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AIG Bailout....when will I get my share? - 9/17/2008 11:59:38 AM
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rhippie
Posts: 550
Joined: 4/13/2005
From: Rich The Hippie
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So now that the Feds have bailed out another struggling business it got me to talking with some of my more liberal clients and we were all wondering the same thing:
WHEN we we get our dividend/interest checks from the latest bailout?
The Fed just "loaned" $85B to AIG at an interest rate of 11.1%.
This bailout amounts to a loan from every person in the US for approx $283 per person. At 11.1% interest I calculate that I am owed $31 per year. When can I expect the check? (Yeah I know this should be in the comedy section)
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Stand up for what's right....even if you're standing alone
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RE: AIG Bailout....when will I get my share? - 9/17/2008 12:47:02 PM
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NoShow
Posts: 454
Joined: 5/10/2005
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quote:
ORIGINAL: rhippie
So now that the Feds have bailed out another struggling business it got me to talking with some of my more liberal clients and we were all wondering the same thing:
WHEN we we get our dividend/interest checks from the latest bailout?
The Fed just "loaned" $85B to AIG at an interest rate of 11.1%.
This bailout amounts to a loan from every person in the US for approx $283 per person. At 11.1% interest I calculate that I am owed $31 per year. When can I expect the check? (Yeah I know this should be in the comedy section)
First, off the $85B is a "line", so you have to wait until they start drawing on it to earn interest.
Second the debt has a mezzanine structure, so you also own almost 80% of AIG.
Oh, and after the liquidation, there was a loss, so you need to send the government your share of the loss.
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RE: AIG Bailout....when will I get my share? - 9/17/2008 1:24:50 PM
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rhippie
Posts: 550
Joined: 4/13/2005
From: Rich The Hippie
Status: offline
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quote:
ORIGINAL: NoShow
quote:
ORIGINAL: rhippie
So now that the Feds have bailed out another struggling business it got me to talking with some of my more liberal clients and we were all wondering the same thing:
WHEN we we get our dividend/interest checks from the latest bailout?
The Fed just "loaned" $85B to AIG at an interest rate of 11.1%.
This bailout amounts to a loan from every person in the US for approx $283 per person. At 11.1% interest I calculate that I am owed $31 per year. When can I expect the check? (Yeah I know this should be in the comedy section)
First, off the $85B is a "line", so you have to wait until they start drawing on it to earn interest.
Second the debt has a mezzanine structure, so you also own almost 80% of AIG.
Oh, and after the liquidation, there was a loss, so you need to send the government your share of the loss.
So I can get dividends as well!! This is getting better and better!!!
_____________________________
Stand up for what's right....even if you're standing alone
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RE: AIG Bailout....when will I get my share? - 9/17/2008 10:45:19 PM
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blessedinnyc
Posts: 1993
Joined: 10/12/2007
Status: offline
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quote:
ORIGINAL: rhippie
So now that the Feds have bailed out another struggling business it got me to talking with some of my more liberal clients and we were all wondering the same thing:
WHEN we we get our dividend/interest checks from the latest bailout?
The Fed just "loaned" $85B to AIG at an interest rate of 11.1%.
This bailout amounts to a loan from every person in the US for approx $283 per person. At 11.1% interest I calculate that I am owed $31 per year. When can I expect the check? (Yeah I know this should be in the comedy section)
This may sound funny, but this is a loan that I wish I could have gotten in on!
According to the terms of the deal, the federal government is first in line to collect in the event of a default- in front of the shareholders, preferred stockholders, subordinated bondholders, and even senior bondholders. The deal is also backed by some pretty stable assets. Most banks are willing to give you a mortgage with 20% down at about 7%. In this case, the federal government is giving AIG a mortgage with 40% down at 11%. Finally, the federal government now also owns call options on AIG as well, giving them plenty of upside.
I would be suprised if we don't get the money back. In fact, I'm willing to buy your "interest" in that loan from you if you think it is a "subsidy". The Bear Stearns bail-out was a subsidy, this is a fixed income transaction- and one that is very favorable to the feds.
