Off topic: Can someone explain why AIG and the like are being bailed out?

[CanGas]

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Ok off topic here. But can you explain to a Canadian why AIG and the other 4 big banks are being bailed out?

From what I understand it is the big 5 that are responsible for essentially all this CDS crap. It is also my understanding that they mostly owe it to each other and some other international groups. I also understand that the total liabilities is somewhere in the neighbourhood of a couple hundred TRILLION dollars! :-O

The way I see it is they were just printing this fake money then trading it back and forth. Nudge, nudge, this is piece of paper is worth a trillion dollars. Oh yeah, ok I'll insure your for that trillion dollars. It's not real money!

Why not just say screw them. AIG fails and does not insure anything. The banks don't get their trillion dollars but they never had it in the first place.

The thing is the buyouts are happening with REAL money to pay out FAKE money. Essentially turning the FAKE money into REAL money at the cost of you poor sucker tax payers.

And then the bailouts are just a drop in the bucket. A couple hundred TRILLION dollars is larger than the entire real world GDP! The buyouts of a Trillion here and a Trillion there does nothing and is just

Thank god here in Canada our socalist government has some balls to truly regulate and say to the banks they have to have x % of capital to cover their debts. Heck they just increased the % of capital required and a couple of our banks had to issue some new stock to raise the capital to cover their position. None of this free money crap or buying back subprime loans. They want money? Take their real estate, take their hard capital and assets, make them re-issue stock, don't just give them free money or buy their crappy debt that no-one else wants. If Chrysler and GM can't make cars anyone else wants let them fail and Toyota and Honda and expand and make more jobs, don't subsidize the losers.

If your wondering why a Canadian cares its because you guys are our biggest trading partner. You kill your economy ours follows. I mean how do you ever expect to pay off the debt you are accruing! What productivity gains can you realistically make? What resources do you have left? How can you service your debt without making HUGE cuts and sacrifices that I honestly don't think your population can stomach or tolerate!

Seriously, I should be worrying about my exam but I have had to stop reading about your economy because there is bloody nothing I can do about it and it scares me to death. I've seriously woken up at 3 am and had to read some Co-existing to take my mind of things. (Yes, I know I need help).

CanGas

P.S. I'm going to be peaking perfectly for the written exam Monday, Tuesday. Then 2 months to coast and smoke the orals at the end of May.
Residency is nearly over, residency is nearly over, residency is nearly over....

I'll tell you what though. No fancy car or big house for me after graduating. Buying me a Honda and have my eye on a nice piece of property. Buy that property, rent for 2 years while I sock away a 50% of my income each year, pay off property in 2 years, then take out 5 year mortgage to build dream home while sitting on my own JET sponsored FU account (TM) while still socking away 20% of income to retirement. Yep even with socialized medicine Ièm still going to be doing quite nicely, corporate taxes are 21% so self maintained pension plan can accrue at lower taxes, salary I pay myself is 45%+ at top marginal tax rate but no dealing with insurance companies, no health insurance premiums for my family (included in my 45% tax), total malpractice insurance of $3800k/yr via the SOLE PHYSICIAN OWNED CANADA wide malpractice carrier, EXTREMELY lower rate of getting sued, and oh yeah, after 5 years of undergrad at an excellent public school (ALL the good universities in Canada are public), 4 years of medical school and 5 years of residency by total outstanding debt is 40k and that is because I have been maxing out my RRSP (essentially 401k) each year to a total accumulated value of $32k (better before the damn crash) for a total current net worth of -8k.

I really don't know why so many bash the Canadian "socialist" system. Pure capitalism greed takes over and the rich and those without ethics take everyone to the cleaners. Not saying we have the perfect system. Sure if you have money you will get better care in the us (from a wait time perspective anyways). We spend less per capita on health care but have better infant mortality, a longer life expectancy and better cancer survival prognosis. You might wait 2-3 years for your total hip but you need your cancer therapy you will get it pronto and you will not go bankrupt because of it. Really the nightmare stories do happen but they happen everywhere and often have extra info that is not included (eg. woman who had to go to the USA for cancer therapy and is out 60k but they don't mention she had stage 4 Ovarian CA, deemed palliative and went to the USA for unproven, experimental therapy). We try to keep costs down by not paying for crap that does not work.

 

[popsicle09]

AIG had to be bailed out for many reasons.

One is that this was a way for the US Fed to funnel money to foreign banks without Congressional approval. They give it to AIG, which in turn gives it to the Swiss/French/British/etc. This was a way for the US Fed to prop up foreign banks without having to deal with the uproar about the US money going to the foreigners.

