basically, what dippin said is a good response to you, ace.
i don't think you understand what's going on. if you remember--and i expect you don't---the bush people's move relative to a.i.g. was forced on it because of the magnitude of the asset pool it insured, the fact that national governments stood to loose enormous amounts if it went under--a.i.g. was a danger to the financial system as a system. talking about allowing institutions to fail as if they're in any meaningful way a collection of buildings separated from other collections of buildings and not nodes within very complex, very high=speed capital flows is absurd.

the obama administration probably should have already nationalized a significant portion of the banking sector, including aig. i think paul krugman's been consistently on this topic and has been consistently correct about it. part of the explanation for these half-assed half-way gestures appears to be political--obama seems to think it important to keep the republicans on the same basic page, when the situation militates for leaving them in the ash-heap of the past, where their economic ideology is already burning.

i don't think you understand what the situation is, ace, and i think that you've also drunk the koolaid (an expression i detest, but there's no better on this point that is anywhere near as polite) concerning what regulation is, what it can do and cannot do. regulation is a means to an end. what's required to use it effectively is a set of political goals. what obama's been stuck doing is trying to control the many many fires that the lunacy of free marketeer ideology have left burning. you advocate that ideology still, ace, so i don't see what you have to say that's of any interest. your way of thinking is what enabled this mess, what set it on fire, what paralyzed attempts to deal with it, and is what stays in the way of a coherent approach to this transformation in capitalist ideology that's under way.

and i dont recognize your attempts to shape what is and is not a correct way to approach afghanistan as a question.

So then Iraq was a mission, not a war. What mission then? WMD? Opps fuckin none there, got caught with your cock hanging out there shrub. Killing Saddam? Nice secondary mission after everyone found out your guys were full of shit about WMD. Then what was the mission? Killing Zarqawi? Opps still didn't stop the insurgency. Fuckin semantics, oh it's a mission not a war, yes ace and Korea was a police action, and Nam was a conflict.
Even got a video

Psssst ace, even your buddy dubya said he was wrong to say that in front of the banner, it's alright, you don't need to aegue semantics. Mission, war whatever the fuck you want to call it, it was far from over when shrub made that 'great speech'. Here I'll even show you he regretted it, just so you don't feel bad that the mission was never actually accomplished.
Ohhh poor ace, even your president knows the mission/war wasn't accomplished in weeks, letalone years, why don't you see it?

Of course he could close it if he wanted to, he could go jerk off on the Lincoln Memorial if he wanted to as well, but deciding the fate of the people still detained there takes a wee bit more than 3 weeks. Of course he probably studied the issues before taking office, which is more than I can say for dubya and some of his adventures. How is he buying time? He's only getting close to being in office for 2 months, and in case you didn't notice I'll let you in on a secret.......the economy is kind of fucked right now, and it's probably taking precedence over Gitmo as he's already stated it'll be closed in a year, seriously do you not read newspapers? I'm not trying to be an asshole here but jesus, it's pretty common knowledge things take a while to kick in.

Really, Afghanistan isn't Iraq? And here I was thinking they were the same country, thanks for pointing that out. Impressive ace, you actually learned from history, now if only dubya could have done the same. More troops isn't a waste, at least Obama's putting in an effort to deal with Afghanistan, shrub was interested in it for a bit, then he got a hard on for Iraq and he couldn't find Afghanistan on the map after that, so he lost it.

Obama's plan to charge veterans for some of their post-combat medical care is not something I support. Nor is his plan to tax health benefits

Those of us who buy our own health insurance are not allowed to deduct the cost from our income so why shouldn't those with employer furnished benefits be treated the same? Also those of us who buy our own must pay more for the same coverage. I think all health insurance premiums should be deductible but that is not the way it is now.

Says who??? Credit markets were already frozen, that is one of the reasons AIG needed a bailout. Why would they give equity control of their company if they could have gotten "credit"? I will tell you - they couldn't. And---shareholder value was at or below zero - the people being protected were the people in management and the other firms that played along side AIG. If AIG went bankrupt the insurance companies would have been spun off or acquired by other companies because those entities had value.

Says who??? Was it Paulson? Do you know he was an investment banker at Goldman before going into government? I am not into conspiracy theories, but Goldman certainly got paid after AIG got bailed out. But most likely, a guy who is an investment banker, sees the world through investment banker eyes, and naturally "his world" was in chaos and in need of a bailout - that don't mean it was the right thing to do.

