Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Fed takes over AIG

dealbook.blogs.nytimes.com

Post reply on HN
Print view View original

141–150 of 194 posts

Re: Fed takes over AIG

#141

Post by nuclear_eclipse »

netcan wrote: post #127
bart111 wrote: post #91

Earlier quoted context omitted.

true. Through printing press though. This is additional 85bln usd in circulation. We will all pay at the gas pump and groceries. Socialism for the rich. Communistic China would not do that. It is sad to see the USA becoming parody of this what it used to represent.

Why is this for the rich ? I've seen that remark thrown around several times & I don't understand it. From what I understand, this sort of a move is basically done by inflating the dollar causing anyone who has savings to lose out (the people without savings only lose if their wages don't catch up).

Because only the rich, the people who own/control these mega-corps, are the only ones receiving gigantic funding "bailouts" from the government, meaning they don't face the fallout of their stupid mistakes. It's basically a free ticket to steal money from the American public, but only if you can afford to set up a mega-corp and let it fail while you "earn" multi-million dollar salaries every year regardless of performance...

Re: Fed takes over AIG

#142

Post by yummyfajitas »

wheels wrote: post #104
jrmurad wrote: post #43

Earlier quoted context omitted.

I'm not saying you're wrong that socialism is better than this mess but I will say that capitalism is better than this mess and better than socialism too. Having health insurance provided by the State (i.e. you through your tax dollars after several layers of corruption and bureaucratic waste) does not guarantee quality of care. A competitive free market is more likely to develop better medicine.

I'm not going to get into this debate here, I'd suggest checking out some info and then seeing if it fits with your assumptions. Page 200 here ranks worth health systems: http://www.who.int/whr/2000/en/whr00_en.pdf

I don't think that table means what you think it means.

Table 10 on page 200 measures "attainment", which is something along the lines of (actual health improvements due to health care) / (best possible health improvements given spending level). That's a very different quantity than quality of care, which is what the original poster was talking about.

(It's actually more complicated, education levels are somehow worked in and details are described elsewhere.)

Rankings and indices are great, but it helps to know what you are actually ranking.

Re: Fed takes over AIG

#143

Post by netcan »

nuclear_eclipse wrote: post #141
netcan wrote: post #127

Earlier quoted context omitted.

Why is this for the rich ? I've seen that remark thrown around several times & I don't understand it. From what I understand, this sort of a move is basically done by inflating the dollar causing anyone who has savings to lose out (the people without savings only lose if their wages don't catch up).

Because only the rich, the people who own/control these mega-corps, are the only ones receiving gigantic funding "bailouts" from the government, meaning they don't face the fallout of their stupid mistakes. It's basically a free ticket to steal money from the American public, but only if you can afford to set up a mega-corp and let it fail while you "earn" multi-million dollar salaries every year regardless of perfor…

Are the people who own mega-corps richer then those that own regular corps? Generally speaking, stock is not owned exclusively by the super rich. The lower end of the spectrum (those that also have no savings) do not own stock. Anyway, haven't they lost most of their money already?

On top of that this isn't for the shareholders. It's to keep a financial system from collapsing. You can argue that it wouldn't have collapsed. That this makes it more likely to collapse etc. Sure.

Re: Fed takes over AIG

#144

Post by bayleo »

kqr2 wrote: post #16
krschultz wrote: post #6

So if big companies can't fail what prevents them from taking a risk that ends up this way in the future? Small companies have the advantage of being able to risk it all, big companies have the advantage of large sums of capital. To upset that balance is to increase the barrier of entry for small players.

Yes, all these bailouts create what is known as a "moral hazard" http://en.wikipedia.org/wiki/Moral_hazard

The attitude with which these companies have been conducting business would seem to indicate that this is hardly the first time we've created moral hazard.

Re: Fed takes over AIG

#145

Post by yummyfajitas »

netcan wrote: post #135
jfoutz wrote: post #47

Earlier quoted context omitted.

I'm first to agree efficient markets are fantastic at allocating resources effectively. I'm curios though, how do you guarantee people who are sick/hurt/dying behave as rational actors? I might be mis-remembering but i thought rational actors were a requirement, otherwise they would be to quick to give away money.

Rational actors are more of an assumption then a requirement. Used in conjunction with carefully defining terms, this a powerful way that economists hermetically seal their theories. rational = utility maximising utility defined by consumer choice Basically, they pay anything because it's worth anything.

All this really means is that preferences are transitive. I.e., if I prefer a puppy to a wii, and prefer a wii to cabbage, then I prefer a puppy to cabbage. That's not an unreasonable assumption.

It's an easy topology exercise to prove that if preferences are transitive, then a utility function exists (I think you may also need to assume a countable number of goods/services).

Re: Fed takes over AIG

#146

Post by ok1111 »

sethg wrote: post #130
ckinnan wrote: post #10

I want a bridge loan for my startup. Instead, I get to pay taxes to pay for this nonsense.

I am happy to report that one element of Obama's tax plan ( http://www.barackobama.com/pdf/taxes/Factsheet_Tax_Plan_FINA... ) is to "eliminate capital-gains taxes for entrepreneurs and investors in small business".

So if he's elected, and that's not what happens, will I be able to hold him accountable to this internet PDF?

Re: Fed takes over AIG

#147

Post by kingkongrevenge »

Angostura wrote: post #137
ckinnan wrote: post #10

I want a bridge loan for my startup. Instead, I get to pay taxes to pay for this nonsense.

If AIG went down, do you in some way think you would find it easier to get a loan. On the contrary, I think it would be unlikely that anyone would be lending anyone anything.

I have been building savings since I was 15. I have a fair amount of money in the bank for someone my age. I WANT it hard to get a loan. I want all these other people with no savings cut out of the market for housing, for business opportunities, for education. That would leave me first in line.

Propping up the credit market is, yet again, screwing savers like me in favor of the spendthrifts.

Re: Fed takes over AIG

#148

Post by kingkongrevenge »

bsaunder wrote: post #139
Angostura wrote: post #137

Earlier quoted context omitted.

If AIG went down, do you in some way think you would find it easier to get a loan. On the contrary, I think it would be unlikely that anyone would be lending anyone anything.

I'd prefer to see the government take even half the amount of money and offer lots of smaller grants/loans to innovative entrepreneurs to launch our country into the next wave of growth. That's where the new jobs and economic growth will be. Give it to people creating value.

Do you have any idea how many such programs already exist? They all end up funding catfish farming research programs in Robert Byrd's territory. You seem a bit naive of the real function of cheap/free government money.

Re: Fed takes over AIG

#150

Post by icey »

furiouslol wrote: post #123
yamil wrote: post #5

Welcome to socialist states of America

AIG is getting badly punished for this. They are getting the loan at LIBOR + 8.5%. That's downright punitive. LIBOR + 8.5% is not a rate at which a company with AIG's business model could survive at. AIG lends to people at around LIBOR + 4% for mortgages or LIBOR + a lower % to insure BBB to AA rated borrowers. They'll probably have to sell off their assets in a hurry at below fair value. The longer they wait, the mo…

Well, thanks to you I just learned something. I had no idea the US government used the London index to figure out rates for loans. I actually went and looked it up; and you're totally correct.

Amazing.

Post reply on HN