Secondly, AIG has sold this "insurance" (without any desire to pay it out, ever) as a sideshow to the AAA-rated securities, both sold by the mega-tons to the European banks. These banks are now finding themselves in possession of mountains of garbage which they still list as "assets" ONLY because of this "insurance." If the insurance (however imagined) were to disappear, it would instantly render the largest European banks insolvent.

Thirdly, AIG was bailed out due to the corruption and cronyism that is dominant in the US political sphere.

 

[Impromptu]

Doctors get badmouthed because drug companies liked to give them pens, yet Obama's top economic advisors received millions of dollars from the companies that are receiving billions in bailout money.

http://www.nytimes.com/2009/04/04/us/politics/04disclose.html?_r=1&ref=politics

Since this is being reported in the NYTimes (AKA Varsity Obama Cheerleading Squad), you know it is much worse than they report. No one goes to Washington to help America, they all go to get rich off the taxpayer's back. Look at any Senator, when they leave office, they soon become multimillionaires (more so than they were before they went).

Our government is corrupt.

Go to one of the Tea Parties being held across the country on April 15th, tax days. They will be held in the evening, so working people can attend and protest. http://taxdayteaparty.com/, http://www.reteaparty.com/

[YOUTUBE]http://www.youtube.com/watch?v=uqoSa9JP5Zk[/YOUTUBE]

 

[DO4lifer]

bailouts were given out BEFORE obama. you're pal Georgie is the one to thank buddy! Here read...check the date
http://online.wsj.com/article/SB122156561931242905.html

Doctors get badmouthed because drug companies liked to give them pens, yet Obama's top economic advisors received millions of dollars from the companies that are receiving billions in bailout money.

http://www.nytimes.com/2009/04/04/us/politics/04disclose.html?_r=1&ref=politics

Since this is being reported in the NYTimes (AKA Varsity Obama Cheerleading Squad), you know it is much worse than they report. No one goes to Washington to help America, they all go to get rich off the taxpayer's back. Look at any Senator, when they leave office, they soon become multimillionaires (more so than they were before they went).

Our government is corrupt.

Go to one of the Tea Parties being held across the country on April 15th, tax days. They will be held in the evening, so working people can attend and protest. http://taxdayteaparty.com/, http://www.reteaparty.com/

[youtube]uqoSa9JP5Zk[/youtube]

 

[Impromptu]

bailouts were given out BEFORE obama. you're pal Georgie is the one to thank buddy! Here read...check the date
http://online.wsj.com/article/SB122156561931242905.html

"My buddy" George W. Bush did indeed start the bailout frenzy. I make no pretenses otherwise. I simply pointed out the corruption in the current administration. Obama's top economic advisors are receiving millions from the very companies that they are advocating should receive billions of taxpayer money. That is corruption.

Obama (AKA George Bush #3) is printing money as fast as those little printers can run. In 1971 we left the gold standard, and instead borrowed the money through bonds or from other nations, inflation has been our constant companion since then. About a week ago we stopped borrowing money (even China didn't have the amount Obama wanted to borrow) and simply began printing it (Weimar Republic, wheelbarrows full of worthless paper money, anyone?). The cause of inflation is when government prints more money. The $4 trillion we have used since Labor day more than doubles the annual US budget, (including our various wars). Obama's 10 year budget optimisitcally only slightly more than doubles our national debt, which took about 230 years to build to its current level.

Long term inflation is going to be out of control. On this board we often talk about salaries, but in 10 years with the amount of money Obama is printing a $300,000/year salary is going to be worth $150,000 in today's money. That is where this is heading. Weimar Republic style inflation may soon follow.

What the government is doing to our nation and our children is horrendous. They are saddling them with a debt and burden that they won't be able to repay. Imagine everyone in the country carrying around a "medical student loan" sized debt. Already today, each US household has a debt portion of about $120,000. That is going to double under Obama's most optimistic forcasts.

This country needs a revolution. Preferably not a French styled revolution (lots of bloodshed), but a top to bottom cleansing of the government. There are very few politicians who are not corrupt. Oust every single one of them for corruption (false positives will be low). Chop government down to size. Will this happen? Are too many on the government dole? It is impossible for that to last forever. It will crumble.

Finally, a few quotes from the founding fathers, who studied prior governments the way we study medicine.

