Archive for September 16th, 2008
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09.16.08
AIG gets Government Bailout!
Well, it had to happen! The past few days have been tough for the credit markets, the banking markets and of course the insurance market. We saw Lehman Brothers go into the largest bankruptcy ever seen. We saw where Merrill Lynch was bought out by Bank of America. And all this happened in the past few days! You and I know we are not talking about some small company with a few million in debt, but HUGE companies with BILLIONS and BILLIONS in debt.
So now AIG, the super insurance giant, whose shares dropped like a rock in a still pond, whose debt rating was downgraded to basically junk status, was on the verge of bankruptcy. That would roil the markets, already strained with the above problem companies, to the point that financiers and economists were talking (still talking) say we (meaning not just the USA, but the entire world) would go into a depression.
At first, the government said they would not bailout AIG, and tried to get a consortium of banks to put up the 75 billion dollars needed by AIG to keep operating. Well guess what? Now the US government, the one you and I support with our tax dollars, has decided to loan 85 billion dollars to AIG! Now there is a debt that our great grandkids will still be paying for.
For the full report on this MASSIVE government bailout, read Fed to Loan AIG 85 Billion Dollars.
I don’t know about you, but I really do not believe the government should have stepped in. It is a slippery slope our government is on now, first with the money put up to a lot of banks and investment companies to keep them afloat, then the massive buyout of Freddi Mac and Fannie Mae, and now AIG. Now will the government also dump the $50 billion that the auto industry says they need to avoid a meltdown? I hope not….who really needs a bunch of auto companies who do not know how to run a business and build cars needed by all.