Feds take over AIG in step towards stability

[metsfan]

http://money.cnn.com/2008/09/16/news/companies/AIG/index.htm?cnn=yes

 

- A

[Harry]

Very sad. A good friend of has been working for AIG for over 13 years now. I wonder how it will effect him.

[Coolbreezing]

If you really think about it, in theory a companies earnings and revenue should increase at the same rate as inflation over time ... but that is not what's happening. They earnings and revenue are not increasing at the same rate as inflation. That is why many more companies will continue to lower they spendings and investments. Some companies knows that they goring to fall but the question is from how high. No company wants to fall ... therefore, they look to borrow to maintain. When the amount borrowed exceed the total cost of operation, profit is not possible their stocks began to depreciates in value and they ended up being acquired through hostile take over. The acquisition company then performed a SWOT analysis but only to found out it's a risky investment. Therefore, they sale out to other big corporations that can afford to purchase risky companies and those are corporations that are back by the banking industry. If you think what happen to Bear Stearns is a coincident wait you'll see. I predict that we all goring to end up working for a few big companies. And those companies will be those that are partly own or back by big banks. If you really think about it, this is a system that is set up to transfer wealth over to those that are already super rich.

 

I know that I'm no analyst, I barely made it through college because I could never understand my professors. If you ask me, they never made sense to me. For someone who barely made through college, I think it would be fair to say that my prediction was right on the money. What happened to the Lehman Brothers was not a coincident, it is the continuation of the many claps to come. Every big corporation that claps will be acquired by companies that are back up by the banking system. This is why I predicted in the future that we all maybe ended up working for just a few big companies that will owns most of the wealth.

 

Now, when ever a big claps like that occurred, it causes foreign investors to panic which could cause them to retrieve their investments. When that happened the American dollar depreciate in value causing inflation to rise. Let it be known that no currency is stagnant. A currency can increase or decrease in value, it's all depend on the country's economic situation. If unemployment rate increase or the country is face with an economic crisis such as this one we have here, the country's currency will depreciate in value. Inverters who trade currencies will be hesitant to invest in the American dollar. The law of supplies and demands tell you that if you're not in demand than we're not interested. And if no one want your money than the value of your currency decreases, plain and simple.

 

I never thought that I would say this but it seems that we may be in need for a better currency. In this case I'm thinking the Amero may not be so much of a bad deal after all. I'm not saying that it will be perfect but at least it may help boost the American economy. Being that our dollar is getting weaker every hour, the Amero which represent Mexico, Canada & USA combine can be a substitution for the American currency. If you think of it, not very often you'll see all three countries faced financial difficulties. We've seen in Europe how the EURO holding up. European countries that are less productive don't necessarily have to suffer because the value of their currency has fallen. Therefore, if America is faced with financial problems, Canada and Mexico may not which could possibly help balance the American economy by maintaining the value of the Amero. I'm not the best person to explain this but anyone who has common sense can see both the advantages and the disadvantages that comes with the introduction of the Amero.

[metsfan]

Very sad. A good friend of has been working for AIG for over 13 years now. I wonder how it will effect him.

 

Not much i think... I've been told by people i trust for info that this is simply a measure to keep a domino effect from starting which would send the global economy into a deep recession. Basically once the company gets out from the pit its in now all will be well.

 

Not sure if many non-economic minded folks realized, but the "twin towers" of finance have taken hits. These are the folks that lend to banks. The first tower (lehman) has fallen & if the second (AIG) falls the fiscal outlook for the next decade is quite bleak for the global economy. The fed made a good move here that will hopefully lead to a path out of this subprime mess within 5 years. These are scary times for companies exposed to bad debt. I for one am holding my breath to see what happens next.

 

- A

[SubwayGuy]

Ive said all along I think its only going to get worse. Rule #1 of finance is you don't loan to people with bad credit. It's a market correction particularly in housing and very necessary. The best advice I'd give everyone is if you're young buy US stocks when they're low but choose carefully. As for work, have a backup plan maybe two, be prepared to work hard and save your money, you will need it. Particularly if things keep going the way they're going and if McCain ends up winning the presidency and does a similar thing to Bush it's just going to get worse so the best advice I got is protect yourselves.

 

Don't buy a car unless you need it, pay off your debts, keep your credit score good, and keep a job, have a backup plan lined up just in case. If you're gonna buy a house at any point you might just want to look into buying foreclosed property it will save you money if you do it right. And don't spend money you don't have on #### you don't need. Especially with credit cards.

[Coolbreezing]

When a giant company like the Lehman Brothers falls, it signified the realization of how crippled our economy has become. Now we should remember 8 years ago that was not so. Former president Clinton left office with a surplus and we should not forget that. He may have not been the best president for some of us but at least he didn’t leave his country economically stranded. That is exactly why I said politic is a game of give and take and who we elect to represent us, will dictates how much we take. As you already saw, under President Clinton we were better off than we are now. We actually had saving account; now how many people in the country hold a saving account?. I would say maybe 25% of the population and that’s pushing it. As Americans, we’re living above our means. We buy now to pay back latter instead of paying for it now to prevent accumulation of interest. A dollar today is not the same as a dollar tomorrow; interest is the price we pay for borrowing money.

 

It would be nice if all Americans had the option to pay for what their want now. The truth is most Americans can’t afford to buy what their needs now. They relied on credit for simple stuff like food, dippers, utility bills etc. They say when you live in glass houses you don’t throw stones. They’re right; those of us who seem to think that someone with a bad credit should be rejected from getting a loan are not looking at the whole picture. Someone may have a low credit score but still pay his/her bills. He may not pay them on time because of financial difficulties but at least he pays them. Lenders look at a person like that as an opportunity. A lender can make more money by lending to a person who pays late than a person who pays on time. On the same token, we can also say that it’s the accumulation of dept that contributes to the cause that makes companies falls. Either case would be right but it doesn’t justify the reason why we shouldn’t lend to people with poor credit. If we were to truly implement that, the majority of Americans would be left clueless, unable to survive. We are a country that heavily depends on credit, it’s like a drugs. Some of us are first introduced with it on our freshmen year of college, at least that’s how they got me.

[metsfan]

Bank of america, wells fargo, wachovia, and commerce banks seem to be doing fine. BoA just bought merril lynch too.

 

- A

[Pablo M 201]

Bank of america, wells fargo, wachovia, and commerce banks seem to be doing fine. BoA just bought merril lynch too.

 

- A

Wachovia is not doing fine. They've lost billions the 2nd quarter I believe.

 

As I look at whats going on at Wall Street, its seems both WaMu and Wachovia went up quite well today, so we shall see how things go.

[metsfan]

Wachovia is not doing fine. They've lost billions the 2nd quarter I believe.

 

As I look at whats going on at Wall Street, its seems both WaMu and Wachovia went up quite well today, so we shall see how things go.

 

Wachovia did the worst of the "local branch" banks as far as losses related to bad debt exposure, but it's not gonna fall apart.

 

- A