Quote:
Originally Posted by shakran
This would seem to be a very good argument not to allow megagiants like AIG to exist. The "all your eggs in one basket" scenario.
Additionally, if it's so very vital to our economy that AIG survive, why were they just handed money without any requirements as to how they spend it. Personally I think it's more important to keep a company afloat than to pay a boatload of executives millions of dollars each in bonuses, but apparently Vital Financial Backbone AIG doesn't see it that way.
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I would agree with that. In fact, I think this crisis points to the need of stricter regulations on the derivatives market, instead of the outlook that risks will take care of themselves by creating even more derivatives.
The problem is that right now is not exactly the time to let a company like that fail. I would be too hard a landing.
I disagree with how the Obama team is handling it. I think a short term nationalization is actually in the tax payer's best interest, as we would not simply be spending the money, but actually buying equity. Unfortunately, that is not how things are going.
But letting it fail is not an option, in my opinion. Specially since the taxpayer would end up picking up the tab anyways, through the FDIC.