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« Obama Pummels McCain on Economic Policy | Main | Russia Pledges Military Support to Georgia's Separatist Regions; Russians Continue to Squabble with Saakashvili Over Who Started the Fight »

September 17, 2008



Why is it that our government can rescue billion dollar corporations, but not give a damn to small businesses in trouble? Also, if the government has 85 billion to loan to AIG, why is universal health care "so expensive" in the view of many congessmen?

Deb Cupples (Buck Naked Politics)


You raise some good points.

Charles Hill

Democrats blocked Bush’s Fannie Mae and Freddie Mac Reforms.
''These two entities -Fannie Mae and Freddie Mac - are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the
Financial Services Committee.


Credit default swaps are nothing less than bets on mortgages that the homeowner WILL default on the mortgage. AIG, due to deregulation, was allowed to sell thousands of these CDS Issues for every $100,000 in mortgages to anyone who had access to the CDS shadow market.Without holding onto any reserve funds (like regulated insurance policies) So when a homeowner defaulted on their mortgage, say for $300,000, there were 1000s of CDS issues that had to be paid off to shadow market investors. Instead of congress bailing out AIG so they can pay their CDS debt, congress should of just made good on the underlying mortages thus negating the impact of CDS contract owners demanding payment. One has to ask, why did congress bail out AIG, who stood to gain by CDS's being paid off with taxpayer's money? Could the Money trail lead right back to special interest grops and even congessional members themselves?


Just a few more points. Most, if not all, of Credit Default Swap revenues generated by AIG was doled out as sales commissions to their financial products department heads and other executives at AIG. The money was not reinvested in the company, these were cash cow transactions and unregulated. Executives made millions each from this business, pure greed. The CDS Issue price was very low because AIG had frauduantly rated the underlying mortgages as AAA, even though these mortgages were the worst of the subprime mortgages and extremely risky. But they bundled them to sell them as low risk investments, then came up with the CDS derivitive cash cow that collapsed as the homeowners defaulted. AND WE THE TAXPAYERS HAVE TO PAY? GIVE ME A BREAK! It is the same as if everyone in a neighborhood purchased a fire insurance policy on one home where the idiot son was prone to playing with matches. the house burns down and everyone collects for the value of the home, EACH making a killing because the policy premiums were dirt cheap.

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