Thursday, October 30, 2008

Is AIG the Next Enron?

I'm afraid it is. In America, too many people see it as the land of get all you can and hold it tight. Standard and reasonable business models have been raped by a corporate and short term mindset that is far from sustainable. This greed has penetrated real estate, Wall Street and virtually every sector of American life, creating chaos for those left behind. Somehow, the wealthy think they are insulated from a complete global collapse. If the spine goes, it's all gone. They are killing the golden goose and the greed-stricken don't give a damn.

The American International Group (AIG) is tearing through $123 billion (with a B) in public money. Here's the article and a quote.
AIG has declined to provide a detailed account of how it has used the Fed’s money. The company said it could not provide more information ahead of its quarterly report, expected next week, the first under new management. The Fed releases a weekly figure, most recently showing that $90 billion of the $123 billion available has been drawn down.

AIG has outlined only broad categories: some is being used to shore up its securities-lending program, some to make good on its guaranteed investment contracts, some to pay for day-to-day operations and — of perhaps greatest interest to watchdogs — tens of billions of dollars to post collateral with other financial institutions, as required by AIG’s many derivatives contracts.

Message to US House Representative Eric Cantor:

This is why you don't throw billions of taxpayer dollars at people who have quite possibly committed financial crimes they will later be indicted for. They don't teach that in law school?

No comments: