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Author: Subject: Major insurance company on verge of going bankrupt

Zen Peach





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  posted on 10/2/2008 at 10:03 AM
http://abcnews.go.com/Politics/PersonalFinance/story?id=5926400&page=1

 

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Zen Peach



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  posted on 10/2/2008 at 11:25 AM
I feel this bailout is going to make certain all the guys at the top are taken care of and the rest of us are in some deep....well, it's deep. When economists are warning the bailout might not work then we'd better listen. American is about to pay 700 billion to get royally screwed!

 

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Zen Peach



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  posted on 10/2/2008 at 11:57 AM
Interesting that they do not name the insurance company.

 

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Peach Master



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  posted on 10/2/2008 at 12:08 PM
From the article referenced:

quote:
Senate Majority Leader Harry Reid, D-Nev., pressed for passage, with the alarming news that one of the country's premier insurance companies was about to go bankrupt if the crisis was not quickly resolved.
"We don't have a lot of leeway on time," Reid told reporters in the Capitol. "One of the individuals in the caucus today talked about a major insurance company -- a major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about."
He did not identify the insurance company, and later in the day Reid spokesman Jim Manley said the senator was speaking broadly and not referring to anything specific.
"Senator Reid is not personally aware of any particular company being on the verge of bankruptcy," Manley wrote in an e-mail to ABCNews.com. "Rather, his comments were meant to refer to the conditions in the financial sector generally. He regrets any confusion his comments may have caused."


Now, doesn’t that just give you a nice warm fuzzy feeling when the Senate majority leader pulls this incredible dose of fear that a “major insurance company-- one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about."
Then later we get this:
"Senator Reid is not personally aware of any particular company being on the verge of bankruptcy," Manley wrote in an e-mail to ABCNews.com. "Rather, his comments were meant to refer to the conditions in the financial sector generally. He regrets any confusion his comments may have caused."

So whip it up Harry. The insurance company with a name that everybody knows apparently isn’t aware they’re in the trouble you describe. But all taxpayers better whip out their wallets based on this ambiguous panic that we’re being fed.
My main concern is that this is a tremendously serious issue and every politician seems to be using it as a political football. We’re going to need to do this so lay it out, cut the pork and earmarks, make every part of this bill transparent, establish solid accountability for every penny and find someone intelligent enough to make the case to the public before trying to shove your hands into our wallets.

*note* This is not an indictment of Senator Reid. They are all playing the same game.

 

Zen Peach



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  posted on 10/2/2008 at 12:12 PM
quote:
Interesting that they do not name the insurance company.

 

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Zen Peach



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  posted on 10/2/2008 at 12:33 PM
Hope it's not AIG. I have my term life insurance with them.

 

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Zen Peach



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  posted on 10/2/2008 at 12:39 PM
quote:
Hope it's not AIG. I have my term life insurance with them.


I would bet that even if that happened, something would be worked out to let you transfer your term policy to a new company. That is really the only thing to worry about.

 

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Zen Peach



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  posted on 10/2/2008 at 12:46 PM
quote:
Hope it's not AIG. I have my term life insurance with them.
AIG was given bailout by US government a couple of weeks ago and Fed is now majority owner here. The above article is maddening in it's reference to 'major corporation everyone knows' ... if this is true, let's get the name and nature of the situation out there instead of issuing another call to panic.

 

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Zen Peach



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  posted on 10/2/2008 at 01:02 PM
In searching around AIG looks to be the one with all eyes on it. Looks like the deal Deb talked about would put AIG responsible for the 85 billion.

quote:

Could a company receiving an $85 billion loan from the government still go bankrupt? Maybe so, and thereby hangs an increasingly odd tale.

The Federal Reserve Bank of New York agreed to provide a revolving credit facility and take 80% of AIG's equity on September 16. But apparently the Fed didn't realize that other organizations will now pass judgment on this deal.

There's also downside for taxpayers, because the bizarre structure of this deal encourages the company to put them on the hook for all $85 billion. AIG would have to pay 10.5% this year on the full $85 billion, even if the company didn't borrow a nickel. Taking the money only increases the rate to about 14%. Naturally, the company has already borrowed more than half of the available taxpayer funds.

 

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Zen Peach



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  posted on 10/2/2008 at 01:17 PM
I don't know how any insurance company could be going bankrupt, unless it was purely through mismanagement. Or if they spent all their money on lawyers, trying to avoid paying claims.

Harry Reid is an embarrassment.

 

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