Quote:
Originally Posted by pocketkangaroo
As easy as it sounds to say "let them fail", I don't think people really understand what that means. AIG sold credit default swaps to basically every major financial institution in this country. If that happened, it literally would destroy our entire economic system. Banks would literally go insolvent overnight. You would lose most of your credit lines. You'd see unemployment in the high teens.
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so what is going on right now, that taxpayer aka AIG is paying CDS, while there isnt enough money to pay all CDS at all in the longer timeframe, just look on their size.
a lot of entities just speculate with CDS and dont own any bonds they would need insurance for - and the taxpayer money goes there too.
sooner or later, it will have to end. either US goverment will choose some kind of way how to sort this mess out or they can try to save every "too big to fail" institution and fail later with them. those idiots cant even make some estabilished CDS trading system and make some rules, like you cant issue CDS when you dont have a money to pay it off (like AIG was doing before).
the lack of sound responsive actions and crooks running the show make all sure to have a repeat of GD2.