AIG Downgraded! Terrible news

[jficquette]

[quote=davelj]As much as I think the Establishment will try to move heaven and earth to make sure AIG doesn’t fail, I just don’t see how it all comes together without help from the visible hand of the government.

The problem is simple: Due Diligence. There’s no way in hell that anyone, without a backstop from the government, will provide AIG with capital without spending serious time on due diligence given the complexity of its business. I just can’t see it happening. This process would take at LEAST a month involving well over 100 professionals under normal circumstances. I realize that these aren’t normal circumstances, but how can a company put up capital in good faith without knowing what they’re signing up for? Without the government I just don’t see how AIG is saved.[/quote]

I agree however they did do the Bear Sterns deal over a 3 day weekend.

John

[Anonymous]

Armageddon is when the rest of the world feels that the US tax payer cant afford to pay for this mess.

[Anonymous]

Armageddon is when the rest of the world feels that the US tax payer cant afford to pay for this mess.

[Anonymous]

Armageddon is when the rest of the world feels that the US tax payer cant afford to pay for this mess.

[Anonymous]

Armageddon is when the rest of the world feels that the US tax payer cant afford to pay for this mess.

[Anonymous]

Armageddon is when the rest of the world feels that the US tax payer cant afford to pay for this mess.

[davelj]

[quote=jficquette][quote=davelj]As much as I think the Establishment will try to move heaven and earth to make sure AIG doesn’t fail, I just don’t see how it all comes together without help from the visible hand of the government.

The problem is simple: Due Diligence. There’s no way in hell that anyone, without a backstop from the government, will provide AIG with capital without spending serious time on due diligence given the complexity of its business. I just can’t see it happening. This process would take at LEAST a month involving well over 100 professionals under normal circumstances. I realize that these aren’t normal circumstances, but how can a company put up capital in good faith without knowing what they’re signing up for? Without the government I just don’t see how AIG is saved.[/quote]

I agree however they did do the Bear Sterns deal over a 3 day weekend.

John[/quote]

True, but Jamie Dimon has admitted publicly since the Bear Stearns deal that he wouldn’t have done the deal if offered another chance to turn it down. I think proper due diligence would have revealed the folly of the transaction. Now folks know how ugly the innards of these companies are. Now they either want time to perform proper due diligence or a government backstop – which are completely rational desires. On a related topic, I believe that Ken Lewis (sorry, make that Ken Lewis’s shareholders) will rue the day he agreed to acquire Merrill on such short notice.

[davelj]

[quote=jficquette][quote=davelj]As much as I think the Establishment will try to move heaven and earth to make sure AIG doesn’t fail, I just don’t see how it all comes together without help from the visible hand of the government.

The problem is simple: Due Diligence. There’s no way in hell that anyone, without a backstop from the government, will provide AIG with capital without spending serious time on due diligence given the complexity of its business. I just can’t see it happening. This process would take at LEAST a month involving well over 100 professionals under normal circumstances. I realize that these aren’t normal circumstances, but how can a company put up capital in good faith without knowing what they’re signing up for? Without the government I just don’t see how AIG is saved.[/quote]

I agree however they did do the Bear Sterns deal over a 3 day weekend.

John[/quote]

True, but Jamie Dimon has admitted publicly since the Bear Stearns deal that he wouldn’t have done the deal if offered another chance to turn it down. I think proper due diligence would have revealed the folly of the transaction. Now folks know how ugly the innards of these companies are. Now they either want time to perform proper due diligence or a government backstop – which are completely rational desires. On a related topic, I believe that Ken Lewis (sorry, make that Ken Lewis’s shareholders) will rue the day he agreed to acquire Merrill on such short notice.

[davelj]

[quote=jficquette][quote=davelj]As much as I think the Establishment will try to move heaven and earth to make sure AIG doesn’t fail, I just don’t see how it all comes together without help from the visible hand of the government.

The problem is simple: Due Diligence. There’s no way in hell that anyone, without a backstop from the government, will provide AIG with capital without spending serious time on due diligence given the complexity of its business. I just can’t see it happening. This process would take at LEAST a month involving well over 100 professionals under normal circumstances. I realize that these aren’t normal circumstances, but how can a company put up capital in good faith without knowing what they’re signing up for? Without the government I just don’t see how AIG is saved.[/quote]

I agree however they did do the Bear Sterns deal over a 3 day weekend.

John[/quote]

True, but Jamie Dimon has admitted publicly since the Bear Stearns deal that he wouldn’t have done the deal if offered another chance to turn it down. I think proper due diligence would have revealed the folly of the transaction. Now folks know how ugly the innards of these companies are. Now they either want time to perform proper due diligence or a government backstop – which are completely rational desires. On a related topic, I believe that Ken Lewis (sorry, make that Ken Lewis’s shareholders) will rue the day he agreed to acquire Merrill on such short notice.

