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New York Fed Sells Last of AIG Bonds, at a Profit (How about that!) [W: 39]


Lehman Brothers.
 
Both DA60 and Pimptight are notorious for practicing this:

"Technique #3 - 'TOPIC DILUTION'

Topic dilution is not only effective in forum sliding it is also very useful in keeping the forum readers on unrelated and non-productive issues. This is a critical and useful technique to cause a 'RESOURCE BURN.' By implementing continual and non-related postings that distract and disrupt (trolling ) the forum readers they are more effectively stopped from anything of any real productivity. If the intensity of gradual dilution is intense enough, the readers will effectively stop researching and simply slip into a 'gossip mode.' In this state they can be more easily misdirected away from facts towards uninformed conjecture and opinion. The less informed they are the more effective and easy it becomes to control the entire group in the direction that you would desire the group to go in. It must be stressed that a proper assessment of the psychological capabilities and levels of education is first determined of the group to determine at what level to 'drive in the wedge.' By being too far off topic too quickly it may trigger censorship by a forum moderator."

I highly recommend people just ignore them and stop engaging in them. If we pay them no attention they will go away.
 
is AIG still big enough that we couldn't afford to let it fail?
 
Sorry, I don't buy the idea that the taxpayer needs to fund derivatives gambling by fraudsters. If you want to see how its done, look at Iceland's story. They said F U banks, suck it up.

People (bankers) are afraid to take a hit for their bad bets, so they lobby to prolong the inevitable. It will come when the system implodes, the question is when. Rather than tell the banks to go pound sand, congress (Obama) bailed out their bad bets with OPM. So rather than recovering right now, we are slowly dying.

These are the steps of a bank bailout:

- A bank's poor lending and investment decisions lead it to go broke.
- None of the investors in the market want to be the last man standing on a sinking ship, so a sell-off ensues.
- If the sell-off leads to a market panic, then people will get nervous and demand that the government "do something."
- The government intervenes with loans, extra capital and liquidity injections. These are all euphemisms for giving the banks taxpayer money.
- Once you start intervention, you cannot stop. Hence, the intervention continues indefinitely into the future with permanently low interest rates and cheap, no-questions-asked loans
becoming part of life in the banking industry.
- The banks become zombies, neither vibrant, ongoing concerns nor failing entities. These zombie banks lead to a zombie economy that generally remains stagnant for years to come à la
Japan.

Contrast this scenario with what happened in Iceland. These are the steps to letting the banks fail:

- A bank's poor lending and investment decisions lead it to go broke.
- None of the investors in the market want to be the last man standing on a sinking ship, so a sell-off ensues.
- The government decides to let the banks fail.
- The country's currency drops like a stone, markets panic, multiple institutions fail and the country enters a depression.
- A cheaper currency combined with the effects of getting the bad debt out of the system begin the cycle of economic growth again.
- New banks step in to fill the role of the failed banks.

The first scenario is what is happening in Japan (for years), the US, and Europe. The second is the current situation in Iceland. Which do you prefer? I would gladly take a depression now and start the recovery rather than delay the inevitable via free money for banks and leave my newborn child the bill.
 
Uh, YOU WERE BANNED "where you came from", a fight site just above the WWE.
Banned from a free for all. LOFL.

It sounds as empty as all your posts in this string.

I made the case that the bail out was Not Optional, the Banks and whole system would have collapsed. We were Days/hours from another 1929. Fortunately Bernanke was not only Fed Chairman, but a Student of the Era/Event and knew what to do. It's clownish to see some Karate Kid think he knows better and can't even elucidate it.. no less.
You can't put any meat on the bone because you, like JRSaindo, are just young partisans with Zero real world knowledge, just political theory.

Your Problem is you spent 4 years and 12k+ posts on a Martial Arts forum 'debating' people like yourself - no economic aptitude, just your anti-establishment bent.
The opposition is far better here which is why you're getting your head handed to you and manage only your veiled 'tough guy' threats about your past experience.
 
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LMAO, why don't you go create a account there, and see how you do guy, put your money where your mouth is.

Go create this same thread and watch it be systematically taken apart, and watch yourself get flamed so hard you need therapy later.

I made the case that the bail out was Not Optional, the Banks and whole system would have collapsed. We were Days/hours from another 1929. Fortunately Bernanke was not only Fed Chairman, but a Student of the Era/Event and knew what to do.
Click to expand...

