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davelj
ParticipantAs 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.
ParticipantAs 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.
ParticipantAs 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.
Participant[quote=kev374]is this reliable? They are saying that if they can’t raise $75 billion by end of day tommorow they have to file bankruptcy on Wednesday. That seems a bit too far fetched for me to believe! If this is not the case then I would say CNBC is going down the path of very irreponsible journalism by spreading this kind of panic.[/quote]
A week ago no one believed that Lehman would have to be sold or go BK. I’m not saying CNBC is correct, but it wouldn’t surprise me one bit if they are. Given the events of recent months, this is not too far fetched to believe.
Participant[quote=kev374]is this reliable? They are saying that if they can’t raise $75 billion by end of day tommorow they have to file bankruptcy on Wednesday. That seems a bit too far fetched for me to believe! If this is not the case then I would say CNBC is going down the path of very irreponsible journalism by spreading this kind of panic.[/quote]
A week ago no one believed that Lehman would have to be sold or go BK. I’m not saying CNBC is correct, but it wouldn’t surprise me one bit if they are. Given the events of recent months, this is not too far fetched to believe.
Participant[quote=kev374]is this reliable? They are saying that if they can’t raise $75 billion by end of day tommorow they have to file bankruptcy on Wednesday. That seems a bit too far fetched for me to believe! If this is not the case then I would say CNBC is going down the path of very irreponsible journalism by spreading this kind of panic.[/quote]
A week ago no one believed that Lehman would have to be sold or go BK. I’m not saying CNBC is correct, but it wouldn’t surprise me one bit if they are. Given the events of recent months, this is not too far fetched to believe.
Participant[quote=kev374]is this reliable? They are saying that if they can’t raise $75 billion by end of day tommorow they have to file bankruptcy on Wednesday. That seems a bit too far fetched for me to believe! If this is not the case then I would say CNBC is going down the path of very irreponsible journalism by spreading this kind of panic.[/quote]
A week ago no one believed that Lehman would have to be sold or go BK. I’m not saying CNBC is correct, but it wouldn’t surprise me one bit if they are. Given the events of recent months, this is not too far fetched to believe.
Participant[quote=kev374]is this reliable? They are saying that if they can’t raise $75 billion by end of day tommorow they have to file bankruptcy on Wednesday. That seems a bit too far fetched for me to believe! If this is not the case then I would say CNBC is going down the path of very irreponsible journalism by spreading this kind of panic.[/quote]
A week ago no one believed that Lehman would have to be sold or go BK. I’m not saying CNBC is correct, but it wouldn’t surprise me one bit if they are. Given the events of recent months, this is not too far fetched to believe.
Participant[quote=TheBreeze][quote=tucker…]The Fed is stepping in by accepting equities (i.e., stocks) at the Fed Discount Window.
worked last time this happened.
but now bad news is worse.[/quote]When has the Fed ever accepted equities as collateral at the Discount Window?[/quote]
Never.
Participant[quote=TheBreeze][quote=tucker…]The Fed is stepping in by accepting equities (i.e., stocks) at the Fed Discount Window.
worked last time this happened.
but now bad news is worse.[/quote]When has the Fed ever accepted equities as collateral at the Discount Window?[/quote]
Never.
Participant[quote=TheBreeze][quote=tucker…]The Fed is stepping in by accepting equities (i.e., stocks) at the Fed Discount Window.
worked last time this happened.
but now bad news is worse.[/quote]When has the Fed ever accepted equities as collateral at the Discount Window?[/quote]
Never.
Participant[quote=TheBreeze][quote=tucker…]The Fed is stepping in by accepting equities (i.e., stocks) at the Fed Discount Window.
worked last time this happened.
but now bad news is worse.[/quote]When has the Fed ever accepted equities as collateral at the Discount Window?[/quote]
Never.
Participant[quote=TheBreeze][quote=tucker…]The Fed is stepping in by accepting equities (i.e., stocks) at the Fed Discount Window.
worked last time this happened.
but now bad news is worse.[/quote]When has the Fed ever accepted equities as collateral at the Discount Window?[/quote]
Never.
September 14, 2008 at 9:51 PM in reply to: Lehman Said to Prepare Bankruptcy as Buyers Withdraw (BofA to pick up Merril Lynch) #270316Participant[quote=TheBreeze]Why is BofA paying a premium for MER? And why such a massive premium? MER was trading for $17 on Friday and BofA is going to pay $29.
That’s ridiculous. The gubmint must be involved somehow.[/quote]
In this whole bizarre mess, the price BofA is paying for Merrill is the most bizarre. Normally I can come up with some oddball potential explanation. But this one? Can’t do it. I’m mystified.
But I’m assuming it has some tie into saving BofA’s ass in the end. For example, if allowing Merrill to fail after Lehman failed then caused BofA to go down the tubes as a result (due to a lack of confidence in the system) then MAYBE BofA figured: “We’re the only party that can buy these clowns and we have to make it look like all of the clowns are worth something. Because if the clowns aren’t worth anything, then we’re not worth anything (even though we’re a money center bank – a higher caliber of clown than the investment banks). The illusion must be maintained that clowns are valuable. Therefore, we will use our stock (re: funny money) as a currency and buy Merrill at a premium to keep the illusion of value in tact… hopefully long enough to get us all out of the woods.”
That’s the best I can do. Totally weird.
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