I was right and Obama (and Bush) were wrong

Discussion in 'Politics' started by Wyldgusechaz, Mar 18, 2009.

  1. Wyldgusechaz

    Wyldgusechaz New Member

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    I said based on the size of the bailout, we could have given every man woman and child in America between $5000 and $10000. Free. And we could have voided any payroll taxes for 6 months.

    Now if you were a gay man and his partner, you would have recieved between $10000 and $20000 for your household. Would you have cared, given that you were now richer by that amount and getting richer due to reduced income taxes, if AIG or Citibank or GM or Bank of America or Credit Suisse or any hedge fund went belly up?

    I think not. Instead we are faced with an administration (who I think is very honest) mired in deception because government should not be in he business of running failed companies. Obama and his staff look like poster boys for folks who have fallen off turnip trucks.
     
  2. pym

    pym New Member

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    Perhaps this would be an excellent time for YOU to resurrect the BROWN SHIRT party. Heck.....it's nearly an identical set of circumstances, now as then. I'm sure you will find plenty of dis-enfranchised stooges to rise up to your 'IDEALS'. Yah?

    STURM und DRANG!
     
  3. tonybits

    tonybits Well-Known Member

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    The problems stems from a lack of concern from every executive for this situation. The only reason for government involvement is that there has not been the proper controls to begin with. Greed has been the only reason for this problem (ie. approving subprime loan that should never have been given to begin with, working on price margins for a profit of 12,000 each SUV instead of promoting a 6000 profit on a compact car, and the list goes on). Bonuses, compensation, or what ever term they want to use are for above and beyond performance, not a guarantee. If the company makes losses, you do not get anything extra, period. Just my 2 cents.
     
  4. javyn

    javyn New Member

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    No arguments here. Even though pym is obviously sticking by his homey, who is obviously on the side of big business and rich executives rather than being on the side of America.

    edit: pym is a lot like the redneck fundamentalists who stuck by Bush no matter what, same type deal. Don't bother talking reason to him, all he can do is spout off total nonsense or baseless accusations like he's doing here.

    He's the liberal answer to the close minded conservative moron. See they exist on both sides.
     
    #4 javyn, Mar 18, 2009
    Last edited: Mar 18, 2009
  5. B_starinvestor

    B_starinvestor New Member

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    Well said, Javyn.
     
  6. houtx48

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    the government should not be running businesses for profit, they have no concept of what that is all about.
     
  7. javyn

    javyn New Member

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    BTW Pym, how can you explain Obama signing an executive order on March 9th saying it's OK for federal funds to go to stem cell research....

    Then on March 13, the signs a law BANNING it. I'd like to see you try to defend your homey on this flat out lie.

    CNSNews.com - Obama Signs Law Banning Federal Embryo Research Two Days After Signing Executive Order to OK It

    Seems to me Obama told the people what they wanted to hear, then turns around 2 days later and sells out to big pharma.

    Way to go! Hope and change woo!
     
  8. Flashy

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    how do you figure that based on the size of the bailout?

    your figure of between "$5,000 to 10,000" for every man woman and child is totally off, and equates to a bailout on the order of 1.55 - 3.1 trillion dollars not to mention we could not have "voided payroll taxes for 6 months" at the same time

    the real cost of the bailouts, estimated by the WSJ, is 1 trillion dollars, which equates to roughly $3,660 per every man woman and child.

    and how exactly does being gay, factor into any of this?
     
  9. Moez???

    Moez??? Active Member

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    wasn't the reason for the bailout of banks because companys pay their employees all over the country with loans they take from banks, and then pay back those loans when they announce their profits? an example would be retail places. they make a huge chunk of money during the xmas season. but it's slow as hell during feb-april. during the feb-april slump, they take loans to pay their employees, until the shopping picks up again in the summer.

    since the banks went under so quickly, and all at the same time, it would've been devastating to those employers. but now that they see that the tax payers will stomach bailouts, every company is trying to get what it can take.

    what would've been a better idea? let the government give out loans to the companies that relied on AIG. when those loans would be paid back, the government would make money, and no money is lost on the taxpayers.
     
  10. pym

    pym New Member

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    At work rite now......will respond to this tonite.....in meantime, please find this story in a more mainstream news source for me to debate. CNS? What is that? the rolox equivilant of a rolex? I checked the recommended reading link........WOW! ANTI-LIb or what? Talk later.
     
  11. Wyldgusechaz

    Wyldgusechaz New Member

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    From today's WSJ, editorial *Mr. Wens Debt Bomb*

    ""Mr Obama's stimulus plan and new budget will require $3-4 trillion new borrowing over the next 2 years...""

    I like my figures. The gay reference was to make it real for a lot of folks here. I could have easily referenced it to a single mom and her 3 kids and come up with about $20000-$40000 for her family.

    Does it really make any difference? How about indexing so no one who makes over $250K like me would get anything. Give mine to the single mom and her 3 kids. Point being, if the people have more money to hell with Citibank and AIG.
     