"…the Federal Government is our servant, not our master!" Thomas Jefferson

"It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds." Samuel Adams

"When once a republic is corrupted, there is no possibility of remedying any of the growing evils but by removing the corruption and restoring its lost principles; every other correction is useless or a new evil." Thomas Jefferson

"Government is not reason; it is not eloquence. It is force. And force, like fire, is a dangerous servant and a fearful master." George Washington

"A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government…" Thomas Jefferson

"I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt…If we can prevent the government from wasting the labors of the people, under the pretense of caring for them, they will be happy." Thomas Jefferson

 

[dhb]

Finally, a few quotes from the founding fathers, who studied prior governments the way we study medicine.

“…the Federal Government is our servant, not our master!” Thomas Jefferson

“It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people’s minds.” Samuel Adams

“When once a republic is corrupted, there is no possibility of remedying any of the growing evils but by removing the corruption and restoring its lost principles; every other correction is useless or a new evil.” Thomas Jefferson

“Government is not reason; it is not eloquence. It is force. And force, like fire, is a dangerous servant and a fearful master.” George Washington

“A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government…” Thomas Jefferson

“I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt…If we can prevent the government from wasting the labors of the people, under the pretense of caring for them, they will be happy.” Thomas Jefferson

👍

 

[DO4lifer]

Sounds like a Ron Paul supporter to me. I'm not a fan of this two-party system that has a chokehold on our country. We do need change, but you know it takes desperate times to get such desperate measures. We may be headed that way.

Maybe time to buy those gold Vienna philharmonic coins from Monex.

"My buddy" George W. Bush did indeed start the bailout frenzy. I make no pretenses otherwise. I simply pointed out the corruption in the current administration. Obama's top economic advisors are receiving millions from the very companies that they are advocating should receive billions of taxpayer money. That is corruption.

Obama (AKA George Bush #3) is printing money as fast as those little printers can run. In 1971 we left the gold standard, and instead borrowed the money through bonds or from other nations, inflation has been our constant companion since then. About a week ago we stopped borrowing money (even China didn't have the amount Obama wanted to borrow) and simply began printing it (Weimar Republic, wheelbarrows full of worthless paper money, anyone?). The cause of inflation is when government prints more money. The $4 trillion we have used since Labor day more than doubles the annual US budget, (including our various wars). Obama's 10 year budget optimisitcally only slightly more than doubles our national debt, which took about 230 years to build to its current level.

Long term inflation is going to be out of control. On this board we often talk about salaries, but in 10 years with the amount of money Obama is printing a $300,000/year salary is going to be worth $150,000 in today's money. That is where this is heading. Weimar Republic style inflation may soon follow.

What the government is doing to our nation and our children is horrendous. They are saddling them with a debt and burden that they won't be able to repay. Imagine everyone in the country carrying around a "medical student loan" sized debt. Already today, each US household has a debt portion of about $120,000. That is going to double under Obama's most optimistic forcasts.

This country needs a revolution. Preferably not a French styled revolution (lots of bloodshed), but a top to bottom cleansing of the government. There are very few politicians who are not corrupt. Oust every single one of them for corruption (false positives will be low). Chop government down to size. Will this happen? Are too many on the government dole? It is impossible for that to last forever. It will crumble.

Finally, a few quotes from the founding fathers, who studied prior governments the way we study medicine.

“…the Federal Government is our servant, not our master!” Thomas Jefferson

“It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people’s minds.” Samuel Adams

“When once a republic is corrupted, there is no possibility of remedying any of the growing evils but by removing the corruption and restoring its lost principles; every other correction is useless or a new evil.” Thomas Jefferson

“Government is not reason; it is not eloquence. It is force. And force, like fire, is a dangerous servant and a fearful master.” George Washington

“A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government…” Thomas Jefferson

“I place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared. To preserve our independence, we must not let our rulers load us with perpetual debt…If we can prevent the government from wasting the labors of the people, under the pretense of caring for them, they will be happy.” Thomas Jefferson

 

[pgg]

Maybe time to buy those gold Vienna philharmonic coins from Monex.

Right, we all know how well timing the stock market usually works out, guess we can try shiny commodities next. Surely the same principles don't apply there. 🙂

Even better, the curve looks a lot like the Dow circa September 2008. Never been a better time to buy indeed.

And just in case I get hotlink-owned: http://goldprice.org/charts/history/gold_20_year_o_usd.png

Goldbugs are funny.

 

[DO4lifer]

i think the economics of it all are really screwed up when i factor in my school loans and the freakin interest rates of 6.5%.