[davelj]

[quote=jficquette][quote=davelj]As much as I think the Establishment will try to move heaven and earth to make sure AIG doesn’t fail, I just don’t see how it all comes together without help from the visible hand of the government.

The problem is simple: Due Diligence. There’s no way in hell that anyone, without a backstop from the government, will provide AIG with capital without spending serious time on due diligence given the complexity of its business. I just can’t see it happening. This process would take at LEAST a month involving well over 100 professionals under normal circumstances. I realize that these aren’t normal circumstances, but how can a company put up capital in good faith without knowing what they’re signing up for? Without the government I just don’t see how AIG is saved.[/quote]

I agree however they did do the Bear Sterns deal over a 3 day weekend.

John[/quote]

True, but Jamie Dimon has admitted publicly since the Bear Stearns deal that he wouldn’t have done the deal if offered another chance to turn it down. I think proper due diligence would have revealed the folly of the transaction. Now folks know how ugly the innards of these companies are. Now they either want time to perform proper due diligence or a government backstop – which are completely rational desires. On a related topic, I believe that Ken Lewis (sorry, make that Ken Lewis’s shareholders) will rue the day he agreed to acquire Merrill on such short notice.

[davelj]

[quote=jficquette][quote=davelj]As much as I think the Establishment will try to move heaven and earth to make sure AIG doesn’t fail, I just don’t see how it all comes together without help from the visible hand of the government.

The problem is simple: Due Diligence. There’s no way in hell that anyone, without a backstop from the government, will provide AIG with capital without spending serious time on due diligence given the complexity of its business. I just can’t see it happening. This process would take at LEAST a month involving well over 100 professionals under normal circumstances. I realize that these aren’t normal circumstances, but how can a company put up capital in good faith without knowing what they’re signing up for? Without the government I just don’t see how AIG is saved.[/quote]

I agree however they did do the Bear Sterns deal over a 3 day weekend.

John[/quote]

True, but Jamie Dimon has admitted publicly since the Bear Stearns deal that he wouldn’t have done the deal if offered another chance to turn it down. I think proper due diligence would have revealed the folly of the transaction. Now folks know how ugly the innards of these companies are. Now they either want time to perform proper due diligence or a government backstop – which are completely rational desires. On a related topic, I believe that Ken Lewis (sorry, make that Ken Lewis’s shareholders) will rue the day he agreed to acquire Merrill on such short notice.

[cashflow]

We don’t really actively trade in the markets…new to this stuff…but thanks to you guys here, I was able to give my husband the heads up on what was happening Sunday night. He sold what we had at a small profit in the morning…I’m thinking with the news tonight that I’m really glad he did…what are people’s predictions about the market tomorrow?

I’m wondering how this is going to play out in the housing market down the road? How is this going to affect the lenders? Are they going to have to tighten (finally). I know they already have tightened, but I still don’t feel like the rules have completely gotten back to where we were 10 years ago in lending standards.

[cashflow]

We don’t really actively trade in the markets…new to this stuff…but thanks to you guys here, I was able to give my husband the heads up on what was happening Sunday night. He sold what we had at a small profit in the morning…I’m thinking with the news tonight that I’m really glad he did…what are people’s predictions about the market tomorrow?

I’m wondering how this is going to play out in the housing market down the road? How is this going to affect the lenders? Are they going to have to tighten (finally). I know they already have tightened, but I still don’t feel like the rules have completely gotten back to where we were 10 years ago in lending standards.

[cashflow]

We don’t really actively trade in the markets…new to this stuff…but thanks to you guys here, I was able to give my husband the heads up on what was happening Sunday night. He sold what we had at a small profit in the morning…I’m thinking with the news tonight that I’m really glad he did…what are people’s predictions about the market tomorrow?

I’m wondering how this is going to play out in the housing market down the road? How is this going to affect the lenders? Are they going to have to tighten (finally). I know they already have tightened, but I still don’t feel like the rules have completely gotten back to where we were 10 years ago in lending standards.

[cashflow]

We don’t really actively trade in the markets…new to this stuff…but thanks to you guys here, I was able to give my husband the heads up on what was happening Sunday night. He sold what we had at a small profit in the morning…I’m thinking with the news tonight that I’m really glad he did…what are people’s predictions about the market tomorrow?

I’m wondering how this is going to play out in the housing market down the road? How is this going to affect the lenders? Are they going to have to tighten (finally). I know they already have tightened, but I still don’t feel like the rules have completely gotten back to where we were 10 years ago in lending standards.

[Author]

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