Market Failure

[Trelly]

I read on Monday that AIG attempted to loan money to themselves to create some liquidity. Despite the fact that they are now bailed out the @ss by  the government, how would they have gone about this self loan?

When 150 and 89 year old institutions (Lehman and AIG respectively) stretch themselves too thin and risk too much without proper hedging, would we have market failure without government bailout? Do guaranteed governmental bailouts (to avoid market failure) promote and exacerbate risky behaviors by these companies? Recessions are a natural part of the business cycle, but is market failure sometimes a necessary evil for destructive creationism? Naturally, the weak companies fail (free entry and exit), and the strong companies should rise to the top until they too become archaic. 

[Greg]

Even though they were still going down the tube, they still had Assets...AIG would have borrowed on the ASSETS but in the long term it would have doubled their debt...Like robbing peter to pay Paul...so to speak..

LEH had assets and sold the Bank section off for 1.75Bil...AIG could have done the same, but AIG's international exposure is far greater that LEH...IMO.  This would have been hard to cover...

Anyway, after today's bleeding and  the panic is over, I think we may have a stong signal of reaching bottom in the American Market...If it's confirmed, there are going to be some good buys out there..

Also, don't forget about the SEC stepping in to reinforce it's short trading rule starting tonight at Midnight ET USA...This will help if they have some teeth in it...

[Trelly]

Anyway, after today's bleeding and  the panic is over, I think we may have a stong signal of reaching bottom in the American Market...If it's confirmed, there are going to be some good buys out there..

Also, don't forget about the SEC stepping in to reinforce it's short trading rule starting tonight at Midnight ET USA...This will help if they have some teeth in it...

Alright Greg, now here is my worry: The U.S. dollar has recently appreciated against virtually every currency. Fundamentally, it shouldn't. I live in Canada but trade in US dollars, am I going to get screwed on my exchange rate in the near future? I was thinking about converting the majority of my cash while it's high and take my 8% gain on the currency conversion rather than risk a larger loss in the future (and just trade on the TSX for a little bit). I fear the dollar is being artificially propped up right now and could head for a dive....

[johndoe]

no matter how bad the market is, some douche is making lots of money.


i would like to be that douche

[vanguard223]

Do you have to specifically be THAT douche?

How about just A douche?