have already faced “too big to fail” at wide scale, a prime example being back in the late 1920’s and early 1930’s. The response, after the initial laissez-faire (with a very poor outcome), was in part to institute the FDIC for banks. There was already bankruptcy laws on the books but they proved insufficient for the banking industry, as the economy had evolved and progressed in using them. The problem had to do with both speed at which the bankruptcy was executed (so assets could be divided and dispersed) and the level of insolvency that the banks could reach (thus shortage of assets to pass out to creditors), coupled with their tight ties though out the economy. It was not a matter of ensuring a bank would never fail, it was a matter of having a better chainsaw (and authority to use the chainsaw) to chop it up and move on quickly coupled with triggers and boundaries to keep the job at a size that the chainsaw could handle.

And it worked [well], and continues to work, for 80+ years for the institutions that it was targeted at.

What has happened is that AIG, and others such as Citibank, blurred the lines with the banking industry (and partially due to particular dismantling of key aforementioned boundaries were allowed to blur the lines) and also became similarly key, widely interconnected components of the economy. But we did not build the chainsaw for them, as they exist. Citibank is only partially a bank. AIG never was a bank (although there were insurer rules that they sort of colored outside the lines on). Why AIG was/is so critical has to do with the role of insurance in our economy, and the level of marketshare that AIG had. If those policies, Trillions of dollars worth, fall our economy grinds to a halt. Maybe you do not understand this but it is the case, and I will save time by not going into it.

So now we need a bigger chainsaw (and accompanying rules of operation to keep the chainsaw relevant, maybe requiring some partial dismantling of existing problem children). Thus we can within a few days shutdown, chop up, and move on from say Citibank or AIG failing in the same way that we do 100’s of times a year with banks like Joe Sawbuck’s First National Bank of Duluth.

Presto, no more “too big to fail” without removing the [critical] scenario of failing.

I am quite conversant in business and investing matters.

Chainsaw? Please clairifie what rules are needed besides the standard bankruptcy rules.

First AIG. AIG is a very large insurer in this country if not the largest. But they are by no means the only insurer. Any policies bonds ect they had in place would have most likely been replaced by another insurer abet at a higher premium most probably. Any investments had by anyone with AIG most likely would only net a partial return of their intial outlay. Note this is only if the company was liquidated. Otherwise the debts AIG had would have been restructured. I fail to see how AIG's bankruptzy would have severerly effected the national economy for any length of time. It would primarirly be an inconvience to those with bonds and insurance policies having to scramble to get new ones. Again that would only have been if they were liquidated.

Citibank could have been handled like it was a bank or regular bankruptcy. In either case a bailout was unnesserary.

Too big to fail is and was a foolish notion. Bailouts should NEVER be an option by the government.
 
I am quite conversant in business and investing matters.

Chainsaw? Please clairifie what rules are needed besides the standard bankruptcy rules.
Can I ask, given your vast coversancy in business and investing matters, what do you think the difference is between a bank in the US going bankrupt and, say, Borders Group, Inc. going bankrupt?
 
Can I ask, given your vast coversancy in business and investing matters, what do you think the difference is between a bank in the US going bankrupt and, say, Borders Group, Inc. going bankrupt?

Primarilly the depositors into the bank. They may lose a portion or all of their deposite. Satified?
 
Primarilly the depositors into the bank. They may lose a portion or all of their deposite. Satified?
Well I am satisfied you really do not understand the difference with how FDIC covered institutions are handled from run-of-the-mill corporations. :D

To answer: “Chainsaw? Please clairifie what rules are needed besides the standard bankruptcy rules.” I would normally say, “Roughly speaking, similar powers that the FDIC has to deal with banks.” But that, it appears, would be lost on you. You do not understand how quickly banks get processed, both in terms of point at which insolvency is determined [by an outside party] and from there how quickly the assets are moved and accounts settled. But here, I will give stepping back to that point a try;

To be a bank you agree to certain rules that are extra-ordinary compared to regular corporations. Asset and operation seizures that simply would not be tolerated by a court normally are routine with banks. Although this does not preclude suits, there is much wider range given for things like the AIA sale named in this suit, and even less likely for a judge to issue an order blocking the action from being taken rather than just letting it happen and sort it out afterward. The turn around can be hours or maybe a few days. It is lightning fast, rather than the months (or years) of sitting is financial limbo that normal corps can.
 
One things for sure Elizabeth Warren is going to have an hay day! :mrgreen:
 
If I were the gov I would counter sue AIG for wasting tax payer money.

The government is in breach of the fifth amendment pretty blatantly here. Just like they breached the fifth amendment by taking up shares of GM when they bailed them out.

