Jim Rogers: Let AIG Go Bankrupt, Not America

last SG · 2009-03-03T22:23:34+00:00

Unless of course they print US$ to pay the 9.6 trillion dollars... sure American tax payers pay but so does the rest of the world, considering how big the e...

AndrewPKYap SG

At the rate the US is printing money, I think the greenback is gonna become worthless soon. It doesn't matter if they print 30billion more to give to AIG, its gonna kill the value of USD anyway. Might as well don't bother with the printing process, just give a piece of paper that says $30 Billion, signed OBAMA, and stamp "FED" on it. Save the trees man.

I wonder how long more will China put up with this and stop buying US Debts.

China stops buying US treasuries?... it is not something that China can afford to do.... nobody (at least nobody worth mentioning) accepts Chinese Yuan in international trade. They need US dollars to trade.

If US dollars fall too far, then it would become cheaper to produce in the US then in China. Already, the US economy is getting cheaper by the day because of deflation there.

So basically check mate.

Ice Dive SG

If US dollars fall too far, then it would become cheaper to produce in the US then in China. Already, the US economy is getting cheaper by the day because of deflation there.

So basically check mate.

Sir ....... For your information , both China and Jap bought a lot of the US T-bills ... (when I say a lot ... its in billions )

This is one of the reasons why china will want to keep their currency low ......

If the T Bills matures or even sold before maturity, even when they are initially bought at a discount, it will be translated to losses when china currency inflates ....... Pure maths and calculation.

*Selling T bills before maturity means giving a lower discount .

* ( Even though I am half sick now , I think my logic should be correct. But do correct me if I am wrong .) I did a study on T bills long ago and cannot rem totally.

Shotgun SG

Sir ....... For your information , both China and Jap bought a lot of the US T-bills ... (when I say a lot ... its in billions )

This is one of the reasons why china will want to keep their currency low ......

*Selling T bills before maturity means giving a lower discount .

* ( Even though I am half sick now , I think my logic should be correct. But do correct me if I am wrong .) I did a study on T bills long ago and cannot rem totally.

T Bills or T Bonds?

xtreyier SG

Imagine if AIG collapsed.

1How many hundreds of million of people with policies would be directly affected by having their policies terminated and money absolutely gone?

2.How many insurance agents and staff would become jobless?

Perhaps Jim Rogers was correct? Is it worth saving AIG, compared to the billion other companies and people who could make better use of bail out funds?

AIG's funds are actually depositors money from which it is used to play the stock markets and derivaties in order to pay off the high interests and returns for policies bought.

The stock market is close to dead. AIG's invested policy holder's fund may now be close to nothing. Which was why it need taxpayers' bailout fund, to pay off policies holders whose insurance policy had matured.

Think of the hundreds of millions who bought policies. Would the bailout funds be enough to pay off even the annual obligations of matured policies?

At least banks don't have maturity dates on deposits, and even if they do, are generally smaller in interest returns than AIG or insurance companies.

Saving banks is ok. There are hardly bank runs. But AIG is not a bank. It is worse. It has to automatically pay out on its maturity of policies or accidents. Can US taxpayer continue on paying indefinately? Or tell AIG customers sorry, the way they had told Lehman Brothers' customers sorry?

I'm with Jim Rogers on this.

Ice Dive SG

T Bills or T Bonds?

I am refering to coupons ... so its T Bills ..

In in the nutshell, my point is that its not in china favour for yuan to appreciate against USD but not for the reason Mr Andrew said as that is a unlikely possibility.

(* Got to rest *)

tai gok nang SG

Jim Rogers is right and I agree with him BUT it is too late for the U.S. Government to stop bailing this insurer out halfway. Remember that they have injected over $100,000,000,000 into that company so far. Giving up on AIG means that $100,000,000,000 will be immediately wiped out. What could Obama explain to the American people? A more severe crisis of confidence will follow and chaos will spread even further.

A government's action cannot be half-hearted!

stupidissmart SG

Tis is my hypothesis

If AIG goes bankrupt, it do not have to pay any of its liability because it can't.

If government does not save AIG, it goes bankrupt, then a lot of cars in USA cannot be used because it is driving without insurance. In fact I heard tat a lot of airline paid AIG money to insured their flights from accidents. If AIG collapse, perhaps US airline also become grounded because it is flying without insurance. Now a lot of people in USA, like america, bought life savings plan for their retirement. They give a few hundred for their whole lives for their retirement. If suddenly AIG goes, they will become like the Lehman brother bond buyers in singapore. They lost everything.

