AIG bailed out...

I have been worrying for a while, I mean all the spending on borrowed money it was bound to happen sooner rather than later, there is only so much equity within the western world and well its about to run out!

Stelly
 
I personally hope that this is near the bottom now, one big major scalp, HBOS in trouble, and AIG, but I dont think that its over yet, I can see another major fall today in the FTSE 100... below 5k at least

Stelly
 
How does making a company become state owned bring it stability? Surely if this is done with too many big companies the state could run out of funds resulting in everything breaking down?

I think i have a very poor understanding of how it all works but surely the federal reserve can't have a bottomless well to keep producing these rescue packages.
 
Hmm I've a phone interview with Nationwide tomorrow, guess I shouldn't get my hopes when financial sector is in so much turmoil.
 
If I had to make a guess I would say it’s the change in management that makes the difference, when its private the company only cares about making profits and will take risks but when its public owned the people in charge only care about keeping it stable not making profit or making money for the share holders. (This is a guess and I am in no way an economics expert)
 
AIG is an insurance firm - also had bonds issued etc.

they even insured lehmans 25bank st in wharf iirc to pay their rent!

they've got their hands everywhere - trillions money around AIG.

what annoys me is fed bailed AIG, but wouldnt bail Leh, even thou Leh caused the majority of the problems AIG getting now - mostly from y/days market spew.
 
So you clever economist people know if any more British financial companies are going to follow suit and start going bust?
 
jak731 said:
How does making a company become state owned bring it stability? Surely if this is done with too many big companies the state could run out of funds resulting in everything breaking down?

I think i have a very poor understanding of how it all works but surely the federal reserve can't have a bottomless well to keep producing these rescue packages.
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yes, it's a risk new-given to tax payers - not good

but if they dont the whole worlds financial market goes messed up

the reason AIG is in the crud today is becuase Lehman didnt get bailed a week ago - it's a horrid circle.
 
neoboy said:
So you clever economist people know if any more British financial companies are going to follow suit and start going bust?
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ha just said in the Lehman thread an hour or two before this came - that more will come.

dw a UK bank in the next 6 months i reckon will be bought or collpase too.

EDIT: (I worked at Lehman)
 
jak731 said:
I think i have a very poor understanding of how it all works but surely the federal reserve can't have a bottomless well to keep producing these rescue packages.
Click to expand...

Sure they do, the Fed. issues the dollars. The only consequence is that the $12tn of external debt looks riskier and riskier to the countries holding it and they will be less likely to allow the US to accrue more external debt. Bad news for a country running a trade deficit.
 
neoboy said:
Hmm I've a phone interview with Nationwide tomorrow, guess I shouldn't get my hopes when financial sector is in so much turmoil.
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You should be fine. Nationwide is very secure and the fact that it's just agreed a deal to take over 2 smaller societies (Cheshire and Derbyshire) shows that it's in a reasonable strong position. That 'merger' would be more for you to worry about (with staff from the other societies being given NW jobs) than the current state of the financial markets.
 
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