Tuesday, March 03, 2009

Tidal wave

From the CNN article, Is AIG facing collapse? The losses explained:
Will AIG collapse?

It's possible. The extra $30 billion AIG will get from the U.S. government is the equivalent of the little boy putting his finger in the dike to stop the water flooding in.

This is incredibly serious as it makes Citigroup's recent losses look insignificant by comparison.

What would happen if it did?

It would quite simply be the biggest financial disaster in history -- completely catastrophic. There hasn't been a single insurance bond trade in the world that has not had AIG's stamp on it either directly or indirectly. The whole insurance market would be trashed.

The U.S. government is desperate to ensure this doesn't happen as it would have a major ripple effect on the global financial system given the extent of its operations. Thousands of businesses and individuals with insurance policies underwritten by AIG would be left exposed.

The resulting domino effect would have obvious social implications with the unemployment rate in the U.S. for example predicted to hit 10 percent by the end of the decade.

I'm seriously scared. Apparently, AIG's collapse will eclipse that of Lehman Brothers's, and that had already caused a catastrophic chain of events.

May we not feel the ripple.

3 * :

heldensoubrette said...

My mom works for AIG. I am not scared of its collapse.

Back when I had a day job in a high class hotel restaurant in San Francisco, I overheard a gentleman saying, "Listen to this guy. He's gonna teach you how to make money on medical insurance,". I wanted to throw up right there and have them clean it with their bare hands! I want them to get a glimpse of how filthy and greedy they are! Making money on MEDICAL INSURANCE?! Gimme a f*cking break!

It is true what they say. What comes around goes around.

Blue Arden said...

it's frustrating how EVERYONE is paying for this while those in wall street even managed to command high-paying salaries and bonuses end-2008. it sure is getting around but not to those who have a direct hand in this.

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