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RE: AIG Bailout....when will I get my share? - 9/18/2008 6:48:38 AM
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rlj
Posts: 2337
Joined: 4/14/2005
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Hehehe:
http://d.yimg.com/us.yimg.com/p/uc/20080918/spo080917.gif
_____________________________
-Roger
I could wile away the hours
Conferrin' with the flowers
Consultin' with the rain
And my head I'd be scratchin'
While my thoughts were busy hatchin'
If I only had a brain
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RE: AIG Bailout....when will I get my share? - 9/18/2008 2:33:04 PM
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GroupW
Posts: 2864
Joined: 11/16/2007
From: Up in the hills of Colorado (very BIG hills...)
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The scary thing to me isn't that the Feds stepped in after saying that they would not.
The scary thing is that they peeked under the hood and said "YIKES!" and decided they had to do something that they know they probably shouldn't and would just annoy the snot out of Congress.
The New York Times had a decent article on this, but it didn't tell all the story. A good start to it though. In addition to what the times said, there was a tremendous worry about the impact of an AIG failure on all the money market funds in the country that hold stuff that AIG "guaranteed", the impact of money market failures on consumer spending, wealth, and employment. That along with some $440 billion of outstanding guarantees, mostly to foreign banks which have been sending needed capital our way. I can envision the possibility of some foreign central banks exerting some pressure on the Fed to do something. Unfortunately, the way the current administration has spent money and lowered taxes has left us no choice but to listen.
I did all this for a living, but I'm still shocked at how bad it is. Here's one example: there are securities out there that you can buy that are backed by extremely sound collateral that has a less than 1% chance of defaulting. The value of that security today? Less than 20 cents on the dollar despite the fact that in order to sustain a loss on that investment you would have to see a default rate that is both a) immediate and b) higher than any default rate ever seen by a factor of 2 or 3. If the world really is ending, then this is probably about right. Otherwise, it's just rediculously cheap.
This has just gone completely and utterly stupid. As long as the market recovers from "stupid" to just "amazingly ignorant" then the AIG loan should be just fine with little or no loss to the taxpayers.
_____________________________
“For every problem, there is a solution that is simple, elegant and wrong.” -H.L. Mencken
"Most people would rather die than think; in fact, they do so." -Bertrand Russell
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RE: AIG Bailout....when will I get my share? - 9/19/2008 6:56:26 AM
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deliveredarling
Posts: 2159
Joined: 8/30/2007
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It appears that this situation seems funny to some. Hoow funny will it be when that tax bill comes knocking at your door?
You do realize that every American will be paying for these bailouts?
Let me break it down for you.
Unemployment is at it's highest.
Salaries are not increasing to meet the rise in goods and service.
WE are going to pay for the bailouts.
WE also are paying for the CEO to have received $7 million dollars to resign.
How do you like that?
Where is all this bailout money coming from?
Tax payers do not have it either.
The country does not have it, yet we continue to bailout?
Our government should not have stepped in to save the day. Theya didn't save it as a matter of a fact and they certainly are not doing us any favors.
We are headed towards a depression, worse that the Great Depression and our government is leading the way.
_____________________________
"Now no one after lighting a lamp covers it over with a container, or puts it under a bed: but he puts it on a lampstand, in order that those who come in may see the light."
Luke 8:16
http://www.myspace.com/egaip
Come visit
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RE: AIG Bailout....when will I get my share? - 9/19/2008 7:10:09 AM
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TheosCentric
Posts: 2014
Joined: 2/26/2006
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quote:
ORIGINAL: deliveredarling
We are headed towards a depression, worse that the Great Depression and our government is leading the way.
Headed?!? You mean, we're not there yet? 
_____________________________
"Missions exists because worship doesn't." -- John Piper, Let the Nations be Glad
God at the Center
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RE: AIG Bailout....when will I get my share? - 9/19/2008 7:14:32 AM
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deliveredarling
Posts: 2159
Joined: 8/30/2007
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Not just yet, but it's coming.
