Bailoutapalooza: I think we're communists now

After initially signaling that no bailouts were on the table the Fed decided against it last night and decided that it was willing to put up $85 billion in loans to AIG. Excuse me I wrote that wrong, I meant fucking eighty fucking five fucking billion goddamn dollars. In exchange the Fed gets to own 80% of AIG's worthless shit and Manchester United has to put a picture of Ben Bernanke swimming in a pile of money on the front of their jerseys. That was a soccer joke. I'm sorry, it'll never happen again.

So we basically own and run AIG now. That along with Fannie Mae and Freddie Mac. And whatever company goes tits up next week when no private sector entity wants to put up cash for it. That should be the telling key. If this is such a good idea why wouldn't some mega bank or other such entity step in and 'rescue' it? Don't they want all the valuable shit we're getting? Don't they want a clear crack at this brilliant moneymaking opportunity? So now the Feddy Gov runs three major financial entities. Isn't state control of financial entities communism? Or do we not run enough? Are we only partial communists? Should I cancel the red ensemble I picked out?

The best part of the article, other than finding out AIG was a "provider of esoteric financial insurance contracts", was this description of what would happen if AIG went under.

It meant A.I.G. was potentially on the hook for billions of dollars’ worth of risky securities that were once considered safe.

If A.I.G. had collapsed — and been unable to pay all of its insurance claims — institutional investors around the world would have been instantly forced to reappraise the value of those securities, and that in turn would have reduced their own capital and the value of their own debt.

That's right, if AIG went under other companies might have had to re-evaluate the worth of the securities to their actual value, not their imagined, theoretical value. So AIG must be propped up by the taxpayer lest reality invade financial markets.

But what about all the other bad debt out there? Fear not, dear reader, there are rumblings under way about the creation of a new federal agency tasked with buying bad debt and disposing of mortgage related assets. That's right, the taxpayers get put on the hook for billions of dollars worth of worthless assets. The way the free market intended.

So remember, while we can spend all the taxpayer money we want buying up worthless shit at high prices and nationalizing private institutions to bail out the private sector, nationalizing health care or anything that would provide better care or safety for you is socialism and thus can never be attempted. The free market will take care of it. Like it always does. Remember that when the government buys Washington Mutual next week for a $100 billion.