Federal takeover of AIG planned

NEW YORK (CNNMoney.com) -- The federal government is reportedly on the verge of taking over crumbling insurer American International Group in an $85 billion deal that could leave the company in the Federal Reserve's hands.

According to published reports late Tuesday, officials decided they must act lest the nation's largest insurer file bankruptcy. Such a move would roil world markets since AIG (AIG, Fortune 500) has $1.1 trillion in assets and 74 million clients in 130 countries.

The plan calls for the Federal Reserve to take an 80% stake in AIG, the New York Times reported. The insurer's assets would be used to secure the loan.

A bailout of AIG would mark the most dramatic turn yet in an expanding crisis that started more than a year ago in the mortgage meltdown and credit crunch and is now toppling mainstay Wall Street players.

The government had resisted throwing a lifeline to AIG, hoping to entice other firms to set up a $75 billion rescue fund. Officials opted not to bail out Lehman Brothers, which filed for bankruptcy on Monday. But by Tuesday night, it became clearer that the financial industry would not step in to help AIG, which has a greater reach into other financial companies and markets than Lehman does.

http://money.cnn.com/2008/09/16/news/companies/AIG/?postversion=2008091620

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"The fundamentals of our economy are strong."

-John McCain

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I am really scared that the recent takeovers of now AIG, IndyMac, Freddie, and Fannie are signs of a movement towards socialism. I have posted a blog with other information about this takeover. Someone please tell me it is not as bad as it sounds!

Government Takeover: is it socialism?

Nate Stockard is the vocal, opinionated author of Average Politics, a blog about politics for average people. Shut him up at Average Politics.

Nate Stockard is the vocal, opinionated author of Average Politics, a blog about politics for average people. Shut him up at Average Politics.

'It is not as bad as it sounds'.
Feel better ?

I thought the exact same thing this morning when I heard the latest.

Pay no attention to that man behind the curtain.

Bailing these companies out is one thing, probably necessary to protect the public interest. However, at the least the upper management big boys, CEO, CFO, etc, should be fired or demoted with significant loss of pay. Even investigated for wrongdoing.

"We're all riding on the Hindenburg, no sense fighting over the window seats"-Richard Jenni

"We're all riding on the Hindenburg, no sense fighting over the window seats"-Richard Jenni

I'm sure these CEO's will be rewarded with huge golden parachutes, just like Carly Fiorina.

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