You’d have to be an idiot to claim that Wall Street is performing well at the moment; the reality is that we’re in a textbook definition of a bear market. However, for reasons that remain inexplicable, people are knee-jerking to the bad new…

And besides all that, the people who are angry about it, are not the people who are responsible for the outcome. It is easy to talk about this sort of thing in the abstract, but the damage done if AIG went belly up would have been very real, nothing abstract at all.

Next, AIG is considered ‘too big to fail’ because they invested in, and insure a lot of, Alt-A mortgage product (such as MBSs) at US banks. If AIG folded, a lot of those banks would suddenly find their assets uninsured — and themselves in a rather precarious financial position. You only think the economy has problems now; if AIG folded, it’d be a lot worse.

Doesn’t mean I have to like it, but the Feds ain’t shoveling out money because they like it.

Doesn’t AIG underwrite financial institutions and non-financial institutions around the world including my local department store and therefore if my local department store (John Lewis) goes belly-up does that mean you lot are paying for it? Isn’t this all a bit mental if you US taxpayers are now personally underwriting institutions across the globe?

I’m bewildered.

Also, what, in practice, does it actually mean for Joe Public if the US financial system becomes almost entirely nationalised?

I hope we have once again reminded people that man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty contracts.

The Late Ronald Reagan

Wow. I think I am just witnessing my beloved country turning commie.

Yes we needed to bail out AIG. Yes we also needed to bail out Fannie Mae and Freddie Mac.

But if this pattern continues, then we might as well nationalize the airline industry, auto industry and Google (for our own safety–wink).

If McCain loses this election, then its time to move. I have no desire to live in a country gone commie socialist nation.

Darnell Clayton on September 17, 2008 at 11:38 AM

Where are you going to move to? You’re concerned about socialism, so it won’t be Europe, or Canada, and Australia is pretty far down the socialist well, so let me know where this shining beacon of conservatism is, and I may join you.

Why don’t all conservatives move to Alaska, and demand independence. We then take Siberia, and form a true conservative northern nation. We have lots of resources, and won’t have to engage in much ideological cleansing, because of the sparse population.

I think my questions are legitimate. I don’t claim to be an economist. Fortunately, I can study economics but you sir will always be an a55hole.

ronsfi on September 17, 2008 at 11:28 AM

Yes your questions are legit which is why I pointed you in the right direction. I guess that makes me an asshole in your book. So be it.

Yes we needed to bail out AIG. Yes we also needed to bail out Fannie Mae and Freddie Mac.”

I see this as not even as bad as the bailout of Chrysler. It is a loan. Also, Sweetness and Light has a pretty good article where they show that Bush (with McCain’s support) tried to fix this in 2003 and was blocked by Congress.

I love the way you people act as if your own policy preferences are “just a way of life” which all must accept.

flenser on September 17, 2008 at 10:59 AM

Please don’t call them my policy preferences, but yes they are just a way of life. When you have an apathetic public and a two party oligarchy whose main differences are nuances, those policy preferences are just a way of life which we all must accept. This is what Western Civilization has and been all about.

Yes we needed to bail out AIG. Yes we also needed to bail out Fannie Mae and Freddie Mac.

But if this pattern continues, then we might as well nationalize the airline industry, auto industry and Google (for our own safety–wink).

If McCain loses this election, then its time to move. I have no desire to live in a country gone commie socialist nation.

TheBigOldDog on September 17, 2008 at 10:32 AM

I think my questions are legitimate. I don’t claim to be an economist. Fortunately, I can study economics but you sir will always be an a55hole.

It would have been difficult times short term had AIG failed, had Bear Stearns failed, but the market would have adjusted, been stronger and wiser as a result.

Instead the taxpayers get hosed, the CEOs who ran these companies into the ground walk away with millions of dollars. It is just plain wrong.

