Tuesday, September 16, 2008

Fed Close to Deal to Give A.I.G. $85 Billion Loan

Fed Close to Deal to Give A.I.G. $85 Billion Loan - NYTimes.com:
In an extraordinary turn, the Federal Reserve was close to a deal Tuesday night to take a nearly 80 percent stake in the troubled giant insurance company, the American International Group, in exchange for an $85 billion loan, according to people briefed on the negotiations.

In return, the Fed will receive warrants, which give it an ownership stake. All of A.I.G.’s assets will be pledged to secure the loan, these people said.
Help me out here: What do the words "Free Market" mean? Why won't every exec of a extremely large company write stupid insurance (I'm looking at you Greenberg) collect the dough, and then let the taxpayers clean it up?

We have truly socialized the losses. Welcome to the ownership society.

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