No you didn't, you posted 3 sentences in your op. Facts are not your friend are they?


EDIT: BTW, that "one step above the WWE chat site", has a sub section called the OT, and quite a few members of anonymous met there. Its one of the first places trolling runs into chat roulette started. Show a little respect huh?
 
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Eliot Spitzer disagrees!
 
obvious Child said:
Being greedy and stupid is not illegal.

If that was the case, many people would be committing illegal acts right now.
Click to expand...

FYI, this is what this thread is about. The re-engineering of Hank Greenberg's credibility, but unfortunately for the propagandists' facts do matter.



Read more: More on LIBOR: Plus, Spitzer takes on Bartiromo in Japanese Monster-Movie Epic | Matt Taibbi | Rolling Stone
 

So you just want to prolong the crash? I see. Why are the older people in charge afraid of change? I'm assuming you are a Keynes student, so I can't fault you for buying the "we are doomed if the banks go bust" theory. Its all that was toted in the press during the crisis.

The current motto for the economy is "I hope it works this time". Well, after two rounds of QE and more on the way with very little growth, how can you call that success? Unemployment at all time highs, 42% of Americans have full time jobs, less than half of Americans pay taxes, etc. etc. etc. This is the path to solvency? Give banks free money so they can inject the manipulated markets with liquidity and false hopes?

Yes, the bailouts were a necessary alright.... You gotta be kidding me. All the bailouts did was promote more reckless behavior from the supposedly TBTF banks. Well in true Capitalism, you don't get a bailout for failing. The market decides your fate.

I don't see you even debating anything being said except for trying to belittle the people throwing an argument about the subject your way. Rather than debate with facts and intelligence you sound like a broken record hailing Big Ben as the savior of the US when he is leading us further into insolvency. Show us proof this strategy of ZIRP and bailing out is working. I see lots of words, but very little substance to your argument. Maybe that is because there is no evidence the bailouts worked. If banks crash, who loses? You act as if though the country would have been wiped off the planet.

Allowing the banks to fail, forcing the losses on these investors and recapitalizing the consumer would have killed two birds with one stone. We would have substantially shrunk our bloated banking system as well as recapitalize the households. Instead, we have bloated banks again and a private sector that is saddled with debt. Welcome to the balance sheet recession and the continuing financialization of the global economy…..Enjoy your stay. It will not be pleasant.

So your turn, you gonna spout off about how I wasn't a student of the "era" like your hero Ben? First they ignore you, then they laugh at you, then they fight you , then you WIN.
 
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obvious Child said:
Being greedy and stupid is not illegal.

If that was the case, many people would be committing illegal acts right now.
Click to expand...

Padding your losses and misleading investors is.....or weren't you aware this is still happening? Why do you think the biggest banks NEVER have a losing quarter?
 
Moderator's Warning:
I have already issued violations. You all need to address the topic and not each other or I will issue more.
 
"Technique #3 - 'TOPIC DILUTION'

Topic dilution is not only effective in forum sliding it is also very useful in keeping the forum readers on unrelated and non-productive issues. This is a critical and useful technique to cause a 'RESOURCE BURN.' By implementing continual and non-related postings that distract and disrupt (trolling ) the forum readers they are more effectively stopped from anything of any real productivity. If the intensity of gradual dilution is intense enough, the readers will effectively stop researching and simply slip into a 'gossip mode.' In this state they can be more easily misdirected away from facts towards uninformed conjecture and opinion. The less informed they are the more effective and easy it becomes to control the entire group in the direction that you would desire the group to go in. It must be stressed that a proper assessment of the psychological capabilities and levels of education is first determined of the group to determine at what level to 'drive in the wedge.' By being too far off topic too quickly it may trigger censorship by a forum moderator."
 
JP Hochbaum said:
Forced? In that document it ASKED them to participate, lol.
Click to expand...
suuuuure....he only asked them.

'Former Wells Fargo CEO: The FED forced us to take TARP money when we didn't want or need it'

Former Wells Fargo CEO: The FED forced us to take TARP money when we didn't want or need it | Peace . Gold . Liberty | Revolution


Why would Paulson need to in ANY way force the banks to take the funds if they needed them to survive?

Since when does a drowning man need to be forced (or even asked) to grab a life jacket?

Come on now.
 
