Now it’s no longer just a rumor. The US Fed is bailing out American International Group with an $85-billion package (you read that right). Apparently, AIG is indeed too big to fail.
I tried to camp out of Philamlife chief Joey L. Cuisia’s office this morning (well, I really meant sit really demurely in the lobby) just in case he has time to talk to a lowly journalist. Understandably, however, he was up to his ears with teleconferences and board meetings with this new development, but I’m on call the whole day.
Some thoughts that come to mind: Wall Street’s latest convulsions show there might be more casualties out there and all that’s part of the restructuring happening in financial markets. I’ve heard the phrase “the market corrects itself” too many times that it hardly means anything anymore. Now, I think the great white economists might not be speaking in tongues, after all.
Second, does AIG’s case reinforce the principle to “go big” when you’re choosing financial products to buy? Certainly, in this case its size saved it, but I’m not yet sure what that means on the regulatory side. The debate is heating up in Wall Street on whether this is the dumbest or the smartest move made by the Fed.
What do you think?
March 25th, 2009 at 3:36 am
hope that b doesnt bring back card check, that would be a soft tyranny
September 19th, 2008 at 9:51 am
thanks reyna elena for the info.
September 18th, 2008 at 6:40 am
Pepe,
Here’s my shot at your question:
Stock trading for the most part is really all about speculations. Every actors and participants in this grand exercise are watchful about the company’s financials - quarterly and YE release, forecast, budgets, news if any of any SEC or FBI probes or investigations and more importantly ratings - to be exact, if there is any ratings downgrade. Whenever there is a ratings downgrade, expect Wall Street to have some mild to wild sell-off for the simple reason that you don’t want to hold on to these investments that are worthless and will be worthless so that you could preempt your losses.
I wrote an easy to understand Subprime101 and how the US housing market works to better understand what happened at Wall Street the other day. I hope this helps. Here’s the link:
http://reynaelena.com/2008/09/17/understanding-subprime-and-the-us-housing-market/
September 18th, 2008 at 12:57 am
one of the nice moves by the feds so far…… it averted a global meltdown of economy….. really, a lost of confidence that will cause the run
September 17th, 2008 at 6:12 pm
hi salve can you enlighten us more on what causes these “wall street convulsions”?