And, why can't we have government officials to take some time and study an issue before committing billions? Why didn't they know about the bonuses on day one? Why didn't they make rescinding the bonus agreements as a condition of getting the money on day one? They did that for the top auto execs.

Most of the folks in Washington are simply in over their heads, and guys like Paulson may have had an agenda. We needed people to probe, study the issue, ask questions and do all the things we were told they did. Just admit that Obama's rhetoric during his campaign and as a Senator about controls and conditions was bullshit. why is that o.k. with you?

From what I've read your statement is very misleading. Obama is not wanting to charge veterans. He wants to charge their insurers. In fact they have specifically said the veterans themselves will not pay at all. I'm not defending this plan as I haven't looked into it enough but a little truth once in a while would be nice.

Earmarks are McCain's pet issue. His campaign to a large degree centered on that issue. Obama wanted in on the issue and made some bullshit comments and promises regarding earmarks. Most Republicans were not behind McCain on the earmarks issue. And, now the point is about Obama's empty campaign rhetoric more than it is about earmarks.

this, ace, isridiculous.
the reason it's ridiculous is that in order to make this silly analysis happen, you have to pretend that aig is just another insurance firm.
so we're back in that tiny, blinkered world of econ 101 modelling applied in a diletante manner to real-world situations--conservative economic theory in other words.
you can't get to the premise of an actual conversation about aig, but you talk anyway.

same problem obtains for your pseudo-analysis of the aig bailout.
and a big reason that people like paulsen were in over their heads is because they're conservatives appointed by a conservative administration BECAUSE they do not and seemingly can not think in other than neoliberal terms.
so when neoliberalism crumbled OF COURSE they're in over their heads.

How were national governments going to loose enormous amounts of money? If the issue was an issue of liquidity (or timing) no one was going to loose anything they may have simply needed to wait. And wasn't the original point of the money given to AIG for AIG to pay it back. If they can pay the Treasury they would have been able to pay other creditors. So, come back with something that makes sense rather than the superficial b.s. being sold to the public.

Gietner is having problems filling his staff, can't draft a detailed banking plan, can't even do his own taxes coreectly, and you want him in charge of a significant portion of the banking sector. O.k., is that it?:confused:

---------- Post added at 03:56 PM ---------- Previous post was at 03:51 PM ----------

The Iraq war included several different phases. The first phase included invading the country and neutralizing Saddam's military. The occupation phase of the war proved to be the most difficult. But all these phases are under the "umbrella" of the war. Before you can go into a rebuilding phase you have to succeed in the phases that precede it.

---------- Post added at 04:02 PM ---------- Previous post was at 03:56 PM ----------

I don't remember who said it but AIG was an insurance firm acting like a hedge fund. And other than the superficial "because I said so" logic no one has spelled out why AIG was too big for bankruptcy.

If probing into that is ridiculous, I am guilty. I need someone to explain why AIG was too big for bankruptcy. Seems to me, that people like you actually could have used a few people like me in Washington before committing billions into a failed corporation.

yeah, I just came back to update that. He wants to move the veterans' primary insurers to their private companies, with the government picking up the rest (while it's currently the other way around).

still, seems like something that doesn't need to be messed with, especially since the critics can spin it into a very anti-veteran move on the infotainment channels

In order for any of this "dented halo" attack to work, Obama has to have been viewed as perfect and infallible. This "See? He's letting down your idealized image of him!" thing only holds water if there WAS an idealized image of him.

Problem is, the only place that image EVER existed was in the minds of the right-wingers, accusing Obama supporters of feeling that way. So now they're pointing one fiction at another fiction, and they think they're scoring points.

Fortunately, the rest of the world got sick of fictions when it was the White House peddling them, and isn't buying...

ace--the case for aig being "too big to fail" came in part from the fact that its activities were intertwined with investements held by european and asian governments---this point was made from the outset---typically, when people not blinded by conservative economic mythologies rehearse the sequence of steps of the devolution of the neoliberal order, they point to aig as the point at which it became clear, even to the blind, that this was a crisis of the global financial system and not of the american financial system--which you might have been able to pretend was the case through the bear-stearns and lehmann phase of things. and in fact, your brilliant idea about letting firms fail was tried out on those first two, remember? what it produced was an acceleration into a more generalized crisis. so it wasn't a functional idea.

the problem here really, ace, is that you're not looking into anything. you do no research, you bring no data to speak of--what you're interested in doing is maintaining a sense of coherence for your own economic a priori at the expense of data about the world---when you're challenged on it, you compound the disengenousness of the way you handle information with disengenuousness about what you're doing and why.

