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Rolling Stone article breaks down the AIG mess

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Rolling Stone article breaks down the AIG mess

Old 03-22-2009, 05:14 AM
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Default Rolling Stone article breaks down the AIG mess

http://www.rollingstone.com/politics...e_big_takeover

Its long, but a great read concerning the AIG meltdown. There are some political names in the article, but it is not a political piece...although it will surely devolve to that here.
Old 03-23-2009, 09:44 PM
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Great read. Thanks for posting it.
Old 03-25-2009, 07:51 AM
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The mgm't of AIG should share the same cell as Bernie Madoff. Good article
Old 03-25-2009, 08:05 AM
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Anyong catch the daily show yesterday? In general i dont find Stewart all that funny, but they tried to disect the AIG thing. Pretty funny
Old 03-25-2009, 12:10 PM
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Great article. Althouth he did neglect to mention which President signed the Commodities Futures Modernization Act into Law.
Old 03-25-2009, 12:27 PM
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Also, check this out. It wasn't a bunch of Indians in a back room that came up with the risk formula, it was this guy:

http://www.wired.com/techbiz/it/magazine/17-03/wp_quant
Old 03-26-2009, 02:14 PM
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Barney Frank and Chris Dodd should share the Madoff cell too
Old 03-26-2009, 07:33 PM
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Originally Posted by JEVLACH View Post
Great article. Althouth he did neglect to mention which President signed the Commodities Futures Modernization Act into Law.
The Commodity Futures Modernization Act of 2000 or CFMA (H.R. 5660 and S.3283) is United States federal legislation which repealed the Shad-Johnson jurisdictional accord, which had banned single-stock futures in 1982. The legislation also provided certainty that products offered by banking institutions would not be regulated as futures contracts.

This act was incorporated by reference into H.R. 4577, an omnibus spending bill. It was passed by the 106th United States Congress and signed by President Bill Clinton on December 21, 2000; the legislation thus became law as a part of H.R. 4577 - Public Law 106–554, §1(a)(5).
The act has been cited as a public-policy decision significantly contributing to Enron's bankruptcy in 2001 and the much broader liquidity crisis of September 2008 that led to the bankruptcy filing of Lehman Brothers and emergency Federal Reserve Bank loans to American International Group[1] and to the creation of the U.S. Emergency Economic Stabilization fund.


The "Commodity Futures Modernization Act of 2000" (H.R. 5660) was introduced in the House on December 14, 2000 by Rep. Thomas W. Ewing (R-IL) and cosponsored by Rep. Thomas J. Bliley, Jr. (R-VA) Rep. Larry Combest (R-TX) Rep. John J. LaFalce (D-NY) Rep. Jim Leach (R-IA) and never debated in the House.
The companion bill (S.3283) was introduced in the Senate on December 15, 2000 (The last day before Christmas holiday) by Sen. Richard Lugar (R-IN) and cosponsored by Sen. Peter Fitzgerald (R-IL) Sen. Phil Gramm (R-TX) Sen. Chuck Hagel (R-NE) Sen. Thomas Harkin (D-IA) Sen. Tim Johnson (D-SD) and never debated in the Senate.
The Republican leadership of the House incorporated "The Commodity Futures Modernization Act of 2000(H.R. 5660)" by reference, as Section 1(a)(7), in a long and complex conference report to the 11,000 page long "2000 omnibus budget bill" formally known as "The Consolidated Appropriations Act for FY2001(Labor, Health and Human Services, and Education Appropriations Bill) (H.R. 4577)." 157 Democrats and 133 Republicans voted for the appropriations bill. 51 Republicans and 9 Democrats opposed the appropriations bill vote results in the house. The Senate version passed by "Unanimous Consent." President Clinton signed it into Public Law (106-554) on December 21, 2000.
Main article: Enron loophole
The Commodity Futures Modernization Act of 2000 has received criticism for the so-called "Enron loophole," 7 U.S.C. §2(h)(3) and (g), which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. The "loophole" was drafted by lobbyists for Enron working with senator Phil Gramm[3] seeking a deregulated atmosphere for their new experiment, "Enron On-line."[4]
Several Democratic legislators introduced legislation to close the loophole from 2000-2006[5][6] but were unsuccessful.
In September 2007, Senator Carl Levin (D-MI) introduced Senate Bill S.2058 specifically to close the "Enron Loophole" [7] This bill was later attached to H.R. 6124, the Food, Conservation, and Energy Act of 2008, aka "The 2008 Farm Bill". President Bush vetoed the bill, but was overridden by both the House and Senate, and on June 18, 2008 the bill was enacted into law.[8]. One specific reason behind its introduction was to address the record high oil prices of the 2000s energy crisis.
The prohibition on single-stock futures and narrow-based indices that had been in effect until the passage of this act was known as the Shad-Johnson Accord because it was first announced in 1982, as part of a jurisdictional pact between John S.R. Shad, then chairman of the U.S. Securities and Exchange Commission and Phil Johnson, then chairman of the Commodity Futures Trading Commission.[

H.R. 4577


H.R. 4577 was an appropriations/budget bill encompassing the funding for the Departments of Labor, Health and Human Services, and Education for fiscal year 2001 which had already begun in September 2000.[9] This budget bill included:
  1. H.R. 5656 - Labor HHS Education Appropriations;
  2. H.R. 5657 - Legislative Branch Appropriations;
  3. H.R. 5658 - Treasury Appropriations;
  4. H.R. 5666 - Miscellaneous Appropriations - except section 123 relating to the enactment of H.R. 4904;
  5. H.R. 5660 - Commodity Futures Modernization;
  6. H.R. 5661 - Medicare, Medicaid and SCHIP Benefits Improvement and Protection;
  7. H.R. 5662 - Community Renewal Tax Relief and Medical Savings Accounts;
  8. H.R. 5663 - New Markets Venture Capital Program; and
  9. H.R. 5667 - Small Business Reauthorization.
Old 03-26-2009, 07:55 PM
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Oh No! You mean George B isn't responsible? Slick Willy and Rubin did it?

