AIG Bailout Just Another Government Boondoggle
November 4th, 2008Via: Washington Post:
A number of financial experts now fear that the federal government’s $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing.
The Treasury Department leapt to keep AIG from going bankrupt on Sept. 16, and in the past seven weeks, AIG has drawn down $90 billion in federal bailout loans. But some key AIG players argue that bankruptcy would have offered more structure and greater protections during a time of intense market volatility.
AIG declined to comment on the matter.
Echoing some other experts, Ann Rutledge, a credit derivatives expert and founding principal of R&R Consulting, said she is not sure how badly the financial system would have been rocked if the government had let AIG file for bankruptcy protection. But she fears that the government is papering over the problem with a quick fix that was not well planned.
“What we see now are a lot of games by the government to keep these institutions going with a lot of cash,” she said. “This is to fill holes in companies’ balance sheets, and they’re trying to hold at bay the charges that our financial system is insolvent.”
What do you make of the allegation that AIG was bailed out to protect covert operations?
“What do you make of the allegation that AIG was bailed out to protect covert operations?”
I’ve read the stories about AIG being a global front for the CIA too. It wouldn’t surprise me. AIG’s longtime CEO, Hank Greenburg, was once offered the number 2 position in the CIA and has long been communist China’s American “representative” in the Council on Foreign Relations. He is one of the most politically well-connected guys in the country and he virtually dictates our policy toward China to congress. The Fed probably bailed out AIG because Greenberg asked them to.