http://www.rhodytrader.com/the-fed-aig-loan-and-takeover-theyre-getting-it-wrong/ The Musings of a Trading and Investing Addict Wed, 16 Sep 2009 11:07:07 -0400 http://wordpress.org/?v=2.9.2 hourly 1 http://www.rhodytrader.com/the-fed-aig-loan-and-takeover-theyre-getting-it-wrong/comment-page-1/#comment-169 Media stressing impact on taxpayers in AIG rescue « TheMarketAnalyst’s Weblog Thu, 18 Sep 2008 15:15:18 +0000 http://www.rhodytrader.com/?p=216#comment-169 [...] stressing impact on taxpayers in AIG rescue There was an interesting blog post yesterday, The Fed AIG loan and takeover - they’re getting it wrong!, about how people are saying how the AIG rescue hurts taxpayers.  The fact is that the Fed already [...] [...] stressing impact on taxpayers in AIG rescue There was an interesting blog post yesterday, The Fed AIG loan and takeover – they’re getting it wrong!, about how people are saying how the AIG rescue hurts taxpayers.  The fact is that the Fed already [...]

]]> http://www.rhodytrader.com/the-fed-aig-loan-and-takeover-theyre-getting-it-wrong/comment-page-1/#comment-167 Jose Wed, 17 Sep 2008 18:39:40 +0000 http://www.rhodytrader.com/?p=216#comment-167 The Fed was created to provide the nation with a stable and healthy banking system. As I understand it, it hold's cash reserves from member banks and issues loans to them in order to promote stability. I agree that the media over-stresses the "damage" or "impact" on the taxpayer as it seems that this bailout does not come out of the government budget. Having said this, and besides this point, the issue is that the Fed gave out a loan to AIG with 80% of the company as collateral. The loan holds a high interest rate so it is in AIG's best interest to find an alternate solution. This "loan" basically gives AIG time to meet short-term debt obligations and sell off assets. Basically, an orderly liquidation/bankruptcy. Great insight and there is so much "media noise" that it is hard to get the facts straight. The Fed was created to provide the nation with a stable and healthy banking system. As I understand it, it hold’s cash reserves from member banks and issues loans to them in order to promote stability. I agree that the media over-stresses the “damage” or “impact” on the taxpayer as it seems that this bailout does not come out of the government budget. Having said this, and besides this point, the issue is that the Fed gave out a loan to AIG with 80% of the company as collateral. The loan holds a high interest rate so it is in AIG’s best interest to find an alternate solution. This “loan” basically gives AIG time to meet short-term debt obligations and sell off assets. Basically, an orderly liquidation/bankruptcy.
Great insight and there is so much “media noise” that it is hard to get the facts straight.

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