The government was pretty much obligated to do this as the reason for AIGs problems is the holding of so much Lehman securities and debt. The state of Florida holds a bunch too, and might need bailing out. In this case, I don’t mind a *loan* as much as a straight out bailout. We are pretty likely to get our money back.

crosspatch on September 17, 2008 at 11:05 AM

I had read that it was eventually going to spread to local government institutions because of the insuring of junk securities. I’m glad I got most of my 401 out of stocks early, and now if I could just find a way to get into my mattress.

Remember when Mitt Romney gave his controversial speech in which he claimed that the American way of life requires a Judeo Christian foundation, or else it will fail? — And everybody hissed and bitched the usual clap trap about theocracy, and who are you to judge, and keep your morals away from me, etc., etc.?

Romney was right.

jeff_from_mpls on September 17, 2008 at 8:37 AM

Yeah, it’s simply impossible to have a good government without believing in a magic man in the sky who’ll mess you up after you die.

Xolom on September 17, 2008 at 8:57 AM

Go ahead and ridicule the Judeo-Christian basis of civilization.

You place your faith in some words on parchment that were ratified by a bunch of guys in Congress in 1776, and who are now dead. That’s a pretty flimsy foundation for a nation.

Please explain, without a shred of metaphysics, why the hell I should honor that document, other than by a moral law that binds me as a human being to other human beings living in an ordered society.

Again, you can ridicule religion. We’re used to it. But what you fail to grasp is that you merely worship a different, vastly fallible god.

Politics is a stable field. Some of those people have been camped out in DC for over thirty years.

flenser on September 17, 2008 at 10:55 AM

I was thinking law school when I wrote it, but I find the field too detestable to recommend, but that’s harsh, since it’s the people in the field, and not the field that is so detestable.

Exit question: Is there a lawyer who doesn’t make used car salesmen look like clergy?

There is foreign competition for many jobs, that is just a way of life after NAFTA and subsequent trade deals.

I love the way you people act as if your own policy preferences are “just a way of life” which all must accept.

o/t headline: Rothschild from Clinton camp backing McCain now.

Lynn Forester de Rothschild is the CEO of EL Rothschild, a holding company with businesses around the world. She is married to international banker Sir Evelyn de Rothschild.

Putting rumors to rest, or preparing for sabotage?

Hillary will/will-not join the Obama ticket for the October surprise?

How best to crumble McCain’s forces than from within?

Is Rothschild a Trojan Horse? If such, is this where McCain keeps his friends close and his enemies closer?

It would be difficult for me to give good advice to a young person regarding what field might give him a stable career.

Politics is a stable field. Some of those people have been camped out in DC for over thirty years.

There is foreign competition for many jobs, that is just a way of life after NAFTA and subsequent trade deals. Another thing that hurt high tech jobs was domestic supply, during the dotcom bubble that is where the money was so many people trained for the high tech fields, but once those companies went bust we had all these extra workers around. To blame it on H1B visas is in error, and a Greenspan quote won’t sell me on this one, besides his “keen” sense of perception is part of the reason we are in our current mess. Of course he isn’t going to say that education and the housing market are messes because he was shoveling out money like it had an expiration date.

LevStrauss on September 17, 2008 at 10:42 AM

If there is a glut of highly skilled technical people then eduction isn’t a problem and students are reacting logically to an oversupply. I’m not going to argue with you about H1-B visas, since these guys are so much better at it, but they are being used to break the back of tech workers, and that’s why smart students aren’t entering those fields.

Read/heard some smart people days ago basically saying Russians hadn’t yet realized how interconnected to the world they had become and their days of acting independently and capriciously were long over. I guess they were right.

TheBigOldDog on September 17, 2008 at 10:35 AM

One of the secrets of Capitalism is to get new converts to have stock and bond markets. That spurs ownership and that has consequences.

That’s why I never really worry about China now. Also markets act as fairly good barometers. Whenever anything happens in the Middle East and all the fear mongers jump ugly I just check the Israeli markets to see if it I should be concerned.