Do you know who is insured by AIG? What they insure against?

They underwrite insurance, do "corporate insurance," and actually insure financial instruments used by other banks and funds. If they go broke, not only will everyone who's invested in AIG lose money, but insurance companies, banks and funds will go under as well. If they go under, not only will the "zombie" banks lose money, but also many other healthy banks.

That would make the current situation seem like nothing.

If I assumed what you wrote was true (about $20 billion of the $175 billion bailout money went to European banks), why would I, as a taxpayer, care about the risk for profit deals between AIG and Europeon and Asian governments?

However, your premise is false. AIG bet big in the area of credit default swaps and they started having problems in 2005. After Greenberg was forced out by NY AG, Sptizer, AIG lost its AAA rating. During this process there was political pressures to adjust and restate earnings, which further added to the growing lack of confidence in the company. This lead to the need to post more collateral in a environment where their bets on real estate assets was declining. The spiral started and then began to accelerate. The management team, instead of managing the new environment bet bigger on real estate causing the collapse of the company. They bet big. They bet wrong. They bet bigger. And they were still wrong. The only people at risk, were those who went along for the ride. If AIG's bets had paid off this would not be an issue and you can bet they would have done everything possible to minimize the taxes due on the profits.

So, you can believe that they had to be bailed-out and buy into the superficial garbage being fed to the public, I don't. If you want to describe me as ridiculous, blind, etc., for my view feel free - but that won't change reality.

---------- Post added at 05:56 PM ---------- Previous post was at 05:49 PM ----------

AIG has many subsidiary companies. The insurance companies are regulated by state agencies. Insurance company regulation is pretty tightly controlled with clearly defined reserve requirements and each state has insurance guarantee programs to protect insureds from failed insurance companies. AIG is in virtually every line of insurance. The insurance companies are healthy, and have value. The "investment banking" portion of the company is the problem.

Here is a link to their latest 10K filing with the SEC: http://www.sec.gov/Archives/edgar/da...74794e10vk.htm

It's far more than the 'investment banking" part. They offered corporate insurance against defaults and so on, and the only reason some banks and financial institutions have been able to stay afloat has been because of AIG's continue existence.

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.

that you wouldn't be concerned about endangering other national governments by allowing aig to fail because of their role in backing mortgage securities is a good bit of evidence for the proposition that it's a good thing you're far from power, ace.
you could say "well you governments went into that market at your peril, so fuck you" but the political consequences of that would have far outweighed any fleeting sense of vindication that you could have derived from the action.

i have a pretty good idea of how aig got into trouble, ace. the problem is that you have only the segment of the story repeated above that enables your interpretation to operate.
you leave out the parts that triggered the bush people to act.
since that's what is at play here, it hardly makes sense for you to claim some superior insight when you can't even keep your data organized so it speaks to the question you're responding to.


and it was the bush administration that acted.
remember?
your boys in the bush administration pulled the trigger.

========
edit:

you'd think that anti-trust would still matter, wouldn't you?
not in republican land, apparently.
concentration is proof of their social-darwinist ideological worldview.
until it screws up, in which case other criteria arbitrarily enter the evaluation process.

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.

As I understand it Credit Default Swaps started out as a reasonable way for lenders to insure their loans but by the end they morphed into something like casino gambling.

http://www.ft.com/cms/s/0/0d55351a-0...077b07658.html

have a look at this from the future of capitalism series in the financial times.
it explains quite a bit about the rise of derivatives, what they were, how they were possible, what they meant.

the article "looting" from 1993, which i referenced in the thread in economic (based on an ny times summary that appeared last week) is more detailed in it;s analysis, but shows very similar types of thinking, bureaucratic rationalization and consequences coming out of the savings & loan farce of the late 1980s...

i had posted something earlier about ace's revisionist pseudo-history of aig and the bush administration's actions with respect to it--but i'm bored by that. so this instead.

So what phase was over 3 weeks into the campaign then? Was it the we just fucked up your country, now we're clueless about what else to do phase? Maybe it was the operation clusterfuck' phase, either way nothing was accomplished 3 weeks in.

