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AIG hires law firm to draw up bankruptcy papers: report

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posted on Sep, 16 2008 @ 05:36 PM
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AIG hires law firm to draw up bankruptcy papers: report


www.reuters.com

NEW YORK (Reuters) - American International Group Inc has hired law firm Weil Gotshal to draw up bankruptcy papers, the New York Times reported on Tuesday.

AIG could file for bankruptcy as soon as Wednesday if a financing solution is not reached, according to the Times, citing a person briefed on the matter.
(visit the link for the full news article)




posted on Sep, 16 2008 @ 05:36 PM
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The crapola has hit the fan.

Dow -1000 tomorrow.

Bloodbath!!!!

www.reuters.com
(visit the link for the full news article)



posted on Sep, 16 2008 @ 06:33 PM
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CMP level - rising!

FYI, 'CMP' refers to crap my pants.

If AIG goes, the worldwide CMP Level will be about 9/10.



posted on Sep, 16 2008 @ 06:36 PM
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I have faith that the Fed will bail out AIG tomorrow with a nice loan of 70-75 billion. Its not set in stone, but it is absolutely necessary. They didn't cut rates, but they cannot afford to have the largest insurer to go belly up the same week as Lehman Brothers.

Just the same, if you don't see the fed do anything about AIG loan tomorrow, or worse, they decide against bailing AIG out, tomorrow and thursday will be ugly.



posted on Sep, 16 2008 @ 06:39 PM
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Fed Close to Deal to Give A.I.G. $85 Billion Loan

source




In an extraordinary turn, the Federal Reserve was close to a deal Tuesday night to take a nearly 80 percent stake in the troubled giant insurance company, the American International Group, in exchange for an $85 billion loan, according to people briefed on the negotiations.

In return, the Fed will receive warrants, which give it an ownership stake. All of A.I.G.’s assets will be pledged to secure the loan, these people said.

The Fed’s action was disclosed after Treasury Secretary Henry M. Paulson and Ben S. Bernanke, president of the Federal Reserve, went to Capitol Hill on Tuesday evening to meet with House and Senate leaders. Mr. Paulson called the Senate majority leader, Harry Reid, Democrat of Nevada, about 5 p.m. and asked for a meeting in the Senate leader’s office, which began about 6:30 p.m.

The Federal Reserve and Goldman Sachs and JPMorgan Chase had been trying to arrange a $75 billion loan for A.I.G. to stave off the financial crisis caused by complex debt securities and credit default swaps. The Federal Reserve stepped in after it became clear Tuesday afternoon that the banking consortium would not be able to complete the deal.

Without the help, A.I.G. was expected to be forced to file for bankruptcy protection.

The need for the loans became necessary after the major credit ratings agencies downgraded A.I.G. late Monday, a move that likely to have forced the company to turn over billions of dollars in collateral to its derivatives trading partners worsening its financial health.

Until this week, it would have been unthinkable for the Federal Reserve to bail out an insurance company, and A.I.G.’s request for help from the Fed of just a few days ago was rebuffed.

But with the prospect of a giant bankruptcy looming — one with unpredictable consequences for the world financial system — the Fed abandoned precedent and agreed to let the money flow.



Looks like the Federal Reserve is bargain shopping again.



posted on Sep, 16 2008 @ 06:40 PM
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The economic current situation reminds me of this scene from V for Vendetta:

www.youtube.com...

Agree?



posted on Sep, 16 2008 @ 06:42 PM
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reply to post by grimreaper797
 


Unless of course, they WANT this to happen (an engineered crash of our financial system.)

Obviously not everyone wants this to happen, competing agendas among the elites I'm sure. However there has been talk for years now about the plan to replace the dollar and enter a new era of globalism. We are likely seeing this take shape at a high enough rate for more people to finally notice.



posted on Sep, 16 2008 @ 06:45 PM
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reply to post by airteck
 


You should be happy. If they don't, we can't begin to predict the damage that it would cause. I'm glad that the Fed has decided to act. It became clear today that if they didn't nobody else would in time. AIG needs that money ASAP, not thursday, not next week, but ASAP.



posted on Sep, 16 2008 @ 06:49 PM
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reply to post by Ionized
 


Or the short term goals of greedy individuals put our economy in a tough position. Quite a few people have made their money on the bad policies made in the past few years.

Causing a WORLD economic failure is not profitable. It sets EVERYONE way back. Production will slow dramatically, technology sectors will be hit hard, and most importantly, the currency that gives them all there power will be dramatically reduced.

