AIG loses $61.7B; Treasury, Fed step in with $30B aid package as reported by USA Today.
My take on this is that AIG is broke. When do we openly recognize this fact? Are they too big to let fail? That seems to be the philosophy that we operate under. So, after giving them over $140 billion we are going to give them even more. Is this not throwing more good money after bad? Is this sound business practice for our government - we the people - should be following?
More questions then answers. Call this nationalizing, call it socialism, call it whatever you want this economic business practice of "too big to fail" just plain does not work. What is "too big to fail" is the American people, the small business in America - who as a whole is bigger then any one of these corporate behemoths. Bigger is not better. We have learned that lesson so many times over just my lifetime so why not let these big companies shrink. As the Chairman of AIG just said on MSNBC - the insurance portion of thier company is solid. The insurnace policy holders are safe and secure. This being the case then it seems to me that this part of their business should survive and the part that is losing and we are funding should be let to die.
We need to reexamine how to use over $170 billion for the betterment of the people who are losing their jobs and homes. The people who are going hungry unable to buy food or unable to find shelter. We are talking about millions of Americans not a handful of over paid, incompetent executives.
If it is my money they are giving up then I say DON"T GIVE IT TO THEM. Give it to the people - that is how America will survive.
Mortgage Delinquencies Jump 50 Percent as reported in MoneyNews.com.
As mortgage delinquencies rise so does the rate of actual foreclosoure. More displaced American. A continuation of the downward spiral of our economy - a deepening of this crisis. Is this a recession or a depression? Does unemployment have to reach the 20's before it is called a Depression? Remember we have almost three times the population now that we had then. The unemployment rate should be looked at in terms of actual numbers (people) not percentage if we are going to compare it to the 1930's. The next $30 billion going to AIG would be better spent helping the jobless and homeless. That much money would surely feed and shelter tens of thousands of American people.
Buffett: Economy will remain in 'shambles'
Annual letter to shareholders says crisis has led to 'paralyzing fear' As reported by MSNBC.com
"Billionaire investor Warren Buffett predicted Saturday that "the nation's economy will be in shambles throughout 2009" and probably "well beyond."
"Profit fell 96 percent, the fifth straight quarterly decline, and Berkshire's net worth tumbled $10.9 billion in the year's final three months.""Net worth per share fell 9.6 percent for the whole of 2008, only the second decline since Buffett began running Berkshire in 1965. It fell 6.2 percent in 2001."
Now, I have a great deal of respect for Mr. Buffet as do many people around the world. He is an astute investor, savy businessman and always seems to have his head on his shoulders squarley. He is not infallable as he so readily points out but still his outlook on matters is well worth considering. He has advised President Obams - I just wonder if he listened or is listening.
I am not a billionaire or even a millionaire - probably not even a thousandair - but I do understand business and economics. To break it down to very simplistic terms - budgeting and spending works no different on a large government scale then it does on our onw household budgeting and spending. If you are out of money you just can't spend anymore. If you are broke there is no one to rescue you. If you have made bad investment decisions, you lose. If you are too deep in credit, more credit will not help you get out of debt.
Warrne Buffet is correct. Times are bad, will continue to be bad throughout 2009 and beyond. A Recession or truly the Second Great Depresson? We have to face the truth - the reality of the situtation in order to plan our survival accordingly. Feel good propagandist reports and information serves only to harm us more.
The Stock Market is Still Crashing.
As I write this I am monitoring the DOW. It is now at 6830. As MoneyNews.com reports this is the first time it has been this low since October, 1997. You can view the related story Dow Falls Below 7,000, Lowest in 11 Years.
This is a decline of over 55% since we began this economic crisis. Does this not fall under the catagory of a stock market crash? Was not the stock market crash a major contributor to the Great Depression?
As I said above, I am not an economist, a politician, a large corporate CEO, an accomplished author, radio or television personality or recognized in anyway which gives one "pundit" authority. I am just like you, an average American. I have been for most of my life a small business entrepreneur who has worked hard to provide for my family and who now finds it difficult to do. I am living in a depression as are many of my friends, neighbors, colleagues and acquaintences.
I am a "realist" not an optimist or pessimist. Now is the time for realism and realism means knowing the truth to prepare for the times. Survival is our mode. Our government must concern itself with our survival not the survival or limited survival of companies such as AIG.
Let them fail but do not let the American people fail in this - The Second Great Depression.
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