Drew Horn

AIG Needs Dissolving

AIG is a large symbol of the main complaint have with the financial industries. It was allowed to become a hybrid casino and a legitimate insurance company. It is the best example of why the "too big to fail" issue needs to be resolved. Selling AIG's assets is the only reason to keep it alive but, as with most financial transactions, timing is everything.

Each part of this conglomerate is different and, as a taxpayer, I hope management has the skill to optimize the selling prices. The greatest danger is that management will try to wait out the dissolution clock and try to keep AIG alive in the long run. From managements view, that makes sense, especially if the CEO, CFO, etc are skimming millions every year it survives(they have no skinny in the game). I suggest that their pay be cut by 50% a year for two years and after that (with a new team), require that those that failed to sell it give back their prior pay at the rate of 33% a year until all assets are sold. That's a real incentive plan!

Wall Street Breakfast: Must-Know News

Yeah, "culture of corruption" my left foot! Judges who make sentencing decision's based on "culture" probably got their jobs as a result of a "culture of political corruption". This precedent probably means that Representative Jefferson who was caught with $90 K in cash in his freezer (you cant call that hot money :-) should be sentenced to two weeks in Disney Land.

Financial flim flam artists will continue to ply their trade until some are sentenced to their rightful occupations -- cleaning our sewers or redesigning / reform of bank regulations, both subject they are very familiar with.

AIG Dumps Two Toxic Assets on the Fed

The fundamental issue is the FED has no "accountability" to congress, the president, voters, banks, investors, or anyone else. They can print as much money as they so decide and by so doing, threaten the worlds economies. There isn't a mechanism to change or override their actions. The FED's first purpose was to be a national bank, much like the Bank of England but they have morphed into an uncontrolled, unaccountable influence on all of us and they are about to get a lot more regulatory power (without demonstrated skills or wisdom to use it).

The reason the FED continues to have too much power is that our politicians are unable to act logically and responsibly in matters of financial management. Thus, it is hoped, the FED will act as a counter influence on the excesses of elected government. But the result has been that the FED is also acting irrationally and the result has been that both fiscal and monetary policies are threats to capitalism.

Does anyone have a good solution to the problem?

Wall Street Breakfast: Must-Know News

The Taylor rule seems to be that we have to bribe people to borrow and spend money they don't have and are unlikely to be able to repay. This seems to have a familiar ring to it, a bit like the hedonistic attitude that brought us this "crisis".

I wonder if the Fed will be getting legislative powers. If so, they may try to repeal the "business cycle" and institute a new policy --- eliminate capitalism.

Wall Street Breakfast: Must-Know News

Another $100 bn given to AIG should be enough pay off most of the credit default swaps and placate the heavy hitters that have been filling Paulsen and Geithner with the fear that they won't take them sailing, etc.

There are lots of useful things to do but the moneylenders have proven that they are incapable of recognizing them.

Wall Street Breakfast: Must-Know News

1) Its time for AIG to sell divisions. Breaking them up is the right answer to the problem of being "too big to fail" and will give them some cash as well.
2)Have them go into chapter 11 and abrogate all their credit default swaps. AIG is a global insurer yet the US is being asked to bail out all their global business. US taxpayers should not be asked to support Swiss, English and other international interests.
3) If they want cash, I will loan them mine but not @ 3%.

The Fed Money Machine Gears Up to Print Trillions

It used to be that economists like Ben Bernake counciled that, in a capitalistic economic society, that (business) cycles are normal and necessary to periodically rebalance the system. This remains true but the truth cant make us free of the ignorant people currently in power .

What has happened is that Americans have been sold the idea that they can gratify every hedonistic whim without having to pay the bill. They borrow without any knowlege of or concern for the terms of the loans or much thought about how they will find the money to repay them. The entire finanical /political system has been redesigned to allow Americans to indulge in fantasy.

Now that a few of these problems have been exposed, most of the stake holders, including investors, banks, government, etc are scrambling to save their system that is, in the long run, unsustainable. The people who will pay the highest price to "save" the financial system are those who, paid their bills, and didn't borrow beyond their ability to repay loans and put ny extra money in a bank.

The business cycle has not been repealed. It has been co-opted by a political system only interested in their own short term profit and survival.

If someone leads a revolution to stop this waste of our childrens futures, I will gladly join!