That's just the point.
We did NOT have a "crash". We (Bernanke et al) knew what to do this time.
Do you even know what a crash is?
The banks would have All failed, some big ones did anyway - and were merged into others, the Biggest were saved by the FED. Big Brokers too.
Citibank has 200 Million accounts worldwide. The were Broke.
The govt gave them $50 Billon in 2 tranches and 300 Bllion in debt gaurantee or they go Blooey.
Same with Bankamerica and most probably the corner bank you have your $180 in as well.

Of course, It goes without even saying the people with money in weaker/smaller WAMU and Wachovia, (and Merrill Lynch) merged into larger banks and then saved, would have been lined up trying to withdraw their money from those institutions and others. A National run on everyone Breaking even the few solvent, without the correct perception of Govt Backing.
Everyone who had money that was in banks, and everyone did... didn't.
Worse than 1929 in that we are more institutionalized now than then.

And big Private Industrial companes as well. GE (and most others) Couldn't borrow day-to-day operating money from the Frozen Commercial Paper market.
The problem is you don't even Fathom what happened..
(You wouldn't be that clueless IF you were "older"/wiser because you show signs of brightness)
But right now You just spout economic theory.
About a year ago we had a similar bimbo-outburst from the Young Libertarian/Austrian economics/Mises crowd. Since, mostly passed on.

I don't know where you have your money but you would have lost it in Runs on those institutions were it not for the accurate perception of the public the Govt would save them
Clearly you and Pimptights have No money, No stake in the economy so it's no big deal. Except you would have joined the other 30% of America (and Europe/Asia) on the food lines.

Pimptights is totally whacked.
See his post on the last page YOU 'liked' where he accuses me of being some kind of govt psy-ops "spy".
WTF!
and Innuendo throughout
He also gratuitously injects the LIBOR scandal link into this string.
He's Mel Gibson in 'Conspiracy'. Every post he sees phantoms/plots/psy-ops. And if it's not LIBOR, its Sibel Edmonds. SE, a Turkish, Turkish language interpreter, who worked for the FBI for only 3 months more than 10 years ago. Etc,Etc.
OCD anyone?


You don't even know My politics.
I am a Economic Realist.
Guess WHO was the first to Warn about ZIRP here?
http://www.debatepolitics.com/economics/123630-kyle-bass-zirp-trap.html
I also Strongly suggest Mr Bass' other work.
http://www.debatepolitics.com/economics/110574-kyle-bass-confessions-dangerous-mind.html
NOT A Keynesian.
Here are his 4 most notable videos are linked here, MY reader.
http://www.debatepolitics.com/economics/123630-kyle-bass-zirp-trap-2.html#post1060397145

Please watch at least one, preferably all, before responding.
You will like them, I promise.

You will see I AGREE, Some big losses Do have to be taken.
I MORE than understand, I brought that here more than anyone else.
But we could Not let all the Banks, Brokers, and Big private companies go down here and elsewhere all at once.
We could not destroy the savings of 90% And jobs of 50% the populous. Again, Saving the infrastructure was Not Optional.

I did my homework/research on You and Pimptights (as I do on everything including economics), you both show no such curiosity/tenacity/ability.
You should have searched my previous posts.

So your turn, you gonna spout off about how I wasn't a student of the "era" like your hero Ben? First they ignore you, then they laugh at you, then they fight you , then you WIN.
Click to expand...
No, it's YOUR turn to explain what was better about allowing the 1929 Crash. And THAT WAS a "crash".
BTW (and again re Bernanke) the ten years following the 1929 Crash were a Dead decade. Horrendously worse than now or what would have happened if we allowed it.. again.
We are preventing that. NO comparison.
We didn't really recover from 1929 until.. Drum Roll.... the Gigantic Govt Spending/Sponsored/Industrialization for WWII.

And I linked my previous poss explaining what would happen and why earlier in the string.
Which is more meaty that anything presented here.
Pimptights thinks I'm a Fed/Goldman-Sachs spy! He's the one with Nothing but insults and talking about his other 'tough' board (he got Banned from.. accusing many there of being 'plants' too.)

If you read what I presented/previously linked back to and have again in this post, you will see I Quite understand what you're trying to say.
It's you who don't understand what I am saying because you don't have the historical or practical knowledge I do.
If you call that "old".
 
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mbig said:
The banks would have All failed,
Click to expand...

Where is your links to unbiased factual evidence (not opinions - facts) that all the banks would have failed without the Fed?
 
