Government Incompetence and why should some people quit now
But it misses the main outrage, so here goes:
Reluctantly I'm linking to a rant by Jim Cramer:
Sell Block: Hedge Funds Cash In on AIG
Hedge funds, which have been selling stock endlessly to meet client redemptions, must be frothing at the mouth for next Tuesday, Oct. 21. That’s payday for everyone who took out insurance against Lehman Brothers' bonds. And bear-raiding hedge funds took out a heck of a lot of insurance against that investment bank.
In fact, while Lehman Brothers sold only $158 billion worth of bonds, the SEC allowed hedge funds to take out $365 billion in insurance.
This was all part of the short-sellers grand – and legal – plan to bring down Lehman, Cramer said. Hedge funds bought the insurance knowing they could push the stock down virtually unrestricted, spurring the ratings agencies to downgrade Lehman, further inciting fear, and on and on until the company collapsed. The fact that the U.S. government said it was done saving investment banks only aided the hedge funds’ cause. To them, that insurance was money in the bank.
Guess which company probably did the most underwriting of said insurance. Yep, AIG. That means the U.S government, which now owns most of AIG, will most likely spend next Tuesday cutting checks to the hedge funds involved. Cramer thinks this payout will erase whatever value might be left in AIG’s common stock. So the company’s going in the Sell Block.
And this doesn’t even take into account the myriad other issues at AIG.
Here's my point:
The SEC allowed the following illegal activities to happen, which leads me to call for the resignation of EVERY EMPLOYEE IN THAT DEFUNCT AND CORRUPT ENTITY:
- Allow naked shorts (illigal) - the act of selling short without the need to borrow the equity first. This increases the amount of available shares - and destroying beyond repair the balance of supply and demand.
- Allow credit default swaps beyond actual debt, regardless of ownership of bonds
- Allow Lehman to issue more debt to equity than ever before, not declaring them insolvent way before the market pounced to destroy them
How could he not understand what was happening under his watch? How could they let Lehman be destroyed - and yet decide to rescue AIG?! And why haven't the execs of AIG been sacked yet? How difficult is it to remove those criminals from their chairs? Why haven't we heard yet of any criminal investigations aginst AIG and Lehman execs?
I think Cramer touched the most infuriating part: The Tax payer is going to pay up those who have demolished the economy at the beginning of September. Those really nasty, greedy SOB-s who manipulated and broke the back of the economy are going to get their windfall from AIG in a couple of days - and AIG is owned by the tax payer.
I'm blaming the bears for pushing us over the edge, but I blame the polititions for bringing us to the point of standing at the edge. The first and most obvious viliouns here are:
forcing subprime mortgage on conservative mortgage issuers would bring their collapse but they liked playing the populist card of "caring for the poor". Let the poor have houses - on the expense of having any functioning economy at all.
Where does this all lead? Will it really lead to a socialist "spread the wealth" presidency? Wasn't this kind of robbing the rich thought process what lead us hear?