Bloomberg has a most interesting story on how AIG got the latest bail out:
American International Group Inc. appealed for its fourth U.S. rescue by telling regulators the company’s collapse could cripple money-market funds, force European banks to raise capital, cause competing life insurers to fail and wipe out the taxpayers’ stake in the firm.
AIG needed immediate help from the Federal Reserve and Treasury to prevent a “catastrophic” collapse that would be worse for markets than the demise last year of Lehman Brothers Holdings Inc., according to a 21-page draft AIG presentation dated Feb. 26, labeled as “strictly confidential” and circulated among federal and state regulators.
Not to beat a dead horse, but this article from the NYT peels another layer of obfuscation away from the truth that is AIG. If you have just had dinner, you may want to wait awhile before reading.
Normally when something like this happens there is a currency crisis following close behind.
A silent $1 trillion "Run on Britain" by foreign investors was revealed yesterday in the latest statistical releases from the Bank of England. The external liabilities of banks operating in the UK – that is monies held in the UK on behalf of foreign investors – fell by $1 trillion (£700bn) between the spring and the end of 2008, representing a huge loss of funds and of confidence in the City of London.
A lot of serious people are questioning the Obama economic team. Paul Krugman has accused the administration of dithering. Henry Blodget is not feeling like the ship of state is under control. Willem Buiter feels that the Fed is working at cross purposes to correcting the fundamental problem. And Ralph Nader, perhaps the last principled liberal left in the US, is questioning the sanity of it all.
"Virtually everything President Bush is doing to America is, at some level, related to privatization of our commons. Today we are witnessing the middle game portion of the Corporate Takeover of Everything Agenda. It scares me to imagine what the end-game will look like."
-Scott Silver, 2003
The bed manufacturer reckons that finding someway to keep your cash safe is becoming increasingly problematic. So it has come up with a new divan bed that conceals a safe.
The Great Recession has a face - the U.S. worker. The coming Depression has a name - Outsourcing. Just look at the trend of employment at IBM over the last 4 years. Employment has increased internationally and decreased in the U.S. GM is the largest private employer in Mexico. China? Let's not even go there but the outsource list gets much longer.
Once again, Joseph Stiglitz is offering his considerable opinion as to what needs to be done in tackling our financial crises. His current article at The Nation is both rational and sensible. Read it here and see how relatively simple his solution is. Of course, the bank lobby won't like it.
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