Chaos at AIG

DontTreadOnMe(Post 3601883)
Why are you binging up Bush?

Bush didn't word it, Bush signed it. Congress worded it and it was Dodd who put in the bit about bonuses being protected.

link

Emergency Economic Stabilization Act of 2008, commonly referred to as a bailout of the U.S. financial system, is a law enacted in response to the global financial crisis of 2008 authorizing the United States Secretary of the Treasury to spend up to US$700 billion to purchase distressed assets, especially mortgage-backed securities, and make capital injections into banks.[1][2] Both foreign and domestic banks are included in the bailout. The Federal Reserve also extended help to American Express, whose bank-holding application it recently approved.[3] The Act was proposed by Treasury Secretary Henry Paulson during the global financial crisis of 2008.

The original proposal was three pages, as submitted to the United States House of Representatives. The purpose of the plan was to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. The text of the proposed law was expanded to 110 pages and was put forward as an amendment to H.R. 3997.[4] The amendment was rejected via a vote of the House of Representatives on September 29, 2008, by a margin of 228-205.[5]

On October 1, 2008, the Senate debated and voted on an amendment to H.R. 1424, which substituted a newly revised version of the Emergency Economic Stabilization Act of 2008 for the language of H.R. 1424.[6][7] The Senate accepted the amendment and passed the entire amended bill by a vote of 74-25.[8] Additional unrelated provisions added an estimated $150 billion to the cost of the package and increased the size of the bill to 451 pages.[9][10] See Public Law 110-343 for details on the added provisions. The amended version of H.R. 1424 was sent to the House for consideration, and on October 3, the House voted 263-171 to enact the bill into law.[6][11][12] President Bush signed the bill into law within hours of its enactment, creating a $700 billion Troubled Assets Relief Program to purchase failing bank assets.[13]

Everybody is full of ****. The AIG bailout was orchestrated by Paulson without any input from Congress. Both parties were steamed. LETS NOT LET REVISIONISM GET HOLD. Oh then while were at it lets look at the TARP bill

Quote:

Emergency Economic Stabilization Act of 2008, commonly referred to as a bailout of the U.S. financial system, is a law enacted in response to the global financial crisis of 2008 authorizing the United States Secretary of the Treasury to spend up to US$700 billion to purchase distressed assets, especially mortgage-backed securities, and make capital injections into banks.[1][2] Both foreign and domestic banks are included in the bailout. The Federal Reserve also extended help to American Express, whose bank-holding application it recently approved.[3] The Act was proposed by Treasury Secretary Henry Paulson during the global financial crisis of 2008.

The original proposal was three pages, as submitted to the United States House of Representatives. The purpose of the plan was to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. The text of the proposed law was expanded to 110 pages and was put forward as an amendment to H.R. 3997.[4] The amendment was rejected via a vote of the House of Representatives on September 29, 2008, by a margin of 228-205.[5]

On October 1, 2008, the Senate debated and voted on an amendment to H.R. 1424, which substituted a newly revised version of the Emergency Economic Stabilization Act of 2008 for the language of H.R. 1424.[6][7] The Senate accepted the amendment and passed the entire amended bill by a vote of 74-25.[8] Additional unrelated provisions added an estimated $150 billion to the cost of the package and increased the size of the bill to 451 pages.[9][10] See Public Law 110-343 for details on the added provisions. The amended version of H.R. 1424 was sent to the House for consideration, and on October 3, the House voted 263-171 to enact the bill into law.[6][11][12] President Bush signed the bill into law within hours of its enactment, creating a $700 billion Troubled Assets Relief Program to purchase failing bank assets.[13]

Both of these were heavily directed by the THEN WHite House in SEpt 2008 and Oct 2008. Obama wouldne even be president for another 3 to 4 months.

How the lying sacks'o'**** try to rewrite history. SHAME On You McG-youve at leat kept it above the waist until now.

McGentrix wrote:

Bush didn't word it, Bush signed it. Congress worded it and it was Dodd who put in the bit about bonuses being protected.

link

yeah, he signed it. it's his baby. he was the president, remember?

he, and he alone had the power to kill it. veto ring a bell ?

but you don't address that, only what you want to. and what you want to is invariably what a democrat did or said.

but that's cool. keep on thinking "party first". that approach worked really well between 2001 and 2009.

On September 16, 2008, AIG suffered a liquidity crisis following the downgrade of its credit rating. Industry practice permits firms with high credit ratings to enter swaps with limited margin. When its credit rating was downgraded, the company was required to post collateral with its trading counter-parties, and this led to a liquidity crisis. The London unit of the world's largest insurer (by assets) sold credit protection Credit default swaps (CDS) on collateralized debt obligations (CDOs) that had declined in value.[4] The United States Federal Reserve, to prevent the company's collapse, and in order for AIG to meet its obligations to post additional collateral to credit default swap trading partners, announced the creation of a secured credit facility of up to US$85 billion, secured by the assets of AIG subsidiaries, in exchange for warrants for a 79.9% equity stake, the right to suspend dividends to previously issued common and preferred stock.[3][5][6] AIG announced the same day that its board accepted the terms of the Federal Reserve Bank's rescue package and secured credit facility.[7] This was the largest government bailout of a private company in U.S. history, though smaller than the bailout of Fannie Mae and Freddie Mac a week earlier.[8][9]