They didn't waste the money either considering the taxpayers came out ahead.
 
AIG: Thank You America, But We May Sue You - Forbes
un****ingbelievable
AIG would be nothing but a memory had the government not (wrongly) chosen to shore it up so that it could pay out the extensive claims due during the meltdown
but now it is contemplating joining in a lawsuit filed by its former CEO (the one responsible for its financial quagmire) against the USA
and here is the basis:
the bailout provided funds so it could pay out is obligations 100 cents on the dollar (when it was over extended by Trillions)
and
AIG was forced to sell some of its prized assets

how dare we make a loan to a company and also condition that loan such that AIG was required to sell something of its own to be able to afford to pay its just obligations!

if AIG enjoins this suit against our nation, it will exhibit more gall than even charles degaulle

Imma walk waaaaaaaaaaaaaaaay out on a limb here and say that maybe AIG is blowing smoke as a defensive tactic because some of the major rat bastards involved will be indicted in the not too distant future. The climate may be getting riper to finally charge those treasonous, greedy, sumbitches and other banksters and Wall Street slime for the crimes they committed against the nation, and charge them well. For those and other reasons I am thinking this may be a defensive maneuver.

There are some time tested verities. One is that "Payback is a mother****er".
 
The government is in breach of the fifth amendment pretty blatantly here. Just like they breached the fifth amendment by taking up shares of GM when they bailed them out.

They didn't waste the money either considering the taxpayers came out ahead.

If AIG sues the gov they'll be wasting our money in court, not even considering a settlement.
 
Primarilly the depositors into the bank. They may lose a portion or all of their deposite. Satified?

Read up a bit about the Depression and you may come to understand that banks and credit are not like other businesses that we can blithely let go under.
 
The government is in breach of the fifth amendment pretty blatantly here. Just like they breached the fifth amendment by taking up shares of GM when they bailed them out.

They didn't waste the money either considering the taxpayers came out ahead.

Since the shares were worth nothing, your argument doesn't hold water. Nobody was willing to buy GM stock; it was going to be sold off in an asset sale and disappear. So the government "took" worthless stock and made it valuable again.
 
The government is in breach of the fifth amendment pretty blatantly here. Just like they breached the fifth amendment by taking up shares of GM when they bailed them out.

They didn't waste the money either considering the taxpayers came out ahead.
here is the complete text of the fifth amendment; please share with us the blatant breach committed by the US government:
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
 
Since the shares were worth nothing, your argument doesn't hold water. Nobody was willing to buy GM stock; it was going to be sold off in an asset sale and disappear. So the government "took" worthless stock and made it valuable again.

My argument is not dependent on the value of the stock, but instead the existence of the stock being taken by the government. I'm sorry, but the government did not have the authority to take the stock, period.
 
My argument is not dependent on the value of the stock, but instead the existence of the stock being taken by the government. I'm sorry, but the government did not have the authority to take the stock, period.
First off, they were purchased, as in funds were paid AKA invested. Second off, loss of ownership (stock) by stockholders is standard, and zero payout common, when a company goes bankrupt. They are last in line for payout. Are you seriously questioning the Constitutionality of bankruptcy law via the 5th?

Cripies on a bike.
 
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First off, they were purchased, as in funds were paid AKA invested.

It doesn't matter if they were purchased. The terms of the sale was forced on the seller.

Second off, loss of ownership (stock) by stockholders is standard, and zero payout common, when a company goes bankrupt. Are you seriously questioning the Constitutionality of bankruptcy law via the 5th?

Yes. Without a choice to accept their compensation they are just getting whatever they desire from me by throwing cash in my direction regardless if I want to sell or not.
 
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AIG: Thank You America, But We May Sue You - Forbes
un****ingbelievable
AIG would be nothing but a memory had the government not (wrongly) chosen to shore it up so that it could pay out the extensive claims due during the meltdown
but now it is contemplating joining in a lawsuit filed by its former CEO (the one responsible for its financial quagmire) against the USA
and here is the basis:
the bailout provided funds so it could pay out is obligations 100 cents on the dollar (when it was over extended by Trillions)
and
AIG was forced to sell some of its prized assets

how dare we make a loan to a company and also condition that loan such that AIG was required to sell something of its own to be able to afford to pay its just obligations!

if AIG enjoins this suit against our nation, it will exhibit more gall than even charles degaulle

You know they wrote a song just for them?

 
Just a couple of observations:
The government can force a sale. It is called imminent domain.
The government did not decree that GM sell stocks to Uncle Sam or go bankrupt. Market forces and dunderheaded management mistakes did that.
There are plenty of real attacks on the Fifth Amendment without inventing some that don't exist.
 
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