DA60 said:
Where is your links to unbiased factual evidence that all the banks would have failed without the Fed?
Click to expand...
That's all you have to say to my meaty post aove?

Why do I need Links? It's not only common knowledge, I threw out Real numbers, numbers Citi clearly didn't have.. (REFUTATION PLEASE? LINKS OR LOGIC)
Citi was 97c a share down from $55.
Asking for Links for this not only shows incredible Ignorance on your part of basic recent economic history, but is again an attempt at the Fallacy of 'Shifting The Burden'.
(everyone else please google if you are unfamiliar with this tactic.)
Clearly you Cannot refute what I presented without Links on either of our parts/using simple logic.

Nonetheless.. Here ya go!

Citigroup talks with US Government as bankruptcy looms | Credit Writedowns
or
Citigroup secures government lifeline - Nov. 23, 2008
or
Citigroup Avoids Bankruptcy, Will Citizens Fare as Well? - Seeking Alpha
or
CitiGroup Citibank BailOut Saved from Bankruptcy with $20 billion
http://www.tipsity.com/finance/2008/citigroup-citibank-bailout-saved-bankruptcy-$20-billion

many, many, more available

When do YOU put up some knowledge/meat or Links to prove Citi could have survived without the bailout/Refute me?
DA60 has again FAILED his debate duty using either logic or links; merely tries the Burden of proof shift'.
Show us something/anything boy!
 
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Assuming CitiBank would have failed without government aid (not that I necessarily agree with that), that is only one large bank.

Just because GM and Chrysler failed did not mean that Ford did.

You said 'The banks would have ALL failed'.

Where is your links to unbiased, factual evidence (and again, not opinions, facts) that ALL banks would have failed without the Fed?


Ohhh...and you think I 'failed my debate duty'?

Lol....you ARE funny.



Have a very nice day.
 
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LOL, YOU LOSE on Citi.

So it's on to the NEXT Burden Shift attempt!
Tell us, (Again) when does this end and when do YOU start putting up something/ANYTHING of your own demonstrating one cintilla of knowledge of anything or do you just say "put up more links/Proof"
Your posts are all Bluff/FRAUD with ZERO content just Burden shifting fallacy

Banks are highly inter-related/interdependent.
And Bankamerica was in just as bad a shape.
Again, WAMU and Wachovia were bankrupt and merged by the FED. (not to menton millions of accounts at Merrll Lynch which was forced in Bankamerica)
Even solvent banks, and there were few dollar-wise, that could have withstood a run triggered by letting Citi, WAMU, Wachovia, alone go down. Panic/Runs would have ensued. Hundreds of Bankrupt Banks (500?) have been merged by the FED in an organized manner, saving all deposits/depositors instead of a one day massacre/panic.
Citi alone has 200 million accounts worldwide. Not an opton.

You know NOTHING and continually demonstrate that.
BTW, your extra-wide vertical spacing (compressed to normal in my quote) adds volume but Still No content to your posts. So even that common Fraudulent Self-conscious illusion is now shattered.


EDIT to DA60's continual empty Baiting below. #48
He's a complete Fraud/Washout/Baiter, posting Absolutely No Content here, just trying the Juvenile Fallacy of shifting the Burden of proof.
He uses extra wide vertical spacing to self-consciously add volume if not content. A common compensation mechanism.
He's now Outed/Fried
 
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So we agree to a point, but disagree greatly on socializing bad bets of banks. This isn't 1929, and we don't have deflation paired with these massive bailouts. Governments all over the world are rushing to prevent a total meltdown, that also didn’t happen in 1929. A bailout could and most likely worsen inflationary problems, which was not a problem during the Great Depression when prices were sagging and hurting business people. The FED and congress followed the same playbook this time around but with way more taxpayer money.

How can we trust anyone in charge today when they repeat history to a T? Regulators are overwhelmed due to Congress slashing budgets making it harder to regulate. Coincidence? Doubtful. Many of our government leaders came from Wall Street and they profited handsomely and are now protecting their friends still sitting in their lavish offices. We handed our money over to these supposedly sound financial institutions and they siphoned off their outrageous salaries and pay packages and did nothing to protect our investments, they didn’t care, they got their payola and that’s all that mattered to them. Even now, even after they have collapsed the economy, they are sucking even more billions out of the dead carcases of their companies, sucking the government transfusion out as it is still being administered. When long-term interest rates are so low as to not reward the risk, people stop investing. Wouldn’t you? Who can coerce them into losing money? The private sector is buying up short term debt, and the FED is buying up all the 10Y and longer debt. Don't you see a crisis brewing?

