AIG has turned into the worst brother-in-law you could have in the family. A money-losing blob that just won’t go away. The government has turned into the perfect enabler relative that just won’t admit when all is lost and to simply cut bait.
On October 10, 2008 AIG received $ 85 Billion. It was my first mention of AIG and I wrote “The downside is that I highly suspect this will be nowhere near the amount of money that AIG ends up needing.”
On September 17, 2008 I wrote about AIG receiving yet another chuck of cash. This time it was $40 Billion. I wrote “Matter of fact, I am going to say it again; I highly suspect this STILL will not be the end of it. Companies like this seem to always keep coming back to the government trough (I hope I am wrong).”
Now, AIG is back again (surprise!) and the government is handing them another $30 billion. More taxpayer money going to a company that can’t seem to get their sh*t together.
When will government understand bailing out companies, in a capital market, is not the right answer? Most of the bailout companies, I am sad to say, will still end up failing. The only catch is that they will blow through billions of taxpayer dollars before they do fail!
Let them fail and the next company, that is trying to do everything right, will step up to the plate!
Fine, I suppose this is where you look for some witty insights to my mind. A "bio" of sorts. Here is the deal... I ride motorcycles, smoke cigars, golf, kayak, fly, race my car through the mountains, write (a lot), and travel extensively. I am almost old enough not to care what other people think about me...almost. ~Godfadr
Out of curiosity…if AIG is going to report a quarterly loss of $60 Billion, how is the government giving them $30Billion going to solve anything regardless of their intent?
Hey now Mike, don’t start using that fuzzy math stuff. We can address that loss when we send AIG another check!
Sorry Godfather! what ever was I thinking by trying to bring in theroy based stuff like mathematics, which obviously dont rest on a solid foundation of logical order?
The moniker of “too big to fail” is the tag that the US puts on companies when it fails to take the advice it blithely dishes out to other countries, via the IMF and the World Bank, to let insolvent companies fail. The US is terrified of creating “zombie” corporations – as presently exist in Japan for example – that are simply propped up by state cash. Ironically, that is exactly what they’re creating now with the benefit of a fiat currency that can literally be printed indefinitely.
From halfway around the world, in Asia, we watch amazed and aghast.