Seems comical though you just can't admit that nothing was accomplished after just 3 weeks, and shrub fucked up with that banner, hell even dubya admitted that. Must be tough though to be trying to make your point by just arguing semantics, tomato, tomatoe, mission, war, conflict, it's all the same, the mission nor the was was accomplished by that time 3 weeks in.

The mission could not have been accomplished because the mission was not defined, and the only mentioned part of the mission at the outset (go get the WMD's) was impossible to accomplish because the WMD's weren't there, and they knew it.

However, this thread is about Obama. Bush was a horrid president, and probably will go down as the worst in history, but his idiotic butt is finally out of the oval office. We can't change what he did. We can only look at how Obama is trying to fix the mess he made.

I'll also note: the stock market has been rallying for five days straight. By the logic employed in this thread early last week, this means Obama is doing a GREAT GREAT GREAT job.

No mission? WTF do you mean "No Mission." Mr. Bush laid out the mission clearly Aug 5th 2004 when he said-

Given the giant shit sandwich he handed the Obama Adimn. and the rest of the nation I'd say he succeeded with his mission.

A bear market rally means there are a few big firms that are trying to drive up the market just enough to make a token profit. Don't get excited until there's at least 4 weeks of consistent positive movement.

sooner or later you'd think that the nightly televisual infotainment would stop treating the stock market as if its activities reflected the general state of the economy. that started under nixon--around 1972---which is strange because it was about the same time that the series of moves were being implemented that severed the movements of capital from that of the real economy--the ideological component came in the early 1980s--it wasn't inevitable--but by that point, the separation was pretty radical.

it are deep dysfunctions that have to be addressed--people keep acting as though this transition or crisis is a blip in the normal run of things--but they're wrong. in saner parts of the world, there's a pretty broad recognition of the fact that the collapse of the neoliberal order has opened onto a need for very basic changes, basic reorientations not only in what folk do and how they do about it but also in the ways they think about them and their relation to the broader systems they're part of and relations between or amongst systems. there is no option but to deal with these basic issues.

it's strange reading the intellectual paralysis that seems to be abroad in this microcosm, which repeats in a way some of the intellectual paralysis that's out there in 3-d america. i think it's a function of living in an authoritarian ideological context. that is not changing. if anything prevents a collective change of direction, it'll be that the ideological relay system is now entirely out of phase with what is required. there's nothing inevitable about a positive outcome to any of this....

I think he was being facetious.

Market movements mean NOTHING regarding the performance of the administration unless they're downward movements observed by a right-wing observer. That's kind of my point.

I know the mission was never defined, and you know the mission was never defined, hell even shrub regrets that sign, I'm just trying to see if ace will drop arguing semantics and admit nothing was accomplished 3 weeks into the campaign when shrub made that speech. First the mission was WMD, they found nothing, then it got changed mid mission to finding Saddam, once they got him and realized the insurgency wouldn't stop, then the mission was well, I think they got confused at that point, and juts gave up on actually having a mission.

Actually about the best way to define the mission was when shrub said ‘Remember, this man tried to kill my dad’, that's what it was all about shrubs revenge......hell good name for a comic book.

I know this thread is about Obama, but ace brought up the Iraq war winding down in its own time, just wanted to show him the last person to say that was so wrong.

there are many reasons the bush people won't quite go away...partly they condition so much about what the obama administration is up against (both directly and as a kind of fucked up culmination of longer-term processes) that to invoke the latter is also to invoke the former---and partly because the bush people are a gift that keeps on giving on other, even more foul grounds. read the following--it's not pleasant, but it's better to know:

US Torture: Voices from the Black Sites - The New York Review of Books

A credit default swap is insurance but is not insurance by most regulatory definitions for insurance. That was the problem these so called "insurance" products did not fall under normal insurance product or banking regulatory control.

---------- Post added at 03:04 PM ---------- Previous post was at 02:59 PM ----------

"endangering" other national governments?!? You make a claim with no substance. And if I assumed there was some merit to the point, why wouldn't the citizens of those governments step up and protect their own national government?


The Bush people, Paulson, was not concerned about the bonuses. The Obama people are. The Bush people were concerned about the big dollars. It seems the Obama people are concerned about the trivial dollars.

---------- Post added at 03:07 PM ---------- Previous post was at 03:04 PM ----------

Yes.

---------- Post added at 03:11 PM ---------- Previous post was at 03:07 PM ----------

Just because they did not define it to you, does not mean they did not define it.

