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View Diary: AIG's Ties to McCain, Bush & China (36 comments)

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  •  I notice that you completely (1+ / 0-)
    Recommended by:

    missed or ignored my point.  

    The people who purchased insurance through AIG purchased insurance with a AM BEST top rated insurance company (Up until just recently. I assume, based upon recent financial developments that AIG has been down rated.)  They most likely had no knowledge, and no way to obtain the knowledge, of AIG's risky financial dealings.  All they knew was that they were buying their insurance from a big and safe insurance company.

    In your world, those people take it in the shorts because the board of directors of AIG made risky financial decisions in other sectors of the company.  My point is that, if AIG had fallen, it would have had a huge impact on the lives of everyday people.  That would also have had a huge ipact on the election.  The republicans couldn't let that happen.  Thus the bail out.

    Do I see the bail out as a good thing?  I see it as something that keeps people in their homes and helps them recover from car accidents and other tragedies.  I'm in the insurance industry.  I obviously look at this from a very different perspective than you.

    •  recommended and appreciated (0+ / 0-)

      A well reasoned response.  I appreciate the time you took to put this into words.  I see a lot of bad in what those evil Republicans have managed since we lost the house and senate.  Unfortunately, I also see that the financial world cannot manage to exist without moral hazard.  I'm not familar with AM Best so will be doing some reading to learn more.  

      I am of the opinion that the insurance industry cannot operate as if they are immune from bad decisions nor can they be allowed to take great risk without the potential of great injury.  When I look at the toxic mortgages in AIG's portfolio, I see a bunch of fund managers who felt compelled or incentivized to generate greater and greater returns.   To do so, they had to incur greater and greater risk.  Big oops but lets agree that if they were buying standard 80% mortgages on borrowers with 750 scores at 4%, AIG wouldn't have this problem, now would they?

      We must agree to disagree.  I think that AIG wrongfully mad a series of negligent and selfish decisions.  Unfortunately for the consumer, its still not right for Uncle Sam to take on 85bln of toxic assets or loan swaps or whatever and AIG continues to operate.  I pay my fair share of taxes and I'll toss it out there...I make 62k.  My little girl needs braces and I might have to put her off to pay for Joe Schmoe's blown up house insurance policy.  Thats crap. We're all in this together but damn, man....

      How about we just screw the share holders and negotiate a purchase of assets by General RE or somebody?  At a minimum, the shareholders should lose everything.

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