ftalphaville.com
AIG discloses counterparties
- Thread starter ASusilovic
- Start date
ftalphaville.com
really? forced them? I wonder, did those poor, blatantly extorted banks then re-patriate the profits from the boom times to Europe?
I guess now I feel better about having my taxes go up so we can send them $$$.
Analogously, I think whoever it was that sold me my long fertilizer positions should send me some relief because I decided to hold through the steep drop last year (never mind that I was tickled pink about making 50% up until they tanked).
Look, I'm not defending any banksters here.
All I am saying is... If ING comes to the US and rounds up 100 billion USD in savings, the US tells ING: You have to put 25% of those savings in X.
Now, it turns out, X was a sham.
Nevertheless, someone has to pay for it.
And so they do.
The Dutch people for instance, have taken over the risks on the liar loans from ING at the tune of 30 billion USD.
For a country of 15 million people that's not an inexpensive bailout I would think.
Why should they have to pay if Americans can't pay their morgages anymore?
Just saying...
'They' are sticking it to the taxpayer everywhere not just in the US alone.
My above post aside, if $22B of the funds went to post increased collateral requirements against open positions, what are you going to do? Allow them to default? Who the counterparty is doesn't really make any difference if it's a matter of bailing out the institution. Without the collateral posting (and btw I highly doubt that euro banks would have folded without the measly few billions that AIG posted to them individually) the couterparties could have sued AIG and potentially shut down all their businesses. Some of thse businesses are actually worth saving.
Also, allowing a US entity to default on it's margin obligations would likely raise the costs for all US market participants to do business on margin. I suppose right now it's analogous to bailing your kids out of stupid credit card decisions in order to save the family name.
Also, it may be moot, since if there is no credit event all of the collateral will come back to AIG as either the MTM position improves or the swaps approach the end of their term and theta takes over. To conitinue with my kids & credit cards analogy, it becomes more like lending them money to make the payments just for the time while they go and return all the stupid shit they bought.
If, however, all the CDS's they're having to post collateral on (and I'm assuming it's CDS's) are all for the sovereign debts of countries like Latvia & Iceland it may prove to be a loss, depending on the timing of those countries officially blowing up and the expiration of the swaps.
^ This actually brings up an interesting point: If some banks have sizabe long CDS positions, could they somehow force those countries to their knees (massively shorting their currency maybe) early, to coincide with their CDS positions? I bet some bank players have pure spec CDS positions on...
Also, allowing a US entity to default on it's margin obligations would likely raise the costs for all US market participants to do business on margin. I suppose right now it's analogous to bailing your kids out of stupid credit card decisions in order to save the family name.
Also, it may be moot, since if there is no credit event all of the collateral will come back to AIG as either the MTM position improves or the swaps approach the end of their term and theta takes over. To conitinue with my kids & credit cards analogy, it becomes more like lending them money to make the payments just for the time while they go and return all the stupid shit they bought.
If, however, all the CDS's they're having to post collateral on (and I'm assuming it's CDS's) are all for the sovereign debts of countries like Latvia & Iceland it may prove to be a loss, depending on the timing of those countries officially blowing up and the expiration of the swaps.
^ This actually brings up an interesting point: If some banks have sizabe long CDS positions, could they somehow force those countries to their knees (massively shorting their currency maybe) early, to coincide with their CDS positions? I bet some bank players have pure spec CDS positions on...
According to Dutch press articles around the ING bailout by the Dutch people banks are forced by US law to redirect a certain percentage of their savings into the housing market.
I stand corrected if this is false ofcourse and will be happy to be educated on the truth in this matter.
Cheers.
I'm down with what you're saying. If we were sending "care package" type money to help the banks I'd be pretty disappointed. It appears actually that they're posting collateral on worsening MtM positions, not giving bank wellfare to euro banks with our tax $.
had it turned out to be bank welfare: they (the Dutch) should pay because their banks chose to buy the CDO's without understanding them. they benefited from the upside, and now the downside. If they want to sure the rating agencies, fine. when i lend money and it deosn't come back, it's my fault. I'll exhaust all avenues to get it back, but in the end it's my fault.
wait, what is "Maiden Lane III" ????