Really
 

No posts about the massive investment back collapse? We're fucked.

I wish I knew more about the situation to comment on it. From the little I do know, I wonder if the Fed's shouldn't have helped out AIG. Almost as a, 'you got yourself into this, get yourself out'. But then again, that might be wrong.

I would like it if they could cut the pay of/fire/layoff the executives that got the company in that mess.

That would be nice, wouldn't it?

I'm not commenting on it because I like that GC, for the most part, is where I don't have to think about this stuff.

In short, it sucks. Most of my friends, and a good number of our clients, are involved in big-time investment banking. I think Middle America may feel the financial crush before I will, but we're feeling the emotional crush here in NYC.

I hesitate to say we're effed but I also would not merely call this an "adjustment". What is your feedback on it, PG? I could post fun quips from Daily Show or Colbert, but you know how those would go (they've been hilarious, though). Or I could start a big lecture about how more regulation is needed in certain sectors (as the mortgage industry clustermuck loudly screams), but we know how that would go here as well. I do know my husband and I and other members of our family made the conscious decision not to panic and start selling or withdrawing or moving things around in a tizzy. I don't know that we have much choice but to ride it out at this point, do we? Despite the obvious lack of oversight, competence and care that's been happening at the highest levels, we are almost forced to still lay some kind of trust that things will stabilize because what's the alternative?

I have a few friends who have either A) just started working for one of the companies involved or B) worked there as a summer associate/intern, and are now freaking out about their jobs. We talk all the time in law school about the economy, and how it's affected the hiring practice of firms and companies, but nothing like this.

I feel for everyone involved; employees, investors, everyone - just a bad situation.

My bf has been calling this for the last 1.5-2 years. Seriously. He thinks it could come close to what we saw during the Great Depression. It terrifies me the way he talks about it; for a long time I ignored what he was saying, but it's all been coming true so now I think he really does know what he's talking about. I'm glad I moved some of my money into bonds several months ago, but he says that bonds are about to bust, too.

This was definitely a long time coming. There isn't a whole lot to say, our economy (like all capitalist economies) is cyclical and it will recover to be stronger than its ever been but in the short term things aren't looking good. There are going to be lasting effects felt by everyone here because companies will not have the capital to operate and our unemployment rate is going to go very high.

Teachers all over are worried. Some of our retirement funds are tied up in these. I don't want to lose any money, because no way am I teaching past 60!

Here are the terms of the AIG bailout:

http://www.bloomberg.com/apps/news?p...Ld0&refer=home

The CEO is going to be replaced by the former CEO of Allstate Ins. It doesn't detail who else will get replaced. It looks as if the exiting CEO may still get a huge bonus:

http://www.nypost.com/seven/09182008...xit_129673.htm


http://www.postchronicle.com/news/br...12172602.shtml

Willumstad only held the job for a few months...I think that the former CEO needs to shoulder some of the blame for this and should be prosecuted....for something..don't know what but these execs need to be held accountable.

So the former CEO of AIG, the man responsible for running the company into the ground, left last June with a severence package worth $47 million!! THis is criminal...

http://www.directorship.com/sullivan-to-receive--47m

What is up with this????? There is a crime here, there has to be! I wish I could do a crappy job and still earn truckloads of money!

The government bailed out AIG to the tune of 85 billion at an 8.5% interest rate.

This is something we've talked about ad nauseum (sp?) at work. I don't work in that industry, but it certainly is affecting everyone's 401k and other industries that tend to rely on people to spend money on non-essential products.

I have some friends in the industry and the feeling is not good. It's scary that Lehmans' could survive the Great Depression but couldn't survive this... whatever it is... b/c so many people in Washington don't want to call it a recession. I'm not going to pretend I know what happened in their business, but I think they got greedy and got mixed up in the subprime business which helped spell their doom. Again, I don't know the specifics, so if that's not what happened with them I will stand corrected.

Like someone else mentioned, I think it's really crappy that the executives who made the decisions to screw over their company are the ones getting the nice severance packages while their employees are left jobless and their actions are screwing up the already-shaky economy.

hell, meet handbasket.

Our work is in the process of changing which funds we can choose for our retirement funds. As part of this process, 7 of the previous funds we could choose are no longer options and there are a bunch of new options. So basically, everybody has to switch. I had moved my stuff into the new funds a few weeks ago, then moved it all into the bond fund option on Monday. I'm not sure whether to leave it there or whether to choose the money market option for now. The kicker is, we have a blackout period from Sept 22-Oct 5 where we can make no changes! So, if you choose a fund that totally tanks during that time period, you're totally stuck. The timing on this couldn't be worse...

Please see Section 8: http://www.washingtonpost.com/wp-dyn...002376_pf.html

Non-reviewable. Is he high? What the hell is going on in this country? Didn't Paulson used to be the head of Goldman-Sachs? Isn't it his former industry on the front line of the financial market implosions? Holy christmas trees.

I support the AIG bailout because they gave them an 8.5% interest rate but unless the banks are willing to make the same deal then they should be allowed to collapse.

You know what really sucks? We don't have a choice here, peeps...we HAVE to bail out these suckers or else our economy will suffer a major collapse. AIG may just be an insurance company, but it's the companies it insures that is the key.