Right now the people on top, are on top because they know how to keep this type of market afloat. This kind of speculative market makes them money. The last thing anyone wants is a collapse. Everyone will lose.



posted on Sep, 16 2008 @ 07:09 PM
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reply to post by Evasius
 


I like this version better: www.youtube.com...

Thanks for the eerie moment, though. I'm nice and creeped out now.



posted on Sep, 16 2008 @ 07:10 PM
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This is when having a Central Bank is good...if they didn't control interest rates and instead did this along with some other open market operations, I wouldn't mind the Fed one bit.



posted on Sep, 16 2008 @ 07:13 PM
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Its looking like its gonna be a long way down.


See ya guys at the bottom!



posted on Sep, 16 2008 @ 07:28 PM
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reply to post by airteck
 


Ok it looks like they are going to do the bridge loan.

We may not have a total collapse tomorrow!!



posted on Sep, 16 2008 @ 07:34 PM
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Originally posted by grimreaper797

Right now the people on top, are on top because they know how to keep this type of market afloat.



Hmmm.... afloat or perhaps profitable for themselves. (?)


This kind of speculative market makes them money. The last thing anyone wants is a collapse. Everyone will lose.


"Everyone" will never include ""the people on top"... rest assured.

Historically.... Deja Vu's are frighteningly crystal... clear.

Rinse, lather, Repeat.... comes to mind.


 



posted on Sep, 16 2008 @ 07:48 PM
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Can someone help me out with this. I am sure I am not the only one.
What are the effects of this fork in the road?

If the FED does not bail them out, what are the effects? Collapse? Correction?

If the FED does bail them out, what are the effects? Softer landing? Bandaid?



posted on Sep, 16 2008 @ 08:03 PM
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reply to post by lardo5150
 


Band-aid. When you NEED 80 Billion just to stave off bankruptcy, you've got real problems. The US can consider itself another 80B in debt with Wamu and others to follow. The fundamentals of the problem have not changed and are set to worsen with Alt-A mortgage resets on the horizon and lending locked up.

Two Weeks: Fannie Freddie, Lehman, Merrill, AIG....



posted on Sep, 16 2008 @ 08:15 PM
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reply to post by lardo5150
 


No bailout= Dow falls 1000 points tomorrow, if it even opens at all.

Bailout= AIG doesn't declare bankruptcy, and survives another day.

I think that things are so bad that even with a bailout we are going to see Dow 9000 within the next month.


The thing that really sucks is that the continuous bailout cycle we are in is like treating a gunshot wound with some bandaids and neosporin. Maybe we can stop the bleeding for 15 min, but the collapsed lung isn't fixed and the patient is going to die.

It's time to stock up on canned goods and shotgun shells.



posted on Sep, 16 2008 @ 08:30 PM
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reply to post by HimWhoHathAnEar
 


I think 13.3 Billion they need it just to stay afloat short term, the rest is a line of credit they have for two years.

I really believe that the rest of the financials that need to raise capital might as well start to merge or file for BK tomorrow, this is the last one that the governemnt can absorb right now. The rest are now on their own.



posted on Sep, 16 2008 @ 09:08 PM
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reply to post by Bunch

this is the last one that the governemnt can absorb right now. The rest are now on their own.

No disagreement with you, but I was curious as to how you made that conclusion. I wouldn't think they could have bailed out as many as they have.

TheRedneck



posted on Sep, 16 2008 @ 09:59 PM
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As much as I hate to see the Fed take action in private matters, in the long run it will probably be to our benefit; just like with Freddie Mac and Fannie Mae.

From what I understand, if the government hadn't of talked JP Morgan into buying Bear Stearns, the repurcussions of that failure would of done some major damage. The failing of AIG would be tremendous nonetheless; hopefully something will be done. I guess that Goldman Sachs and JP Morgan will not be lending them the money if the government is involved.

They made rules for this after the 80's banking crisis; however it seems that it really didn't matter as these firms chose to invest in risky investments anyways.

Bank of America basically being forced to buy Merrell Lynch also bothers me; but if they failed I'm sure it would be bad, but not as bad as AIG failing. Bank of America and Goldman Sachs, if I remember right, are the only ones it seems who have not wrote off losses. I expect Citi to write off $5-7 billion more, but thats for another day.

I don't know if the Dow would drop 1000 points, but it would probably be at least between 500-750. Some idiot investors would be snapping up the falling stocks giving a false surge in stock prices only to see them lose their gains later.

In the end, this mess can be cleaned up...it might take a few years, but it will happen.




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