What totally amazes me is that many Americans could not see it coming.
I swear, we sound like a bunch of stupid sheep, bleating and repeating what the news and politicians say. " The economy is solid". Really? It's showing how solid it is now isn't it.
WAKE UP AMERICA!!!!!!!!!
_____________________________
"Now no one after lighting a lamp covers it over with a container, or puts it under a bed: but he puts it on a lampstand, in order that those who come in may see the light."
Luke 8:16
http://www.myspace.com/egaip
Come visit
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RE: AIG Bailout....when will I get my share? - 9/19/2008 10:24:08 AM
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bzirk
Posts: 2850
Joined: 4/11/2005
From: Where the deer and antelope play
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Me thinks some have mistaken sarcasm for humor.
If I'd read this thread yesterday, maybe I could have laughed at how we're taking it in the shorts. But today, man I think there is some steam coming out of my ears.
Did we go back to the days of robber barons? It surely feels like it.
Paulson: "We have to work together," translation: paying for some fat cat on Long Island or in New Jersey who basically raped the financial system.
Where's that thread on short selling? I might have a few pages to say on that now.
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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RE: AIG Bailout....when will I get my share? - 9/19/2008 12:03:53 PM
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cog41
Posts: 624
Joined: 7/16/2006
From: The Great State of Texas
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I know it has been said before but, Ron Paul was and is right about our govt. financial demise.
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Psalm 122:6 Pray for the peace of Jerusalem: "May they prosper who love you."
Hook'em Horns! Roll Tide!
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RE: AIG Bailout....when will I get my share? - 9/19/2008 12:43:22 PM
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Bettawrekonize
Posts: 1391
Joined: 4/17/2005
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quote:
ORIGINAL: Dubya
Currently the Dow is up almost 400 points at the opening this morning. Seems like the market likes what the government is doing.
If you had faith in the economy (like I do) you would have taken the drop earlier this week as a bargain hunter's opportunity and taken advantage of it. I'm sorry that I am not as depressed as many of you would like to be. Actually, I am pretty happy. 
Well, the government did ban short selling, which may have a temporary positive effect on the market. However, it may catch up with us in the long run. It seems like the govt is looking for quick short term fixes at the moment but they may not be considering the long term ramifications. I'm not exactly sure what the government is doing right now and it's hard to predict what they will do next (and what will happen in the long run).
I hope that you're not one of those people that think, "It's all in my head." Yes, gas prices are all in my head and the fact that they've been increasing in the past few years is also just my imagination. I'm sorry if I lack faith in our government, but when their response to this mess is that, "it's all in our heads" and "it's all our imaginations" when it's clearly not, it's hard to have much faith in them.
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RE: AIG Bailout....when will I get my share? - 9/19/2008 2:31:26 PM
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bzirk
Posts: 2850
Joined: 4/11/2005
From: Where the deer and antelope play
Status: offline
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Bush and company are doing what they always do with domestic issues -- mostly just reacting and rarely being proactive except to take a ham fist to the situation. I'm heartily sick of this administration. What's sad is that this may be one step further to ushering in Obama and company.
This is being said by a 30+ year registered Republican. The Republicans make me sick, but I'm not so sick I want to vote for the Democrats.
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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RE: AIG Bailout....when will I get my share? - 9/19/2008 3:44:53 PM
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uncabeeil
Posts: 5523
Joined: 4/11/2005
From: Joisey. Got a problem wit dat?
Status: offline
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I knew it had to happen sooner or later. Somebody had to blame Bush, like he makes all the laws and decisions in the country. I thought you were better than that, Lisa.
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I don't recall all of the details
But I know life is better when shared. -Jon Troast
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RE: AIG Bailout....when will I get my share? - 9/19/2008 4:05:00 PM
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ekserekseez
Posts: 693
Joined: 7/3/2008
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Another reason I just might vote for Ron Paul after all.