Well, collapse can be part of the natural cycle . . . kind of like brushfires that allow a forest ecosystem to actually function correctly.

Bailing these companies out may only put off the problem - a short-term fix for a long-term problem.

McCain evidently thinks that cancelling the debate on Friday will help things...

ETA: Link to the developing story http://www.cnn.com/2008/POLITICS/09/...rap/index.html

And it might make it worse if we bail these companies out and they fail anyhow, leaving the American people holding the bulk of their bad assets.

It actually says "postpone". And the Democrats aren't going to score any political points by suggesting that a SENATOR should go somewhere to talk on TV instead of say, participating in the consideration of and voting on one of the most important issues to come before the SENATE in years.

To make it out as a bad thing is idiotic.

http://blogs.abcnews.com/politicalra...-not-comm.html

Obama's camp used the phrase "The debate is on." Mistake in my mind. McCain looks presidential by suspending his campaign and "taking the high road" and actually doing what he was elected to do.

If Obama's camp doesn't get him to Washington and ease back on that debate statement, they are going to get burned by all sorts of ads when McCain restarts his campaign.

"Mr. Obama would rather campaign than address a historic crisis before our nation..." etc. etc. And ending in one of those trademark ending's McCain's ads have had: "Barrack Obama: Ready to Campaign, Not Ready to Lead."

"While the Senate addressed the biggest financial crisis since the Great Depression, Barrack Obama hosted a $750,000 fundraiser. Out of touch with America, unwilling to lead in times of crisis. That's the real Barrack Obama."

And etc. etc. ad nauseum.

Neither of the SENATORS has been acting in his role for about the last year. They've missed plenty while they've been out, and the American public seems to see through McCain's spin pretty well this time. This is a stall tactic, possibly so one of the debates will have to be eliminated (the VP one?). If they must go back to DC and vote, fine, vote and then debate. But the debate should go on as planned. Our future president should be able to juggle more than one issue at a time, and though the economy is in crisis, I see the first presidential debate as pretty damn important, too. The difference between the economy issue and the debates is that both senators' colleagues can handle the negotiations and votes without them (whichever resolution makes it through, it's going to be passed), but only the senators can debate. Anyway, I believe both men are being so nitpicked right now that I don't think either of them could ponder or speak honestly in hammering out a resolution without having to consider how it will play in the campaign, which makes them useless in my mind. They should stay the course with what they've BOTH been focused on for many months, which is campaigning and debating.

I agree...

Mr. McCain's tactic looks a little see-through to me.

Agree.

And Crackerbarrel, you're correct...it does say "postpone" in the link that I added after I had posted my statement. Sorry.

I can see this and it may actually create even worse problems. A free market has to include the possibility that businesses and industries fail. If the deal is that the federal government bails out private companies that screw up, aren't we inviting even greater risk taking OR a ridiculous about of regulation to prevent the government from assuming more risk in the future? Neither sounds that good to me.

But, I'm not sure that we can afford to really see this carried out with Freddie Mac and Fannie Mae right now AND I'm not sure that they were really private companies in terms of their practices and treatment before the current crisis. With them, there seems to be some actual government culpability that the government might be obligated to address. With any company that was strictly private though, it's hard to see how it's good long term policy to bail them out.

I think the only issue is that McCain beat Obama to making this move. Had Obama wanted to go back to Washington, and McCain wanted to continue campaigning, I doubt anyone complaining here now would be complaining about Obama's decision. They'd be vilifying McCain.

From a purely campaign perspective, not even getting in to actual good government, I think it was smart for McCain, and that's probably what really drives people nuts. He now seems much more authentically concerned about the economy.

Wachovia is next...
 

Sad how once someone goes under, there's a new "little guy" left vunerable.

Fox article

Hmm, glad my money's out of Wachovia.

I'm thinking about just hiding it under my mattress. ;)

It's official...Wachovia has been purchased by Citigroup. Isn't Citi owned by the Saudi royal family?

I couldn't find that info. Where should I look?

ETA: http://money.cnn.com/2007/11/08/news...tune/index.htm

"In the midst of staggering losses and intense public scrutiny, former Citigroup CEO Charles O. Prince III could always count on the support of the company's biggest individual shareholder: Prince Alwaleed bin Talal bin Abdul Aziz al Saud. Less than a month ago, the Saudi prince, who owns 3.6% of the company, even dismissed a sharp drop in earnings as a 'mere hiccup.'"

He is the single biggest share holder, but at 3.5%, I'm not sure if it makes sense to say he or his family owns the company.

Well, that's why I added the question mark - it was a question.

My father, of all people, sent me this link, he even added a "LOL". ;)

The 401Keg Plan

I simply have this totally helpless feeling about all of this. I decided I have to let it go. As I told the kids, as long as I have a job, we'll be ok. They are feeling the fear from all of the adults around them and the news reports. And, if worse comes to worse, well, my brother and I haven't yet sold my mom's condo so I'm sure he'd let me live there for what it's costing us to carry it if something disastrous occurred.

When we've had natural disasters, people donate money, have blood drives, etc. After 9/11, we had prayer vigils and blood drives, and donations, we hung flags.. there were things we could DO that helped us make it better somehow. With this national crisis, it doesn't feel like there's anything we can DO. We just keep watching the market, and hoping it gets better soon.