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McCain Divided Over $85 Billion Bailout For AIG

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McCain Divided Over $85 Billion Bailout For AIG Republican presidential candidate John McCain isn't saying whether he supports or rejects the government's $85 billion bailout plan for the giant insurer AIG. McCain told ABC's Good Morning America on Wednesday that he didn't want to bail out American International Group Inc., the nation's largest corporate insurer. Yet he said millions of people whose finances were tied up in the company were in danger of having their lives destroyed. Before the bailout was announced, McCain had said flatly that he would not support a bailout of AIG or any other company.

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Jillness Jillness 9 years
Ok, now I am more scared. I just saw a clip of an interview he did in Nov. 2007, and about the mortgage crisis he says, "I'd like to say I anticipated it, but I didn't not." "I can't give specific solutions, I don't claim to be smart enough." Does that give anyone else pause for concern?
Jillness Jillness 9 years
Yes. That and lowering the Federal interest rate too frequently. I am still waiting for McCain's specifics on this topic. He throws around vague terms like "reform", but he can't be anymore specific than that. That concerns me.
sexylibrarian sexylibrarian 9 years
Yes they do Roarman!
Roarman Roarman 9 years
Don't most top economists feel that deregulation is what put all of these companies in this position, not too much regulation?
Michelann Michelann 9 years
Excellent points, 3M
juju4 juju4 9 years
McCain has been changing his position so frequently with regards to the economy.....he was a deregulator, and now he's all for regulation. He was against bailing them out, now he is for it. Too bad he doesn't see that all that deregulation is what has created the need to bail these companies out in the first place.
mymellowman mymellowman 9 years
One last thing, the Fed has only really gotten this power to start throwing money around so heavily in the past year as Congress wanted to "save" us from the mortgage crisis by allowing the Fed to take on these bad debts.
mymellowman mymellowman 9 years
I have to go to class, but I will try and come back with a more detailed response later.
mymellowman mymellowman 9 years
We're not talking catalysts here, we're discussing why and how the Fed has the ability to do what it is doing. This is not a result of that act, that act allowed Investment Banks to merge with other financial services (such as commercial banking and insurance.) If you want to go into the act, though, you could actually say that this act has helped to prevent further meltdowns as Investment Banks are allowed to merge into other banks such as Meriil has just been purchased by BoA and (though bailed by the Fed) JPMorgan was allowed to bring Bear Sterns into their fold.
sexylibrarian sexylibrarian 9 years
I am not pointing fingers either just stating some facts. Cliton did sign the bill making it a law so there you go.
sexylibrarian sexylibrarian 9 years
Actually mymellow is was the repealing of the Glass Stegall Act by Phill Gramm and other republicans that was the was the catalyst of all of this. The Gramm-Leach-Biley Act was signed in 1999 make it easy for the banks and insurance companies to merge.
lilkimbo lilkimbo 9 years
I don't see him as confused in the least. He understand why the bailout happened, but still disagrees with it.
Adrenalynn75 Adrenalynn75 9 years
Mymellow, that's why I'm an Independent. I don't vote by party, I vote on who I feel can do the job and do it right. And I agree, the people in power, rep and dems are at fault for this crisis. And it's the little gal like me, who owns a home and did'nt fall prey to bad lending practices that gets screwed bailing out these bad business investments. :(
UnDave35 UnDave35 9 years
"As crazy as this week has been, I believe we are just beginning to see what Congress has given the power to the Fed to do." The power, and the result of that power.
mymellowman mymellowman 9 years
Luckily we have you here to clarify the headlines for us YY.
mymellowman mymellowman 9 years
The power given to the Fed was pushed through a Democrat Congress with objections by many Republicans to the amount of power that was being given. This isn't just a presidential issue, all of Congress allowed this to happen by not putting in caps on the Fed's power. Please note, I am not pointing fingers at Dems solely on this, as there were many Republicans that also allowed us to travel down this course. I'm just trying to show that this isn't a solely presidential issue, this is a Congressional issue as well. As crazy as this week has been, I believe we are just beginning to see what Congress has given the power to the Fed to do.
yesteryear yesteryear 9 years
headline should be "mccain CONFUSED over bailout..."
Adrenalynn75 Adrenalynn75 9 years
I agree with you on Lehaman's and Bear Stearns. No argument from me there. But AIG's bailout has everything to do with their insurance arm. Why else would the government bail them out? I'm at a loss on why AIG would need a bail out then. If it was'nt the insurance arm of the company, then really this government is worse then I thought and gives me more reason to want to vote these bums out of office!
mymellowman mymellowman 9 years
In regards to why we bailed AIG and didn't Lehman: 1. We shouldn't have bailed AIG. The losses should have been taken. 2. Lehman is an interesting situation. First, they shouldn't have been bailed out. Additionally, Bear Sterns should not have been bailed out either. I believe that if the Fed had not bailed out Bear Sterns then Lehman would not have gone into Bankruptcy. Why? Lehman Brothers had numerous opportunities to raise cash, but did not take previous offers as they felt they were not getting offered what they were worth. I believe if the Fed had not bailed out Bear Sterns that Lehman would have taken the offers more seriously as they would not have been belieiving that if all else failed that the Fed would probably rescue them.
mymellowman mymellowman 9 years
"For one thing, banks and mutual funds are major holders off AIG's debt and could take a hit if the insurer were to default. In addition, AIG was a major seller of "credit-default swaps," essentially, insurance against default on assets tied to corporate debt and mortgage securities. Weakness at AIG could force financial institutions in the U.S., Europe and Asia that bought these swaps to take write-downs or losses. AIG's millions of insurance policyholders appear to be considerably less at risk. That's because of how the company is structured and regulated. Its insurance policies are issued by separate subsidiaries of AIG, highly regulated units that have assets available to pay claims. In the U.S., those assets can't be shifted out of the subsidiaries without regulatory approval, and insurance is also regulated strictly abroad." The above is from the Wall Street Journal
Adrenalynn75 Adrenalynn75 9 years
If AIG was solid on the insurance side, why did we bail them out again? We didn't bail out Lehmen brothers, but we decided to help the leading insurance company?
mymellowman mymellowman 9 years
The insurance you are speaking of, Ad, is actually heavily regulated and very protected. These people are fully insured and covered through separate subsidiaries of AIG. They actually wouldn't be all that affected by what is occurring right now. Additionally, AIG has the assets to cover their liabilities, which means that it could possibly be broken up and sold, but the company would not disappear leaving people completely wiped out. The problem is that they can not turn those assets into cash fast enough to cover the drop in their rating. This is why they need the quick cash and no one wanted to lend it.
mymellowman mymellowman 9 years
It's ok, now you know. :)
Adrenalynn75 Adrenalynn75 9 years
No we shouldn't, but AIG isn't exactly Joe's corner store, where no one is effected if they fail but Joe. This is the leading insurance company in America. If they fail, how will residents of Houston rebuild after Ike? Louisiana after Gustav? Pay for all the wildfire damage in California? A lot of people owned and paid into insurance in AIG...if they fold these people are royally screwed. And the government knows it...which is why they're are bailing out one arm of their business.
livvylove livvylove 9 years
oh i'm sorry mymellow, i wasn't aware you were all knowing, my bad.
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