Tuesday, February 24, 2009

More (Bad) AIG News

From the Throwing Good Money After Bad Department:
As we averred when the political class began schushing down this slippery slope, "When the gummint is your reinsurer, you're pretty much bullet-proof as to claims, reserves, you name it." And thus we see the results of unfettered access to someone else's (i.e. taxpayer) money. We're already some $150 billion into the struggling, ertswhile insurance giant, with no "happy ending" in sight. In fact, the rocket surgeons in Washington are now looking at swapping "some of the debt held by the government for equity in AIG."
What part of "enough is enough" don't these people understand?
There should come a point where the market is left to correct itself (I hesitate to say "must" because, with the gummint, all bets regarding common sense are off); sometimes this correction is painful. But it's the nature of risk; that is, sometimes you lose. Based on what we've seen so far, it doesn't seem likely that another infusion of hard-earned taxpayer dollars will net a long-term positive effect.
In other words, why won't they let us cut our losses?
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