Yesterday was a very interesting night. US stock market rebounded from earlier loss to finished at up more than 1%. That's a reason for that: US Federal Reserve finally did the right thing after 1 year of miserable year from last September's first rate cut to September this year when they bailout those mortgages giant.
The market like Fed decision to keep the key rate unchanged at 2% as that's the right thing to do and everybody knows it. However just when we thought FED make the right call, they blow us out with yet another hilarious and stupid decision: America International Group (NYSE:AIG), America largest insurer will be bail out over by Federal Reserve for 85 Billion Dollar. The Federal Reserve will provide a two-year loan, take 79.9 percent of the New York-based company's stock and replace its management because ``a disorderly failure of AIG could add to already significant levels of financial market fragility,'' according to a statement by the central bank late yesterday.
So after Bear Stearns, Indymac, Freddie Mac, Fannie Mae, AIG is next.
85 Billion dollar may seem like well spend because "this insurance company is too huge to collapse!" However, 85 billion dollar is really a lot and will go to hell forever.
How many families can 85 billion dollar save? How many bridges can 85 billion dollar built? How many school can be built with 85 billion dollar? How many poor child can be saved with 85 billion dollar? How many AIDS, Malaria, Bird Flu and cancer patient can be save with 85 billion dollar? How many house destroyed by Gustav and Ike can be rebuilt with 85 billion dollar? How many subsidy and jobless claim can be give away to jobless and poor American with 85 billion dollar? How many scholarship can be given to student with academic excellency?
Yet the US government choose to spend 85 Billion US Dollar to save a insurance company, to save those wealthy and arrogant man that owned the company so that the rich can remain rich and poor remain poor. The US government some how choose to back these small group of rich people back and ignore the large amount of poor people that suffer for their life.
You may say AIG have to be saved. Why? What happen if they are left to die?
AIG is a giant company, they have world of money and they run one of the most profitable business in this world, insurance business. They make wrong decisions, they invest they money unwisely got loss huge amount of money, they choose the risky investment and got their hand burned and yet US government saved this bad company from bankrupt. SO NEXT TIME IF I MAKE THE WRONG INVESTMENT LOSE MY MONEY, WILL FED PAY OFF MY LOSSES?
Even if AIG is left to die, those rich people will become like you and me, the average Joe, and we are happy to live like an average Joe. But somehow Fed think those rich people can't be average Joe because they just can't. They are destined to sit their fat ass on the Ferrari and live like a king while we are on our own.
So, if you are a American, like Don Harrold like to say you should get out of debt fast. Don't put your next on the chopping block of these financial company cos they will kill you nastier than the Leatherface. Even if you are not American, get away from USA. After all the US economy is controlled by the Bernanke-Paulson Coalition!!!!!
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