Steve Pluvia

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  • What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup
    @stoneweapon:

    "Why fund a leveraged wager of CDSs with taxpayers money?"

    I answered why we cannot let AIG fail; if we let them fail this happens:

    -- All foreign held debt insured by AIG blows up...
    -- US treasury and corporate debt immediately has zero credibility;
    -- US corporations and have zero borrowing power for short term trade and expansion.
    -- Trade grinds to a halt as foreign partners no longer honor purchase orders from US corporations.
    -- Run on all banks;
    -- The dollar gets crushed; and,
    -- The US has very little ability to jump start the US economy with spending

    Most do not understand Lehman, Merrill et al packaged ANYTHING with a revenue stream almost ANYWHERE IN THE WORLD into an asset back security, then created synthetic "bonds" when they found it easier than rounding up assets with revenue.

    Many of these were insured by AIG. If AIG fails within a week we have a worldwide meltdown. The idea of letting AIG fails demonstrates the author of this article has no idea what he's talking about or is supremely ignorant.

    A simpler example is this: Imagine New Orleans after Katrina -- except we let every insurance company out of their obligation to pay policy holders to rebuilding homes/properties. Not only would New Orleans no longer be a city, the lack of confidence in all insurance would go down the toilet.

    AIG is a big bag of sh*t, no doubt about it. But letting AIG fail instantly makes commercial paper world wide into toilet paper.

    Nov 26 13:36 pm |Rating: +1 -2 |Link to Comment |View article
  • What Obama Needs to Know about Tim Geithner, the AIG Fiasco and Citigroup
    You, lost me early in this overly-long soap-box stint.

    Are you *seriously* suggesting the U.S. let AIG blow-up?

    So let me see if I get your point...

    Let AIG fail; All foreign held debt insured by AIG blows up...
    -- US treasury and corporate debt immediately has zero credibility;
    -- US corporations and have zero borrowing power for short term trade and expansion.
    -- Trade grinds to a halt as foreign partners no longer honor purchase orders from US corporations.
    -- Run on all banks;
    -- The dollar gets crushed; and,
    -- The US have very little ability to jump start the US economy with spending

    Oy freakin vey. Your idea is ridiculous. Clearly you don't understand the implications of what you propose.

    Nov 26 10:04 am |Rating: +3 -3 |Link to Comment |View article

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