bail out

AIG Wants Mo' Money

Update: AIG Gets $40 Billion Stake:

In a record bailout of a private company, the government on Monday provided a new $150 billion financial-rescue package to troubled insurance giant American International Group, including $40 billion for partial ownership.

Who is starting to think the bail out is one big sink hole?

The Financial Times article, AIG in Talks for New Bail Out:

AIG is asking the US government for a new bail-out less than two months after the Federal Reserve came to the rescue of the stricken insurer with an $85bn loan, according to people close to the situation.

Fed Refuses to Tell Who They Gave $2 Trillion Dollars To

Transparency? What transparency?

Bloomberg is now working on a FOIA (Freedom of Information Act) just to find out who are the recipients of $2 trillion in taxypayer money.

Fed Defies Transparency Aim in Refusal to Disclose

The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

Insuring The United States Debt

money tree

Here is one scary article, which I have been wondering about with the U.S. spraying money like it grows on trees.

Contained within While bailing out, U.S. is digging itself deeper into debt are some very frightening questions about the federal deficit and insuring against a United States default on their debt:

It's a question debt-rating agencies are asking as they add the bailout to the soaring cost of Social Security and Medicare.

It's something investors are wondering as they have bid up by more than threefold the cost of insuring against a United States default.

Now right now, ratings agencies are not putting U.S. Treasuries into any downgraded status, but look at this quote:

AIG Bail Out Ineffective - Experts Say Should Have Gone Bankrupt

Interesting article in the Washington Post:

A number of financial experts now fear that the federal government's $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing.

Great, now that AIG has already received over $143 billion taxpayer dollars it still maybe tettering on bankruptcy

Finally, The Treasury and FDIC Consider $500 Billion for Homeowners of Bail Out

We're finally seeing the possibility of homeowners in trouble getting a break.

Treasury, FDIC Said to Consider Guarantees to Stem Foreclosures

The U.S. Treasury and the Federal Deposit Insurance Corp. are considering a program that may offer about $500 billion in guarantees for troubled mortgages to stem record foreclosures, people familiar with the matter said

The terms, not official would be:

The plan, which might put as many as 3 million homeowners into affordable loans, would require lenders to restructure mortgages based on a borrower's ability to repay

Treasury Borrowing Needs Now Beyond Belief

Ryan says Treasury borrowing needs unprecedented:

The potential for deterioration in economic conditions, given the contraction in credit, may also affect budget conditions this year - Ryan

They are now seeking private investment:

We all benefit from a deep, liquid Treasury market, and SIFMA and the Treasury Markets Practices Group have the opportunity to take a leadership role in devising and implementing private-sector solutions to current challenges

AP says the Treasury might revive the 3 yr. note:

The Paulson Shopping Spree - Now Insurance Companies Want in

From Paulson Weighs Buying Stakes in U.S. Insurers, Regional Lenders (Bloomberg):

The U.S. Treasury is considering taking stakes in insurers, as it prepares a new round of capital injections targeted at regional banks and other financial companies, a person briefed on the plan said

Some life insurers have asked the government to make the participation of life companies mandatory because firms don't want to identify themselves as needing funds

Mandatory to get taxpayer funds simply because they do not want to identify themselves?

Additional details are how the Treasury didn't anticipant the drop in the markets. Right, they scream Fire in the Theater and are now surprised?

No Limits on Executive Pay in Bail Out - Treasury Guts Measures with Interim Rule

In my opinion the legislation was all for show and had no real provisions to limit executive pay for bailed out financial institutions but now we have an even worse situation.

CBS MarketWatch is reporting the Treasury released interim rules for the banks receiving the $250 Billion

Some of the corporate governance and executive compensation rules in the original bailout legislation have since been softened by interim final rules drawn up by the Treasury as part of its plan to inject capital into banks.

$250 Billion for Banks, FDIC Unlimited insurance on Deposits - Latest "Plan"

New York Times is reporting $250 billion for investing in large and small banks.

The FDIC will give unlimited insurance on non-interest bearing bank deposits.

largest recipients of bail out

Now check out the New York Times graph of who gets the most, already decided. That is $125 billion already doled out to our fab 8 which means there is only half left for anyone else.

At least they are getting preferred stock for the deal.

Supposedly the program was not voluntary and supposedly they will have reduced executive compensation so far ill defined.

Hank getting tough with his buddies? Not too sure since he just handed over billions.