AIG's share prices fell over 95% to just $1.25 on September 16, 2008, from a 52-week high of $70.13. The company reported over $13.2 billion in losses in the first six months of the year.[10][11] The AIG Financial Products division headed by Joseph Cassano had entered into credit default swaps to insure $441 billion worth of securities originally rated AAA. Of those securities, $57.8 billion were structured debt securities backed by subprime loans.[12] CNN named Cassano as one of the "Ten Most Wanted: Culprits" of the 2008 financial collapse in the United States.[13]

As Lehman Brothers (the largest bankruptcy in U.S. history) suffered a major decline in share price, investors began comparing the types of securities held by AIG and Lehman, and found that AIG had valued its Alt-A and sub-prime mortgage-backed securities at 1.7 to 2 times the rates used by Lehman.[10] On September 14, 2008, AIG announced it was considering selling its aircraft leasing division, International Lease Finance Corporation, in an effort to raise necessary capital for the company.[10] The Federal Reserve has hired Morgan Stanley to determine if there are systemic risks to a failing AIG, and has asked private entities to supply short-term bridge loans to the company. In the meantime, New York regulators have approved AIG for $20 billion in borrowing from its subsidiaries.[14][15]

On September 16, AIG's stock dropped 60 percent at the market's opening.[16] The Federal Reserve continued to meet that day with major Wall Street investment firms to broker a deal to create a $75 billion line of credit to the company.[17] Rating agencies Moody's and Standard and Poor's downgraded their credit ratings on AIG's credit on concerns over continuing losses on mortgage-backed securities, forcing the company to deliver collateral of over $10 billion to certain creditors.[18][17] The New York Times later reported that talks on Wall Street had broken down and AIG may file for bankruptcy protection on Wednesday, September 17.[19] Just before the bailout by the US Federal Reserve, AIG former CEO Maurice (Hank) Greenberg sent an impassioned letter to AIG CEO Robert B. Willumstad offering his assistance in any way possible, ccing the Board of Directors. His offer was rebuffed.[20]


[edit] Federal Reserve bailout
On the evening of September 16, 2008, the Federal Reserve Bank's Board of Governors announced that the Federal Reserve Bank of New York had been authorized to create a 24-month credit-liquidity facility from which AIG may draw up to $85 billion. The loan is collateralized by the assets of AIG, including its non-regulated subsidiaries and the stock of "substantially all" its regulated subsidiaries, and has an interest rate of 850 basis points over the three-month London Interbank Offered Rate (LIBOR) (i.e., LIBOR plus 8.5%). In exchange for the credit facility, the U.S. government will receive warrants for a 79.9 percent equity stake in AIG, and has the right to suspend the payment of dividends to AIG common and preferred shareholders.[3][6] The credit facility was created under the auspices of Section 13(3) of the Federal Reserve Act.[6][21][22] AIG's board of directors announced approval of the loan transaction in a press release the same day. The announcement did not comment on the issuance of a warrant for 79.9% of AIG's equity, but the AIG 8-K filing of September 18, 2008, reporting the transaction to the Securities and Exchange Commission stated that a warrant for 79.9% of AIG shares had been issued to the Board of Governors of the Federal Reserve.[23][7][3] AIG drew down US$ 28 billion of the credit-liquidity facility on September 17, 2008.[24] On September 22, 2008, AIG was officially removed from the Dow Jones Industrial Average.[25] An additional $37.8 billion loan was extended in October. As of October 24, AIG has drawn a total of $90.3 billion from the emergency loan, of a total $122.8 billion.[26]

Maurice Greenberg, former CEO of AIG, on September 17, 2008, characterized the bailout as a nationalization of AIG. He also stated: he was “bewildered” by the situation and was at a loss over how the entire situation got out of control as it did.[27] On September 17, 2008, Federal Reserve Bank chair Ben Bernanke asked Treasury Secretary Henry Paulson join him, to call on members of Congress, to describe the need for case for a congressionally authorized bailout of the nation's banking system. Weeks later, Congress approved the Emergency Economic Stabilization Act of 2008.

DontTreadOnMe wrote:

McGentrix wrote:

Bush didn't word it, Bush signed it. Congress worded it and it was Dodd who put in the bit about bonuses being protected.

link

yeah, he signed it. it's his baby. he was the president, remember?

he, and he alone had the power to kill it. veto ring a bell ?

but you don't address that, only what you want to. and what you want to is invariably what a democrat did or said.

but that's cool. keep on thinking "party first". that approach worked really well between 2001 and 2009.

Are you on drugs?

Heck, we can't even get approval money to take down a sign that says 'we are hiring' because it would cost too much. >.<

The till got left open one way or another and human nature operating without a moral compass did what comes naturally.

Weaving the winds and sophistry won't alter that.

what so special about big business ?

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what so special about big business ?

Its bigness.

might make 'em big rich assholes, though.

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might make 'em big rich assholes, though.

They do say that the winners can laugh..