jadziasman

AIG Bailout 2: Why?

AIG is much like Lehman Bros, Merrill Lynch, Bear Stearns and Morgan Stanley. Each company made fundamental mistakes at a critical time from which each reached their point of no return. : - { The common mistake was the mismanagement of derivatives and asset backed securities (ABS).

Unwinding these derivatives and ABS' with the help of people like BlackRock's Larry Fink will take time but with the unlimited resources of the US and other central banks it will eventually get sorted out. Will it be "painful"? Does anyone doubt that the answer is yes?

I believe it's safe to say that the vast majority of US citizens have benefited from credit securitization and derivatives despite the drawbacks. And, since it is not practical or even possible for a Luddite solution for another fine mess they've gotten us into, we've all got to do our part to keep the good ship Liberty upright lest she capsize and we all drown like rats.