The AIG bailout is the latest in a series of bailouts and loans for the financial and housing industry in USA. Last counted, the total tab for the US government rescues and special loan facilities this year amounting to a staggering US$900 billion.
In many respects, the current situation is reminiscent of the Savings and Loan industry implosion that lead the elimination of S&L financial system in 1980’s. The S&L debacles cost US tax payers close to US500 billion with much of the government debt issued by Resolution Funding Corp. and almost took 20 plus years to retire the funding.
The bailout certainly provokes much political debate, especially in an election year. The AIG debacle caught the republican president aspirant John McCain in a bad light. His flip flop position on AIG bailout can be seen similar to our flip-flip PM. Way to go...Malaysia...we are not only exporter of palm oil, timber, electronic goods and etc but also our leadership management style.....
This is what John McCain was quoted on 16th September and 17th September.
1/ John McCain, speaking on September 16 to NBC’s Matt Lauer, as reported by ABC’s Ron Claiborne:
“No, I do not believe that the American taxpayer should be on the hook for AIG and I’m glad that the Secretary Paulson has apparently taken the same line.”
NBC’s Matt Lauer pressed McCain: “So, if we get to the point, in the middle of the week when AIG might have to file for bankruptcy, they’re on their own?”
McCain replied, “Well, they’re on their own. We cannot have the taxpayers bail out AIG or anybody else, this is something that we’re going to have to work through.”
2/ John McCain, speaking 17th September to ABC’s Robin Roberts:
I didn’t want to do that. And I don’t think anybody I know wanted to do that. But there are literally millions of people whose retirement, whose investment, whose insurance were at risk here.
In an attempt to right what is wrong what he said on the 16th, he did said on the 17th;
“The focus of any such action should be to protect the millions of Americans who hold insurance policies, retirement plans and other accounts with AIG. We must not bailout the management and speculators who created this mess. They had months of warnings following the Bear Stearns debacle, and they failed to act.”
I guess he is not paying any attention to the situation. The bailout has nothing to do with insurance policies, retirement plans AIG’s insurance and retirement plans are run through AIG subsidiaries, which everyone agree are in better capitalised position and in which case of the insurance operations, they are governed by strict regulation. So folks have no worry about AIG’s Malaysian subsidiary. The bank Negara have been monitoring as stipulated in the Insurance Act.
As for loyal supporter of Manchester United…also don’t be too worry. In 2006, AIG agreed to pay $100 million to have their company letters adorned upon the front of ManU's jerseys for the next four seasons.
So, given the developments of the bailout, that ManU's jerseys should be changed to read "US Taxpayers".
For the fip-flop, see both of you (McCain losing the president race to Obama and our PM booted out) by Xmas at Mamak Teh Tarik stall reminiscing.
