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Strategies & Market Trends : Value Investing

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To: Spekulatius who wrote (33895)	3/20/2009 10:39:09 AM
From: Dale Baker	3 Recommendations Read Replies (3) of 78740

if they had let AIG fail, they would have had to ringfence the fallout (which is worldwide) or the panic would have been incredible. How do you ringfence a $2.6 trillion derivatives book all at once? It would have been utterly impossible. The folks who talk about BKing AIG as a "cheaper alternative" don't seem to grasp what was at stake. Beyond that derivatives book, the consequences of multiple simultaneous BK's among most of the world's financial institutions would have brought the world economy to a halt. The fact that so many people gleefully ignore that basic fact just amazes me. Uncle Sam let AIG do some really awful, dangerous things. Now we are paying an awful price trying to clean it up without a meltdown.

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