  12. B_VinylBoy

    B_VinylBoy New Member

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    The problem that arises with a lot of these so-called independent thinkers is that they usually cannot find a person to rally behind or push to further spread their message. And in the rare cases that they do, the person turns out to be just as corrupt as the Democrat or Republican they claim to hate, if not more. Makes it really difficult to take some of their relentless rants seriously.
     
  13. Flashy

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  14. Wyldgusechaz

    Wyldgusechaz New Member

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  15. Flashy

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    -because AIG is responsible for over 81 million insurance policies worldwide to avariety of companies and individuals that are worth nearly 1.9 trillion dollars
    -because much of the insurance and counterparties their derivatives are provided to, are massive corporations and banks, who, without the money owed to them, would be devastated by the losses and debts they have suffered from the sub-prime debacle. The european banking system was effectively saved by our government back in September, with the original bailout. Some of the biggest banks in Europe are the counterparties to AIG's debt and insurance instruments.


    AIG Financial Products (the derivatives unit) insured 513 *BILLION* dollars worth of debt against that debt's default (using credit default swaps)

    roughly 300 billion of it (294) was corporate debt insured against default.
    roughly 141 billion of it was European Residential Mortgages
    roughly 78 billion was CDO's (which included sub-prime)

    because AIG had the highest credt rating possible, based on its corporate strength, it was not required to actually put up collateral for any of these debt instruments/policies.

    but when the housing markets began to tumble, and the defaults started to happen, these insurance policies/debt instruments began to be called in by those who had bought them...as this began to happen, AIG began to need more and more money to cover these.

    Then their ratings continued to be knocked down by the ratings services, which meant that they could then not keep borrowing, and that is when they had to go to the government in Septmeber.

    everyone involved in having "insurance" against default, stood to lose all that "insurance" if AIG couldn't pay...not to mention those in general insurance against floods, disasters, fire and all the regular polices AIG writes would have been vulnerable too. They'd have no coverage.

    When you write out these "options" you collect a premium, so it was easy money for AIG to get every year, since the companies they were insuring were high hquality corporate bonds and debt instruments.

    The derivatives unit was making huge profits for the company as a whole, and the premise was that AIG was so huge and had such high resources, the likelihood of a disaster of ever having to pay these off was low...

    but the people that bought these products were investment banks, corporations, hedge funds, huge pension funds, states and municaplities (like California and Virginia were the biggest)


    but then the subprime disaster hit



    now, the fact is, if there was a "run" on AIG and their insurance policies, it would cause systemic failure here and in Europe, because there simply would not be enough money to pay out.

    Life insurance companies are the largest holders of Bonds of any industry (Federal and Municipal) and they would have to sell and sell and sell all their bonds to cover all the redemptions of policies...

    this would crush the bond market, effectively locking it up the way the credit markets were a couple months ago. frozen.

    not to mention, people who had originally had policies, for things like health, would not be able to get comparable coverage from another firm at the same rate, with AIG gone, and a rise in premiums needed.

    it would be an utter calamity.

    Letting Lehman fail really upset the markets cause of the shock, but it had very little effect itself in the grand scheme of things.

    AIG's failure would absolutely crater the world economy.
     
  16. B_New End

    B_New End New Member

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    Fuck yeah!! Lets do it!! I'm all for mob rule now. Burn those god damned banks to the ground, starting with AIG. I am tired of being fucking raped. Where do I sign up for the new brown shirts? We can start with the banks, and end in D.C.
     
  17. Wyldgusechaz

    Wyldgusechaz New Member

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    Then we have allowed a situation to occur whereby a company is too big to fail. What is to prevent the next company that is too big to fail from realizing exactly that and them playing fast and loose with the rules to generate huge short term profits cushioned by public risk? Even the liberal dolts here could make huge dough if only the tax payer bore the risk.

    AIG was an insurance company being run like a hedge fund per Liddy. It needs to be punished. This is an invitation for the government to stick its nose into all companies.
     
  18. Flashy

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    I don't disagree that we are between a rock and a hard place with the decision on whether to let it fail or not.

    but you cannot say "we have allowed" a company to get to big to fail, because how are you supposed to prevent it? Government intervention? That would be interfering by the government which is not acceptable, (which i do not disagree with you over)

    Obviously, the "next big company" will not be able to use these derivatives as the results of this round is doubtless going to be massive regulations of mortgage backed securities.


    It cannot be "punished". the government needs to keep it together long enough to be profitable again, so they can break it up and sell it off...

    The punishment is not an option...the scenario i gave you was the most basic, simplistic explanation possible...if you want me to explain jjust how bad it wwould be and why, i will grimly expound
     
  19. Wyldgusechaz

    Wyldgusechaz New Member

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    This whole thing is just inviting more gov regulation. Regulation "usually" means less efficient markets and it plays into the idea that Bush was asleep.

