Posts Tagged ‘Financial meltdown’

Depressing but important article on AIG

February 28, 2009

Of all the financial debacles of September 2008, the most infuriating has to be AIG.  One, because as an insurance company it was suppose to be in the business of providing stability for the risk-laden world of financial wheeling and dealing but instead it destroyed that stability and two because its the the debt that keeps on giving.   Taxpayers have spent $150 billion already on this monster and there is talk that we will spend another $100 billion more before the company stabilizes.

Worse, as Joe Nocera explains in his great column about AIG, the government is propping up the insurer’s bad lending practice because if it doesn’t, it risks destroying the fragile modicum of stability in the financial markets.

Article

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Another failed bank

December 5, 2008

The 4th bank failure in Georgia this year.

Failed bank list

Countrywide sued for $8.4 billion

December 4, 2008

A complicated deal cut by the Attorney Generals of 15 states required Countrywide to reduce payments on thousands of mortgages to the tune of more than $8 billion.  However, Countrywide isn’t on the hook for that amount because they sold their interests to various trust.  This forces those trusts to suffer the depreciated value of these debts even though it was Countrywide that had engaged in the predatory lending.  Now the trusts want Countrywide to make up the $8 billion difference that they agreed to write down. 

Remember, Bank of America bought Countrywide and that stock went up today.  I guess the stock market isn’t too worried.  At least not today…

Complaint courtesy Courthousenews

171 banks on “Problem List”

November 26, 2008

“The government identifies problem banks as institutions on the brink of failure, facing severe financing difficulties and management issues. ”

Article

General Motors:Using SEC filing to beg

November 13, 2008
Hummer anyone?  Keys are in the ignition

Hummer anyone? Keys are in the ignition

Here is what GM say in its most recent 10-Q: (thanks footnoted.org)

“We do not believe it is likely that these adverse economic conditions, and their effect on the automotive industry, will improve significantly in the near term, notwithstanding the unprecedented intervention by the U.S. and other governments in the global banking and financial systems.”

More $$$ please!

Graph that Sums Up Crisis

October 27, 2008

Click Here:

It shows the growth of derivatives both in general and in comparison to the capital to back it up.  You won’t be surprised to learn that the capital did not grow while derivatives grew from less than $100 billion in 1992 to $1.8 trillion in 2008.   My guess is that false growth also fueled real growth; spending on consumables, college education, homes etc.  And all that real growth was therefore false too.  Before we can move forward all of that debt fueled false growth has to be excised from the economy.  Not fun.