Fed's to loan AIG $85 Billion Dollars

[drmaul]

http://www.iht.com/articles/2008/09/17/business/17insure.php

...I've got a home loan, student loan I wish the Fed's would bail me out of!!!!:twitch

[BornAgain123]

http://www.iht.com/articles/2008/09/17/business/17insure.php

...I've got a home loan, student loan I wish the Fed's would bail me out of!!!!:twitch

On a side note-watch out for 9/30, b/c this is the end of FYE '08 for the fed government.(of course, a new budget gets put into place for '09 starting 10/01)

Pt being that not only we'll have record-breaking budget deficits, but with the government also eating up Fannie and Freddie, and now AIG, the deficit will only explode.

Things will get awefully interesting in the coming weeks. What will China do with all the T-Bills they loaned us? Will it come to a point where they'll just drop the dollar altogether? Same with Russia?

[drmaul]

On a side note-watch out for 9/30, b/c this is the end of FYE '08 for the fed government.(of course, a new budget gets put into place for '09 starting 10/01)

Pt being that not only we'll have record-breaking budget deficits, but with the government also eating up Fannie and Freddie, and now AIG, the deficit will only explode.

Things will get awefully interesting in the coming weeks. What will China do with all the T-Bills they loaned us? Will it come to a point where they'll just drop the dollar altogether? Same with Russia?

Fannie and Freddie are "Off Book" debts according to OMB.
...source: http://news.yahoo.com/s/nm/20080912/pl_nm/fannie_freddie_budget_dc

I'm suprised about the Russian situation. Didn't see that coming but..who knows what's next. The US financial markets are in a tail spin...my retirement (stocks, bonds, real estate) all drying up...but, hey, it's only paper :heh

[Hootmon]

Fed's to loan AIG $85 Billion Dollars The key word this time is 'loan'. Its isnt a 'bailout' as people keep suggesting. AIG is expected to pay it back, presumably with interest.

[Issachar]

I hope you're right Hootmon, but what sometimes happens in these cases is after the "loan" the company goes into bankruptcy and doesn't repay the loan. Sometimes they even sell off what is good about the company and make it worth even less. Tough to collect 85 billion in collateral from any entity.

Issachar

[drewin11]

The Fed will own 79% of AIG and will loan them $85 billion with a nice 11.5% interest rate. So yes it is a loan however if they will be able to repay it or not is another question...

[BornAgain123]

The key word this time is 'loan'. Its isnt a 'bailout' as people keep suggesting. AIG is expected to pay it back, presumably with interest.

It will be easier said than done.

[Cindy S.]

Under the deal, the Federal Reserve will provide a two-year $85 billion emergency loan at an interest rate of about 11.5 percent to AIG, which teetered on the edge of failure because of stresses caused by the collapse of the subprime mortgage market and the credit crunch that ensued. In return, the government will get a 79.9 percent stake in AIG and the right to remove senior management.
http://ap.google.com/article/ALeqM5ixg-4P2etT9jxXUbTh4srUjbeNugD938GHE80

[GodwithUS]

I don't know why you and I should be responsible for giving a loan to companies that have been mismanaged. It doesn't make sense. These companies should be weeded out.

[Ralph77]

We're going to get a socialist type government where they know whats best for us even if our founding fathers didnt want it to begin with....wait'll they bail out the auto companies and the airlines next...can you say government control.....