Moral hazard and the AIG bail out

reply to post by grimreaper797


Do you personally feel that the American economy can support itself right now long enough to recover and will the taxpayers be able to keep up the payments on the interest long enough? I wish I understood economics better but it seems like there is a catch22 situation developing.

Originally posted by michial
Do you personally feel that the American economy can support itself right now long enough to recover and will the taxpayers be able to keep up the payments on the interest long enough? I wish I understood economics better but it seems like there is a catch22 situation developing.

I believe the economy will hold up in the long term. Right now it looks bad, and that is just the speculative market doing its thing. I dont believe that we are going into some long recession. I think we will start to bounce back as early as the begining of 09. This is just a time of correction, and in my opinion, a great investing opportunity.

Don't let the fear mongers scare you off from a good opportunity. If you invest and the market bounces up high, you will make a great deal of money. If it crashes, you would still be in the same S.O.L. position as you would have been in anyway because A. you lost all your money that was in the bank B. you lost all value of the money you did have and/or C. Lost any long term plans you already had investe in.

There is no real reason to believe that this is anything more than short term speculative selling. People are letting FEAR dictate their decisions, rather than sound business concepts. Down the road though, those who had the sensiblility to wait it out, will benefit greatly.

Originally posted by grimreaper797

Originally posted by michial

There is no real reason to believe that this is anything more than short term speculative selling. People are letting FEAR dictate their decisions, rather than sound business concepts. Down the road though, those who had the sensiblility to wait it out, will benefit greatly.

Yeh but its more fun to spread fear and panic, rather than be sensible.

Originally posted by Rinorino2
Yeh but its more fun to spread fear and panic, rather than be sensible.

More entertaining to imagine our worst fears? Of course, but thats what we have movies for.

reply to post by grimreaper797


You make a cogent and sensible argument for the bailout of AIG and I agree that letting it collapse would be disastrous, however it is only one in a series of such bailouts. The message the Fed, a complicit Congress, and the ignorant populace are sending to similarly hard-pressed and wavering businesses is "just keep doing what you're doing, and when the game is up, we'll cover the loss, it's all good". As you mentioned the public does stand to profit thanks to the interest rate on AIG's loan, but how does that make it okay for the largest insurance company to play games with millions of people's lives and life savings? The bailouts may be a necessary evil, but there will be no excuse if the public, the regulatory bodies, Congress, and the next president-elect fail to enact massive regulatory packages. Haha, I can hear them already, "we don't need regulations! deregulate! we will regulate ourselves! free markets are self-correcting!" Where have I heard all of that bs before?

Originally posted by grimreaper797

Originally posted by michial
Do you personally feel that the American economy can support itself right now long enough to recover and will the taxpayers be able to keep up the payments on the interest long enough? I wish I understood economics better but it seems like there is a catch22 situation developing.

I believe the economy will hold up in the long term. Right now it looks bad, and that is just the speculative market doing its thing. I dont believe that we are going into some long recession. I think we will start to bounce back as early as the begining of 09. This is just a time of correction, and in my opinion, a great investing opportunity.

Don't let the fear mongers scare you off from a good opportunity. If you invest and the market bounces up high, you will make a great deal of money. If it crashes, you would still be in the same S.O.L. position as you would have been in anyway because A. you lost all your money that was in the bank B. you lost all value of the money you did have and/or C. Lost any long term plans you already had investe in.

There is no real reason to believe that this is anything more than short term speculative selling. People are letting FEAR dictate their decisions, rather than sound business concepts. Down the road though, those who had the sensiblility to wait it out, will benefit greatly.

I think you will find there is more bad debt out there than you think-the next to collapse will be debt to small business.

reply to post by EtSolveMundi


We wouldn't have saved them if Lehman Brothers hadn't collapsed 2 days earlier. If Lehman Brothers had been bought out by Barclays company, we would be reading "AIG goes bankrupt" not Lehman Brothers. It would have been too fast of a collapse for this speculative market to handle.

I wonder if there is some recourse as a taxpayer that would allow me to sue the federal government for bailing out all these bankers. I mean I am getting stuck with the bill along with all the other tax payers that schlep to work in their tin coffins along with me in the morning.

I say we need a class action law suit against the bankers and the Feds for making all of these losses a giant public debt.

There is no reason for it. Let it all fail. At this rate we are going the way of a socialist country or worse. I would rather tough it out and let the chips fall where they may. I have to pay my bills and if I default I don't get the golden parachute.. More like the financial golden beebe...

I am going to call my bank and ask them if they will forgive my debt on my home. I'm going to call the holder of my car note as well... I want mine damn it!

This generation that runs these scams on the populations of the world really suck. They should all be found and "done away with."

reply to post by northof8


it really does suck, the victims here are those of us that do pay our debts.

reply to post by grimreaper797


Mmmm....I am feeling like a bit of a sucker dutifully paying my mortgage on time........since the Govt is going to bail out defaulters and the Banks why not let a few payments slip and use the money for a stereo or a holiday?

reply to post by Rinorino2


Because that attitude collectively put us here. Don't contribute to it. The attitude of "nobody else does it, why should I" attitude is the biggest sheep attitude ever. Don't give into that.

reply to post by grimreaper797


I was making the point that these Govt bail could backfire.