AIG sold credit default swaps they did not have the money to repay to all of those who purchased them.\u00a0 A credit default swap is basically investment insurance that can be bought by any savvy investor who does not even need to own the underlying security or credit instrument it is insuring.\u00a0 So for the buyer it’s betting that a certain loan instrument or security will default and the owner of the CDS will get a payout.\u00a0 AIG sold them to almost any investor as they backed speculative hedge funds.\u00a0 For AIG it’s gambling that mortgage backed securities would not fail and they would reap the rewards of credit default swap payments for years to come.<\/p>\n
Then the foreclosure crisis emerged. \u00a0 Bearers of credit default swaps came to AIG to collect their insurance (or spread) on the defaulted loan instruments.\u00a0 Most of these collectors did not even have a stake or vested interest in the failed instrument they were collecting on because they were buying through specualtive hedge funds.\u00a0 AIG went bust.\u00a0 They can’t pay out on all of the default swaps.\u00a0 Hell, they couldn’t even pay out the spread on securities deamed least likely to default.\u00a0 Whoever will save failed AIG from their stupid mistake spurred by greed?<\/p>\n
Enter Henry Paulson.\u00a0 “Don’t worry”, he says “We’ll use the tax payers money”.\u00a0 And summarily hands AIG over $130 billion dollars.\u00a0 Ah the luxury of being a financial institution in America.\u00a0 You can get so big through moral and financial negligence that when it comes time to pay up you can put a political crony in your pocket and use tax payer dollars for decades to come to keep your employees happy.<\/p>\n
What a damned scam.\u00a0 And the real problem is most Americans don’t understand one bit of this even as it’s spelled out in this post.\u00a0 All they hear is their “trusted” politicians telling them they are working to make everything alright.\u00a0 As far as I’m concerned Henry Paulson is the most corrupt human to ever walk the face of the earth.\u00a0 He professes his concern for the economy while his only real objective is saving banks through hard times and wealthy investors.\u00a0 The rest of us be damned.<\/p>\n
Henry Paulson will be one of the greatest skid marks in the Bush administration legacy.\u00a0 Possibly even greater than Iraq.\u00a0 He is a man who cares nothing about creating jobs (oh yes Henry, please tell us more about how giving billions to banks helps create jobs) and feels the road to our economic salvation is for banks to start lending?\u00a0 Is that really what we need Mr. Asshat?\u00a0 More consumer debt?\u00a0 I thought that’s exactly what got us hear in the first place.<\/p>\n
WE DON”T NEED MORE CONSUMER DEBT.\u00a0 We need an increase in wages and job creation, through realistic means, so that people can pay the debts they already have.\u00a0 Until this fundamental fact is addressed this economy will struggle until death.\u00a0 This is not a rainy day we’re heading into.\u00a0 Through his continued misuse of tax payer dollars and the manipulation of Congress, Henry Paulson and his political cronies are driving us into a class 5 fire tornado full of dead cats and razor blades.\u00a0 We’re all going down.\u00a0 How well do you bounce?<\/p>\n","protected":false},"excerpt":{"rendered":"
AIG sold credit default swaps they did not have the money to repay to all of those who purchased them.\u00a0 A credit default swap is basically investment insurance that can be bought by any savvy investor who does not even need to own the underlying security or credit instrument it is insuring.\u00a0 So for the … Continue reading AIG stole our money with the help of Congress and Henry Paulson.<\/span>