Comments on: AIG and the Asteroid….. http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/ A Place for Some Real Answers About Mortgage Loans Wed, 10 Mar 2010 22:56:00 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: GREATNESS « OOZCollections http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/comment-page-1/#comment-210 GREATNESS « OOZCollections Sun, 21 Sep 2008 23:16:52 +0000 http://straighttalkaboutmortgages.com/?p=1553#comment-210 [...] http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/ [...] [...] http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/ [...]

]]> By: shaferfinancial http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/comment-page-1/#comment-211 shaferfinancial Thu, 18 Sep 2008 21:12:42 +0000 http://straighttalkaboutmortgages.com/?p=1553#comment-211 Yes, but I can't believe no one saw this coming 4-6-12 months ago. Either the whole company had their heads in the sands or they simply failed at increasing their capitalization before the downgrade. By the way, the downgrade was only to "A"! Yes, but I can’t believe no one saw this coming 4-6-12 months ago. Either the whole company had their heads in the sands or they simply failed at increasing their capitalization before the downgrade. By the way, the downgrade was only to “A”!

]]> By: Tom Vanderwell http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/comment-page-1/#comment-209 Tom Vanderwell Thu, 18 Sep 2008 03:07:30 +0000 http://straighttalkaboutmortgages.com/?p=1553#comment-209 It seems unlikely to me that a company as large and varied as AIG goes from properly capitalized to bankrupt in one week or one month or even one year Dave, From what I've read, AIG basically got hit with an $85 Billion margin call. They were very leveraged (in certain but not all of their businesses). When the housing and mortgage markets went down, it brought down their ratings (see Sean's Irony post at www.bloodhoundrealty.com/bloodhoundblog for thoughts on THAT) down. That required that they raise their capital ratios. How do you raise capital ratios? Come up with cash, LOTS of cash. That's how you can bring down a company in 48 hours or less (sounds like a book title?) Tom It seems unlikely to me that a company as large and varied as AIG goes from properly capitalized to bankrupt in one week or one month or even one year

Dave,
From what I’ve read, AIG basically got hit with an $85 Billion margin call. They were very leveraged (in certain but not all of their businesses). When the housing and mortgage markets went down, it brought down their ratings (see Sean’s Irony post at http://www.bloodhoundrealty.com/bloodhoundblog for thoughts on THAT) down. That required that they raise their capital ratios. How do you raise capital ratios? Come up with cash, LOTS of cash.

That’s how you can bring down a company in 48 hours or less (sounds like a book title?)

Tom

]]> By: shaferfinancial http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/comment-page-1/#comment-208 shaferfinancial Wed, 17 Sep 2008 16:47:51 +0000 http://straighttalkaboutmortgages.com/?p=1553#comment-208 Yes, I get your thinking, just thought it was ironic that we both have at some level come full circle! Yes, I get your thinking, just thought it was ironic that we both have at some level come full circle!

]]> By: Here is what the news isn’t telling you! « Uncommon Financial Wisdom http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/comment-page-1/#comment-207 Here is what the news isn’t telling you! « Uncommon Financial Wisdom Wed, 17 Sep 2008 14:34:43 +0000 http://straighttalkaboutmortgages.com/?p=1553#comment-207 [...] http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/ [...] [...] http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/ [...]

]]> By: Tom Vanderwell http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/comment-page-1/#comment-206 Tom Vanderwell Wed, 17 Sep 2008 13:31:49 +0000 http://straighttalkaboutmortgages.com/?p=1553#comment-206 David, I'm still a proponent of the moral hazard theory, shall we say, but I'm also a believer in the shall we say, practical? It would be more wrong to have let AIG go under and ruin the entire financial world than it would be wrong to have the government step in, take 80% of the value of the company, kick out senior management (hopefully without golden parachutes) and provide them the funding necessary to do an orderly liquidation rather than a chaotic bankruptcy.... Does that make sense? Tom David,

I’m still a proponent of the moral hazard theory, shall we say, but I’m also a believer in the shall we say, practical? It would be more wrong to have let AIG go under and ruin the entire financial world than it would be wrong to have the government step in, take 80% of the value of the company, kick out senior management (hopefully without golden parachutes) and provide them the funding necessary to do an orderly liquidation rather than a chaotic bankruptcy….

Does that make sense?

Tom

]]> By: shaferfinancial http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/comment-page-1/#comment-205 shaferfinancial Wed, 17 Sep 2008 13:27:20 +0000 http://straighttalkaboutmortgages.com/?p=1553#comment-205 Tom, Funny how you started on with the moral hazard and ended up here? While I started out doubting the moral hazard argument and am now convinced that is exactly what happened at AIG. It seems unlikely to me that a company as large and varied as AIG goes from properly capitalized to bankrupt in one week or one month or even one year. I think the Fed's and this administration simply threw a bone at them and all that talk about bankruptcy today was nothing more than spin! But then again what do I know???? Tom, Funny how you started on with the moral hazard and ended up here? While I started out doubting the moral hazard argument and am now convinced that is exactly what happened at AIG. It seems unlikely to me that a company as large and varied as AIG goes from properly capitalized to bankrupt in one week or one month or even one year. I think the Fed’s and this administration simply threw a bone at them and all that talk about bankruptcy today was nothing more than spin! But then again what do I know????

]]> By: AIG and the Asteroid….. at tvanderwell on SmartHippo.com http://straighttalkaboutmortgages.com/2008/09/16/aig-and-the-asteroid/comment-page-1/#comment-204 AIG and the Asteroid….. at tvanderwell on SmartHippo.com Wed, 17 Sep 2008 08:15:30 +0000 http://straighttalkaboutmortgages.com/?p=1553#comment-204 [...] by Straight Talk about Mortgages and Real Estate syndicated from straighttalkaboutmortgages.com Filed under Uncategorized Tags: market musings, [...] [...] by Straight Talk about Mortgages and Real Estate syndicated from straighttalkaboutmortgages.com Filed under Uncategorized Tags: market musings, [...]

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