Fed rescues AIG

it's more of a takeover than a rescue as the U.S. government will effectively get a 79.9% equity stake in the form of warrants called equity participation notes.
As the Wall Street Journal reports, "It puts the government in control of a private insurer -- a historic development, particularly considering that AIG isn't directly regulated by the federal government."

but i believe it's a good thing, at least for now, since it stabilizes the situation a bit. the alternative, which is bankruptcy (at it really was imminent less than 24 hours ago) would have had significant impact on global financial markets. quite a few people call such a scenario "catastrophic", had it happened. i also think the Fed's move is the better of two choices -- the other one being to cut the Fed rate and just leave AIG on the mercy of market forces.

I believed it is a smart move by federal goverment. US financial market is in a very delicate position. Disorderly failure of AIG would definitely hurt US economy and it will affect us too since there are some components of US economy that we depend on, like export. Slowdown on US consumer spending will hurt exporting countries like Philippines.

so whats next? all companies in S&P 500 will be under fed? how long will 85 BIllion last? there are so many bad assets in AIG's books.....

too BIG too fail is BS.....

"Going Big" so your ass will be saved when your about to collapse may be taken positively by the employees and those that will benefit directly from it but really a company should be more socially responsible. What happens if no one will be there save your ass? The ramifications to the economy are devastating.

hi salve can you enlighten us more on what causes these "wall street convulsions"?

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

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/

thanks reyna elena for the info.

hope that b doesnt bring back card check, that would be a soft tyranny

reports report rise non reduction