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RE: AIG Bailout....when will I get my share? - 9/19/2008 5:04:39 PM
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bzirk
Posts: 2850
Joined: 4/11/2005
From: Where the deer and antelope play
Status: offline
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quote:
ORIGINAL: uncabeeil
I knew it had to happen sooner or later. Somebody had to blame Bush, like he makes all the laws and decisions in the country. I thought you were better than that, Lisa.
Bill,
Don't get me wrong. There is plenty of blame to go around. The greedy (can't say what I'm thinking) who raped the system are first on the list. Man, it galls me that they're going to suffer nothing by comparison to the rest of the taxpayers. I also blame congress for not working for the good of the American people but rather participating in nothing but a power struggle for their own backsides. I also blame the mainstream media for spinning things in favor of whomever they are behind and not giving us objective reporting, so that perhaps the administration could actually communicate effectively with the American people.
What I'm upset with Bush about is that he loves to spend money. The congress didn't sign all those spending bills, the news media didn't sign them, and the fat cats on Wall St. didn't sign them. BTW, his spending is something I've complained about for years. It is my biggest beef with him, and I VOTED for the guy twice, and given the choice between him or Gore or him or Kerry, I would do it again. Unfortunately, he's got that noblesse oblige mentality he's been brought up with (Papa had it too). There's only one problem -- he's not spending his own money.
If he had not continually approved spending gobs of money over the last eight years, we might not be so affected by this mess. Man, we are in hock up to our eyeballs. I do feel like the Chinese own us. I feel that the bail outs are in great part driven by foreign investors. Bush has not helped our position in this mess, because he has led us into this bondage to our creditors. Oh, absolutely the congress was there prodding him every step of the way, but it doesn't look like he needed much prodding. How much spending has he taken a stance against?
_____________________________
may the God of hope fill you with all joy and peace in believing, so you will abound in hope by the power of the Holy Spirit. Romans 15:13
Great quote: I just ain't God and don't know it all. -- SonInMe1
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RE: AIG Bailout....when will I get my share? - 9/19/2008 5:41:35 PM
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Dubya
Posts: 1017
Joined: 10/25/2006
From: Texas
Status: offline
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I actually believe the government has made the right move in this bail out and the establishment of the fund for failed loans. The alternative would have been to allow the financial markets to crash which would have brought down not only our own economy but much of the world's economy as well. Then the "depression" the Dems keep talking up would become very real!
Much of the discussion in this forum has been about what got us into the mess. This is a good discussion to have but unfortunately a real remedy was required and instead of throwing their hands up in frustration like the Congress did, the Fed and the Treasury department acted. Their swift action relieved the foreign markets last night and had a substantial impact on our markets today.
There seems to be a lot of vitriol expressed against the heads of the failed financial institutions, which is probably justified, but allowing the entire market to crash and the economy to really fail would have hurt the poor and the working classes far worse than the well-to-do... and if the real concern is for the "little guy" then the right corrective action was taken.
There is no doubt that this bailout will have a lasting impact which will need to be addresed with other measures like reduced wasteful governement spending and increased revenues. Like I said, the alternative would have been unthinkable.
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RE: AIG Bailout....when will I get my share? - 9/19/2008 5:45:30 PM
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deliveredarling
Posts: 2159
Joined: 8/30/2007
Status: offline
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Dis anyone else here that judge (I can't remember his name now) on either CNN or Fox say that it was unconstitutional for the government to do any of these bailouts?
I thought that was interesting.....
_____________________________
"Now no one after lighting a lamp covers it over with a container, or puts it under a bed: but he puts it on a lampstand, in order that those who come in may see the light."
Luke 8:16
http://www.myspace.com/egaip
Come visit
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RE: AIG Bailout....when will I get my share? - 9/19/2008 6:12:22 PM
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Dubya
Posts: 1017
Joined: 10/25/2006
From: Texas
Status: offline
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quote:
ORIGINAL: deliveredarling
Dis anyone else here that judge (I can't remember his name now) on either CNN or Fox say that it was unconstitutional for the government to do any of these bailouts?
I thought that was interesting.....
I would be very interested to know who the judge was and what he believes to be unconsitutional.
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