We are in a slow stall and barely sputtering along. All on ZIRP. This can't go on forever, and when interest rates rise, hang on. I was all over the place, but this is not like 1929 and letting these banks go bust would be crappy in the shrot term, but better in the long term. How can you justify the trillions in racked up debt to future generations to save a handful of banks? Its theft from the people and they should be prosecuted.
 

So you believe that asking you to back up the matter-of-fact statements you make with links to unbiased evidence is 'burden shifting fallacy'?

Okaaaaaaay.

Noted.



Also, so I also take it that you do not have links to unbiased, factual evidence (facts, not opinions) that 'the banks would have ALL failed' without the Fed?

Also noted.


Have a nice day.
 
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Hmmm. Might have been an interestiong thread but for the trashing of the place by a few posters with nothing either factual or constructive to say. The problem with AIG wasn't the volume of CDS's it generated, but the fact that it simply failed to hedge any of it. They were backing some of the best rated tranches of some of the highest quality debt, but particularly once ratings began to soften and the first losses began to appear, hedging and reinsuring should have been the order of the day. Instead, the deciders simply plowed ahead as if they had no comprehension of the concept of systemic risk. This is difficult to understand. It means that the people in charge in London literally didn't know what they were doing.

Suggestions here that AIG should simply have been allowed to fail for its various evasions and transgressions are meanwhile akin to Dutch people claiming that the dikes should be allowed to fail. Either notion is dumb almost beyond belief. The tentacles of AIG's CDS exposure reached almost every significant financial player in the world. AIG's collapse would have pulled many major players down with it, and their collapses would have brought about a third wave and theirs a fourth until a huge and utterly devastating hole had been ripped out of the heart of global finance. Without finance, there is no trade. Without trade, there is no production. No prodution means no jobs, no incomes, and no demand. This is the scenario that the Fed and Treasury worked to head off. Naysayers claimed it wouldn't work and that the ultimate costs to taxpayers would be hundreds upon hundreds of billions of dollars. They have turned out to be entirely wrong on both counts.
 
Yeah, the FED managed to rack up trillions to the taxpayer, not billions. They bought 61% of the debt in '11. Seems like the private sector lost faith to me.

Had AIG been allowed to fail in a controlled manner through bankruptcy, bondholders and derivative counterparties (major banks) would have suffered significant losses, limiting the amount of taxpayer funds directly used. Fed Chairman Ben Bernanke argued: "If a federal agency had appropriate authority on September 16, 2008, they could have been used to put AIG into conservatorship or receivership, unwind it slowly, protect policyholders, and impose haircuts on creditors and counterparties as appropriate. That outcome would have been far preferable to the situation we find ourselves in now." source: FRB: Testimony--Bernanke, American International Group--March 24, 2009

Bernanke tried to play the middle of the road guy when in reality he and the FED are just helping their "too big to fail" buddies. A slap on the wrist with oodles of money for failed practices does nothing to curb bad behavior Ben.

There was a report in 2010 that concluded the Federal Reserve Board’s intimate relations with the leading powers of Wall Street (the same banks that benefited most from the government’s massive bailout) influenced its strategic decisions on AIG. The panel accuses the Fed and the Treasury Department of brushing aside alternative approaches that would have saved tens of billions in public funds by making these same banks “share the pain.” Rather than the greedy bastards share the pain, they pushed it off on the taxpayer.

Bailing out AIG effectively meant rescuing Goldman Sachs, Morgan Stanley, Bank of America, Merrill Lynch, as well as dozens of European banks from huge losses. Those financial institutions played the derivatives game with AIG. AIG lost its bets, which led to its collapse. But other gamblers, the counterparties in AIG’s derivative deals, were made whole on their bets, paid off 100 cents on the dollar. Taxpayers got stuck with the bill.

I do not think it is OK for people who don't have anything to do with high risk derivatives to take the losses. Spread out across the large number of big banks involved, it wouldn't have led to total collapse. We will have to agree to disagree. I don't believe any of the bs fed to me by the FED or congress, I will believe what I find through my own research. Nothing is too big to fail. They are now too big to succeed, thanks to our corrupt system of crony capitalism.
 
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