Insurance had become too embedded into our daily lives. No one ever thought tat insurance company need to be insured themselves. No one really know wat to do if such a big insurance company fail

So if AIG is left to die, perhaps the whole USA is already in another great depression

stupidissmart SG

double

Gensis SG

Tis is my hypothesis

If AIG goes bankrupt, it do not have to pay any of its liability because it can't.

Insurance had become too embedded into our daily lives. No one ever thought tat insurance company need to be insured themselves. No one really know wat to do if such a big insurance company fail

So if AIG is left to die, perhaps the whole USA is already in another great depression

So duh and dumb

AIG collapse means US citizens or the airline cannot change insurance company meh?

stupidissmart SG

Can change. The prices may increase due to lesser competitior, a lot of people who pay insurance for the whole year canot get back the remainder amount, they need a few days for administration to register for a new company etc. The scale of the changes is very big on society. Furthermore, u r sure there r always some companies tat provide all the services from the biggest insurer of the world ? U sure for airlines there r many companies to choose from ?

Gensis SG

So you think the scale on society by bailing out AIG smaller ah?

For airlines, don't need many companies to choose from. Just one other will do. Duh.

stupidissmart SG

It is considered to be too big to fail. Imagine the millions of people who had put the money into the insurance and get nothing out. Imagine if u crash your car today and realise no insurance is paying your repair. Imagine some hit a person with a car and no one pay tis poor victim. Or imagine someone who discover he had cancer and his insurance comapny bankrupt at the same time. There r many cases of insurance in everybody's life. The effect can be felt by the common people

It is not tat simple. I must be frank to u I know little about airline insurance. If the airplane flies and crashed tat day, wat is gonna happen ? And do u think insurance for a company airline with many flights and liability and various payout be discussed within a day ?

Gensis SG

yawns

no wonder you can only call it hypothesis. All imaginary scenarios only.

Lehmann Brothers was allowed to go bankrupt, causing millions (or probably billions) lost. You can also go imagine up a lot of scenarios on how many will get affected as well.

maxtor SG

time to invest more in this blue chip?

I mean how much lower can it go?

if i assume its wise to buy it for the LONG TERM, then, should buy even more now.

u r right, Citi's stock price cannot go any lower. but u also have to remember that the equity u invest is subject to dilution, plus the fact that there is no guarantee the stock price will recover in the near time future, so u also have to factor in the opportunity cost of your funds during this period of time.

also, if in the event citi is nationalised ( = US govt take over), u will also lose all the money you have invested.

that, together with the company's debts and liabilities, is the reason why citi's price is so low right now.

AndrewPKYap SG

also, if in the event citi is nationalised ( = US govt take over), u will also lose all the money you have invested.

that, together with the company's debts and liabilities, is the reason why citi's price is so low right now.

Any reason why it cannot go to 5 cents?

maxtor SG

Sir ....... For your information , both China and Jap bought a lot of the US T-bills ... (when I say a lot ... its in billions )

This is one of the reasons why china will want to keep their currency low ......

*Selling T bills before maturity means giving a lower discount .

* ( Even though I am half sick now , I think my logic should be correct. But do correct me if I am wrong .) I did a study on T bills long ago and cannot rem totally.

i don't quite agree.

one of the factors governing the price of a T-bill or any plain vanilla fixed income instrument is the promised yield attached to the bond. assuming that china purchased their bonds over the past few years, they could very well offload their bonds now at a premium rather than at a discount, simply because of current interest rates.

and i'm under the impression that china keeps its currency low because of its export status, especially to the US.

maxtor SG

Any reason why it cannot go to 5 cents?

i think you have taken my statement out of context. i meant that there isn't much lower to go from $1.20 when i said, '' Citi's stock price cannot go any lower.''

maxtor SG

A government's action cannot be half-hearted!

Does it make sense to throw good money after bad into an entity who is technically bankrupt?

Why not just do the easier thing and nationalise AIG?

AndrewPKYap SG

i don't quite agree.

and i'm under the impression that china keeps its currency low because of its export status, especially to the US.

It is generally accepted that, like you said "china keeps its currency low because of its export status, especially to the US."

maxtor SG

It is generally accepted that, like you said "china keeps its currency low because of its export status, especially to the US."

might there be other reasons ?

« Previous Page Next Page »