For those of you with longer memories, Hank Greenberg is the real bad guy here. After a few disastrous hurricane years 2002 -2005 AIG really started sweating. The following 4 years were just the snowball rolling downhill with no one able to stop it.

The real question here is will the government still allow equity houses, banks and insurers to do the other's business. That permission helped to start of this mess. Government experimentation has played a major role and Dodd, Barney etc know it. That is why they are so willing to bend over now.

Good old Andrew Jackson - nearly 200 years ago the banks and federal reserve were so messed up he shut em all down. It worked.
Old 03-26-2009, 08:57 PM
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I was just reading about the AIG Paris office, they are turning a profit. Seems they go into this scheme where they insure a bank's liability, therefor freeing up the bank to lend money it would otherwise be required to keep in reserve. Now get this -- it all works OUTSIDE of the regulatory commission in France. They call the product a "derivative".

Yeah, AIG is still at it!!! And best part is, the US tax dollars used to bailout AIG's ass are being used to shore up the AIG Paris operation, to back the derivatives they are writing.

Bottom line -- we are paying to back AIG in France, which is using our money to generate capital for Euro banks to loan out, to jump start the Euro economy.

And it doesn't stop there -- AIG struck an agreement with the US Treasurey to back it's backing of the world's largest aircraft leasing corp. They are the largest purchaser of Boing and Airbus product that gets leased to whomever wants a airliner. Again - our tax dollars are work, supporting Europe (Airbus) business.
Old 03-27-2009, 06:23 AM
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Originally Posted by wmalloy382 View Post
Anyong catch the daily show yesterday? In general i dont find Stewart all that funny, but they tried to disect the AIG thing. Pretty funny
Jon Stewart is a dbag. His real last name is Leibowitz and his brother works for the NYSE - which means he talks out of both sides of his mouth.
Old 03-27-2009, 06:49 AM
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that article is pretty good. you can almost here the author gritting his teeth when he mentions the name of the gov't official, c.k. lee, that was supposed to be keeping watch over aig.


Originally Posted by Venture34 View Post
Jon Stewart is a dbag. His real last name is Leibowitz and his brother works for the NYSE - which means he talks out of both sides of his mouth.
i don't really understand that statement. do you claim any responsibility/credit/blame for your siblings activities?

bottom line: the guy is a comedian. if you're looking for him to be an objective news source...well, that's your problem, not his.
Old 03-27-2009, 09:01 AM
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Originally Posted by happyjack92 View Post

Originally Posted by Venture34
Jon Stewart is a dbag. His real last name is Leibowitz and his brother works for the NYSE - which means he talks out of both sides of his mouth.



i don't really understand that statement. do you claim any responsibility/credit/blame for your siblings activities?

bottom line: the guy is a comedian. if you're looking for him to be an objective news source...well, that's your problem, not his.
I think Venture34's idea is that Stewart was throwing out salvo as if it was credible information, and then when confronted for do it, he hid behind his comedian facade. And then he did it again. And again. ... I wasn't about if he was a credible news source, it was about him talk out of both sides of his mouth.
Old 03-27-2009, 09:46 AM
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Originally Posted by happyjack92 View Post
that article is pretty good. you can almost here the author gritting his teeth when he mentions the name of the gov't official, c.k. lee, that was supposed to be keeping watch over aig.




i don't really understand that statement. do you claim any responsibility/credit/blame for your siblings activities?

bottom line: the guy is a comedian. if you're looking for him to be an objective news source...well, that's your problem, not his.
In my opinion, Mr Stewart has in fact become more of a political/economic commentator than comedian, especially when it suits him. His tongue is too sharp for most. What is funny about Jim Cramer? Nothing, he had him on to make a political statement.

I don't watch the guy and I don't have a problem, I just think what he is doing is being a smartass dbag and not helping the process. But NBC news with Brian Williams had a report on his show with Cramer - that's how I was aware of it.

As far as his bro - I don't know, it just smells to me - is his bro feeding him the info selectively to further his agenda? Most professionals disclose potential conflicts such as this.

O, I forgot, he is a comedian.

Last edited by Venture34; 03-27-2009 at 10:03 AM.
Old 03-27-2009, 10:00 AM
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fair enough V34. i didn't even see the interview so i probably shouldn't have commented in the first place.

but i guess my feeling about the daily show and colbert report is they are purely entertainment. do they have an agenda? absolutely! but that doesn't mean i can't laugh at it.

and every guest that appears on that show knows what they're in for...so maybe you should be asking what cramer expected to gain by being on the show?
Old 03-27-2009, 10:07 AM
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Originally Posted by happyjack92 View Post
fair enough V34. i didn't even see the interview so i probably shouldn't have commented in the first place.

but i guess my feeling about the daily show and colbert report is they are purely entertainment. do they have an agenda? absolutely! but that doesn't mean i can't laugh at it.

and every guest that appears on that show knows what they're in for...so maybe you should be asking what cramer expected to gain by being on the show?

totally agree! And what was Cramer thinking?

It's all a big mess anyway, but back to the OP, the Rolling Stone article does a decent job dissecting it. I sent it to a bunch of non-THT ers.

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