    BTW don't spare the grim truth. Let's hear it.
     
  20. Flashy

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    okey dokey...here are a few.

    1. AIG operates in 140 countries.

    2. It is

    -Largest US Underwriter of commercial and industrial insurance
    -Largest US underwriter of retirement services for secondary and primary education, (teachers) #2 for health care underwriting, #3 for higher education
    - LArgest issue of fixed annuites in the country
    -Largest in term life and ordinaryt life
    -Largest property and casualty service worldwide
    -LArgest US Based insurer in Europe
    - Largest foreign owned property/casualty franchise in Japan, China, Hong Kong, Korea and Thailand
    - Largest life insurer in SE Asia, Middle East, singapore, Hong Kong Phillipines,
    -Largest foregin life insurer in Japan
    -Largest and most valuable fleet of aircraft in their aircraft lease business
    -2nd Largest Consumer finance business in the USA
    -Largest Investor in Corporate Bonds in the USA
    - one of the top 5 largest institutional asset managers in the world
    -Largest independent Broker Dealer in the USA

    it has 116,000 employees across all 50 states

    if it failed, it would increase the borrowing costs for the US Government, due to the forced sale of AIG's massive government debt portfolio.

    it would cause a huge fall in the value of the dollar

    AIG is a massive presence in retirement services

    -it holds the accounts and policies of 6.7 million americans, most of whom are retired.
    - those accounts are valued at 147 billion dollars.
    - the majority of those accounts are held by people earning 50-60 thousand a year.
    - AIG's is the #1 seller of fixed retirement annuities through financial institutions
    - if it failed the retirement savings of all the pensions and retirement funds for school teachers, health professionals and retired persons with accounts would be in serious trouble
    - AIG's finance arm (AGF) is the second largest lender in the USA. it has 2 million customers who have loans of roughly 24 billion dollars
    - it is responsible for 4-5 billion dollars a year in non-bank consumer lending
    - it would be forced to default and then be sued by the investors both here and abroad, who hold over 23 billion in debt from AGF
    - roughly 1/3rd of all americans are employed by someone who is covered by AIG
    - it insures 94% of the Fortune Global 500 Largest companies

    in the USA
    -insures overer15,000 farms and agricultural businesses
    –30,000 commercial and residential contractors, including almost every major U.S. infrastructure project
    –5,000 schools; school boards; elementary, secondary and higher education
    facilities; libraries; museums; and art galleries
    –23,000 non-profit and social service organizations
    –2,600 energy and environmental organizations, including power utilities,
    superfund sites, oil and gas exploration businesses, alternative energy
    concerns and electric utilities
    –21,000 healthcare providers, including doctors, medical facilities, hospitals,
    and nursing homes.
    –7,000 real estate businesses including real estate agencies, commercial and retail buildings and mobile homes
    –9,800 transportation and travel concerns, including airlines, busses, trains,
    cargo ships, hotels, taxi cab companies and trucking companies
    –550 public entities including local governments, water authorities, airport
    authorities, housing departments, community development administrations
    and police and fire departments


    - They are the second largest investor in US Municipal Bonds, and would have to liquidate their holdings, completely destabilizing the bond market

    – insures the U.S. military, the U.N., U.S. and foreign embassies, and other organizations including the Panama Canal, oil rigs, trucking, marine cargo
    and Doctors without Borders

    – Defense Base Act program provides coverage to contractors in support of the rebuilding of the infrastructure in Iraq and Afghanistan

    – the y insure 20% of the global aviation market, and the airlines rates would go through the roof.

    - the credit protection on the 63 billion of CDO's would be eliminated

    - they are the largest aircraft lessor in the world, with 950 aircraft

    - over the past 30 years, AIG international lease finance corp has bought more Boeing aircraft than any airline or company (670 planes)

    – is the largest commercial customer of General Electric (engines), Honeywell, RockwellInt’l (avionics) and United Technologies (engines/APU)

    – is the largest buyer of U.S. made engines and components for new Airbus aircraft

    – has 102 new jets on order from Boeing as of December 2008, with a value of $12.5billion, for deliveries in 2009 and beyond

    –new Boeing planes are primarily for export, helping U.S. balance of payments, via long term leases to foreign airlines

    – Loss of Boeing's largest customer, including $12.5 billion of forward order book, resulting in reduction in Boeing ’s 183,000 employees
    – liquidate its 1,000-plane aircraft portfolio at distressed prices, severely impacting the already weak aircraft industry
    –Losses to U.S. banks and U.S. institutional holders of ILFC debt (currently $30 billon+ )


    and that does not even get into what would happen if they began failing and other countries regulators began seizing their assets


    and those are just some of the highlights.

    now, if you honestly cannot see the importance of saving AIG, think about the ripple effects of all those failures, the loss of investment portfolios of all their clients, pension funds, the loss of value of municipal bonds held by all investors...

    it would be horrible.
     
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