Safe Mode: On
Feds Bail Out A.I.G

Media reports are casting the government's decision to effectively rescue troubled insurance giant AIG with an $85 billion loan in exchange for a close-to-80% stake in the company as a surprise move, an indication of the continuing peril and uncertainty in the financial sector. The Los Angeles Times calls the move "the largest single financial intervention in the nation's history and a measure of the depths of America's financial crisis." On its front page, the New York Times calls the government's move "the most radical intervention in private business in the central bank's history," a step taken "to avert a possible financial crisis worldwide."

The Washington Post calls the Fed's move "a stunning turnaround," while USA Today says it was a "stunning decision," coming "just days after the Treasury and Fed refused to bail out investment bank Lehman Bros., which filed Monday for the largest bankruptcy ever." The Wall Street Journal refers to it as "a dramatic turnabout for the federal government, which has strongly resisted overtures from AIG for an emergency loan or some intervention that would prevent the insurer from falling into bankruptcy." The Financial Times says AIG shares "fell 21 per cent in New York to $3.75. It was not clear how an intervention would affect equity and debt holders."

The AP notes White House spokesman Tony Fratto said last night, "The President supports the agreement announced this evening by the Federal Reserve. ... These steps are taken in the interest of promoting stability in financial markets and limiting damage to the broader economy."

The Los Angeles Times reports the government's "potential ownership of AIG could put policymakers at cross purposes with their own efforts to regulate a variety of financial transactions in which the company participates."

Reporting on the impact of AIG's woes, the Wall Street Journal says "fears are growing that institutions around the world could be slammed with billions of dollars in write-downs or losses if AIG is allowed to fail, which may cause the debt insurance it provided to disappear."

The Washington Post reports, "With more than $1 trillion in assets, AIG is bigger than Fannie Mae, Freddie Mac, Merrill Lynch, Lehman Brothers or the former Bear Stearns." The Post adds "analysts say most of AIG's businesses are, on their own, in fine financial shape. But what is happening on Wall Street is at the root of AIG's troubles."

Paulson, Bernanke Brief Lawmakers The Washington Post reports Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke "traveled to Capitol Hill Tuesday evening to brief congressional leaders on the government's plan for AIG. A source said Paulson and Bernanke explained that AIG would be put into conservatorship, which would allow the federal government to operate the company on a caretaker basis." Sen. Chuck Schumer said after the meeting, "The administration is approaching an unprecedented step, but unfortunately we are living in unprecedented times." The Politico reports "Paulson and Bernanke weren't seeking new legislative authority from Congress but clearly they wanted some political blessing from lawmakers."

Bush Cancels Statement On Markets The AP reports this morning, "With little explanation, President Bush on Tuesday scrapped a statement he planned to give on the tumultuous financial markets, abandoning any press coverage of his meeting with key economic advisers as more developments roiled Wall Street." White House spokesman Tony Fratto "said only, 'We decided it would be best to limit public comment about markets today,'" and "declined to offer any explanation."


Click to view image: '227265-vlcsnap4350534.jpg'

Added: Sep-17-2008 
By: Smegma
Tags: A.I.G, AIG, Federal Reserve, Bailout, Corporate Wellfare, Socialism If Youre Wealthy!
Views: 8974 | Comments: 6 | Votes: 1 | Favorites: 0 | Shared: 1 | Updates: 0 | Times used in channels: 1
You need to be registered in order to add comments! Register HERE
Sort by: Newest first | Oldest first | Highest score first
Liveleak opposes racial slurs - if you do spot comments that fall into this category, please report them for us to review.
  • More Bailout for the Greedy, the Mepublicon's have really trashed our economy, I don't know if anybody can stop this, but I do know McGoober can't, he don't even have a plan

    Posted Sep-17-2008 By 

    (4) | Report

  • Comment of user 'OwenHiggins' has been deleted by author (after account deletion)!
  • Don't worry. The Palin gimmick has run it's course. Latest poll puts Obama in the lead by two points -

    Posted Sep-17-2008 By 

    (1) | Report

  • My firm's office is moving and the new space is a former AIG office. I asked the lease agent what happened to the AIG employees and he said he promised not to disclose any information on the business. I guess this explains evertyhing lol.

    Posted Sep-18-2008 By 

    (0) | Report