WMD was a pretext for the war. I thought we all knew this by now. We were certainly concerned about WMD but that was not the number one reason to invade Iraq. The point was to remove Saddam and to establish a democratic government friendly to our needs and stability in the region.

---------- Post added at 03:14 PM ---------- Previous post was at 03:11 PM ----------

I am predicting the recession will be declared over in the third quarter of 2009. Long before Obama's "stimulus" will have had any impact. I think we will see a second recession before the end of his first term because of the "stimulus".

---------- Post added at 03:19 PM ---------- Previous post was at 03:14 PM ----------

How about the fact that the administration has stoped pissing all over the market with negativity? Seems like they have changed their tone.

USNews.com: Political Bulletin: Monday, March 16, 2009

Funny, but I was ridiculed to no end when I suggested that the economy was fundamentally sound. I guess a lot has changed in the past few months.

ace, your memory is faulty. either that or you're resorting to simply making stuff up. there was extensive international pressure for the united states to act to salvage aig. at this point, i am so tired to going through your misrepresentations and flights into fantasy that i'm not wasting my time researching this. it happened, and for the reasons i noted. there is no debate about it.

On an Air Force Carrier pilots often consider the most dangerous portion of a mission landing on the carrier. That takes a great deal of skill and every flight puts their life at risk.

Before ground troops went into Iraq, the Air Force had the responsibility to make strategic military strikes to disrupt communications, Iraq command and control, and Iraq's ability to wage war. They did that without loss of life or the loss of aircraft. These men performed exceptionally well as did their support teams. These men made the ground invasion 100% easier. These men earned recognition from their Commander in Chief, the President. These men deserve the recognition of the American people. These men deserve the recognition of freedom loving Iraqi people and freedom loving people all over the world. They did their job, they did it well. "Mission Accomplished"!:thumbsup:

---------- Post added at 03:37 PM ---------- Previous post was at 03:32 PM ----------

I never said there wasn't. I am saying I did not care about that pressure. I am saying I would have let AIG fail. I am saying no one has ever given a reasonable explanation of why AIG needed to be bailed out rather than going into bankruptcy. The "just because" argument doesn't work for me.

I don't care if you are tired. You have given no serious reasons why AIG needed to be bailed out. Put your head back into the sand and get some rest.

I must have missed a memo, aren't carriers host to Navy pilots, not Air Force?

against my better judgment. if you look at the list of the latest institutions which got payouts from aig, it'll become obvious where the pressure came from any why:

http://www.marketwatch.com/news/story/aig-details-105-billion-payouts/story.aspx?guid={74DD6FC0-D2D8-4925-8B84-F8E4BEBEEADB}&dist=morenews_ts

FYI: Calling Bush "shrub" isn't strengthening your argument. Name calling is a pretty weak debate tool (and I happen to agree with a lot of what you're saying)

You are correct and I was wrong. I often use "Air Force" generically to refer to military people involved in flying aircraft. I will be more precise in the future, especially if it materially alters a point.

---------- Post added at 05:56 PM ---------- Previous post was at 05:45 PM ----------

Here is a quote from the article you cited:

Obama's comments illustrate what you get when people who have never run a business or have had operational control of something take charge. Instead of acting like the "owner", which the government is, he fakes outrage and pretend he is not in control.

Here is how to handle the bonuses. Tell the CEO to meet with all the people contractually entitled to a bonus. Have the CEO tell them, they can either be fired or we can re-negotiate the agreement so that no bonus will be paid until after the bailout money is returned.

Obama, needs to act like he owns AIG and controls the check book. And, regarding the checkbook, he should tell the CEO about this new thing called an Excel Spreadsheet. Mr. CEO, in one column put the money we give you and in another list all outgoing payments - and send me a copy every day - and make sure it balances to what you have in your accounts.

We don't need hearings. We don't need legislation. We just need someone with business sense.

ace---i directed you at the list of banks that were paid by AIG in this last round in order to put to bed your silly claim that there was no pressure from other governments on the united states to act to salvage the firm. please try to stay on point. moving to an entirely different section of the article, biting a couple sentences and then launching into a repeat of the sort of nonsense you can hear any weeknight coming from the talking heads on cnbc really is not of any interest. sorry to break it to you.

You're right. Sorry I'm tried. Both of the mess Mr. Bush and his neocon pals left and just worn out in general.

I've edited my post to remove the "shrub" reference. I stand by my shit sandwich remark.

that wasn't even really aimed at you :)