Items of Interest:
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---New York Times:
Fed in an $85 Billion Rescue of an Insurer Near Failure -- Fearing a financial crisis worldwide, the Federal Reserve reversed course on Tuesday and agreed to an $85 billion bailout that would give the government control of the troubled insurance giant American International Group.
The decision, only two weeks after the Treasury took over the federally chartered mortgage finance companies Fannie Mae and Freddie Mac, is the most radical intervention in private business in the central bank’s history.
With time running out after A.I.G. failed to get a bank loan to avoid bankruptcy, Treasury Secretary Henry M. Paulson Jr. and the Fed chairman, Ben S. Bernanke, convened a meeting with House and Senate leaders on Capitol Hill about 6:30 p.m. Tuesday to explain the rescue plan...
Steven G. Brant / The Huffington Post: Capitalism Is Dead. Now What Do We Do?New York Magazine: Fed Changes Their Mind, Throws Whopping $85 Billion at AIGKyle E. Moore / Comments from Left Field: Another One Goes UnderJohn Riley / Spin Cycle: Ten for Wednesday: Sky not falling, yetJohn Cole / Balloon Juice: AIG — I wish I could tell you more about what this meant...Taylor Marsh: Morning Coffee: FDIC Fund DwindlingDavid Wessel / Real Time Economics: Fed Invokes ‘Unusual and Exigent’ Clause — AgainLos Angeles Times: Federal Reserve to rescue AIG in $85-billion finance planDownWithTyranny!: Bush Regime's Parting Gift To America: (National) SocialismTami Luhby / CNNMoney.com: Fed in AIG rescue - $85B loanAbout.com US Politics: Why The AIG Bailout Is Not Like ChryslerMark Adams / American Street: Can We Nationalize Exxon And Health Care Too?Myglesias / Matthew Yglesias: The Commanding HeightsDJK / Brave New Films blog: Obama: Republican Economic Philosophy “Has Completely Failed”Megan McArdle: Hindsight regulation … But I don't blame it on Clinton.TigerHawk: The Fed just bought AIGElrod / The Moderate Voice: Fed bails out AIG with $85 billion loanJeff Fecke / Alas, a blog: Fed Set to Nationalize AIGBuck Naked Politics: AIG's $85 Billion Bailout: See What Anti-Regulation Ideology Can Do?Dday / Hullabaloo: Congratulations, You Just Purchased An Insurance CompanyFrank Pasquale / Concurring Opinions: A Billion Here, A Billion There. . . . I appreciate Nate's effort …Donald Douglas / American Power: No Panic From Banking Crisis as McCain Momentum HoldsPaul Campos / Lawyers, Guns and Money: Masters of the Universe to the RescueAtrios / Eschaton: Loan — Fed's considering giving AIG a loan. How big I wonder?Yves Smith / naked capitalism: Fed[ Ponders] Provides $85 Billion Rescue for AIG (Update: Now Official)Mark Thoma / Economist's View: Fed Gives AIG an $85 Billion Loan in Exchange for 80% StakeMichael Shedlock / Mish's Global Economic …: Nationalization of AIG: Treasury to get 80% stake in return for $85 billionRon Beasley / Newshoggers.com: Laissez-faire leads to nationalizationBarry Ritholtz / The Big Picture: AIG Bailout: $85B in Loans, 80% AIG Taxpayer Owned
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Wall Street Journal:
U.S. Plans Rescue of AIG to Halt Crisis; Central Banks Inject Cash …
U.S. Plans Rescue of AIG to Halt Crisis; Central Banks Inject Cash …
Discussion:David Jackson / USA Today: McCain, Obama eye Wall StreetJonathan D. Glater / New York Times: A.I.G. Is Still Profitable, With a Wide Array of EnterprisesPhil Izzo / Real Time Economics: Fed's AIG Deal: Here There Be DragonsAbout.com US Politics: Taxpayers Now Own 80% Of AIG, The Nation's Largest InsurerGreg Bobrinskoy / Real Clear Politics: The Morning Report
Felix Salmon / Portfolio: Why Bail Out AIG's Bondholders?
Gordon Smith / Conglomerate: Was AIG an emergency? — In his excellent post on the (il) …
Michelle Malkin:
Mother of all bailouts: $85 billion to AIG
Discussion:Walter Alarkon / The Hill's Blog Briefing Room: RedState — The 15 Republican House members who voted …Blake Hounshell / FP Passport: Morning Brief: In for a dime, in for $85 billionAuguste / pandagon.net: Meriwhatcracy? — It's so fun to watch hardcore capitalists try …Sean Hackbarth / The American Mind: UNITED STATES TAKES OVER AIGMegan McArdle: The Fed bails out AIG
Edmund L. Andrews / International Herald Tribune:
Fed [May] Does Offer Bridge Loan To AIG
Bess Levin / Dealbreaker:Reuters: AIG rescued by Fed, Barclays buys Lehman U.S. unitDiscussion:Bill Anderson / LewRockwell.com Blog: The Big Lie Continues
Fed [May] Does Offer Bridge Loan To AIG
Discussion:Jon Kay / Centerfield: My AIG Nationalization $0,06 — This looks half-thought-out to me.
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USA Today:Reserve Primary money market fund breaks a buck -- If you want to know how severe the financial industry crisis is, here's further proof: The share price of the Reserve Primary fund, a money market mutual fund, has fallen below the sacred $1 mark, thanks to the Lehman Bros. meltdown.
Money market funds have been the fund industry's haven for more than three decades, and investors often view them the same way they do bank checking accounts. The funds' safety record has attracted more than $3.5 trillion in assets.
Until now, no money fund open to the general public has ever allowed its share price to dip below a dollar — "breaking the buck," as it's called. (A small institutional money fund, Community Bankers Money fund, broke the buck in 1994.)
Money market funds have long feared that if they broke the buck, thereby shrinking investors' principal, people would shift their money into bank money market accounts or ultrasafe Treasury securities. The question now is whether other money funds will follow the Reserve fund in dipping below $1.
The $64.8 billion fund held $785 million in short-term IOUs, called commercial paper, issued by Lehman Bros., which filed for bankruptcy protection Monday...
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- Are We Going Overboard With Bailouts? - Michael Hiltzik , LA Times
- Are We Running Out of Rescue Cash? - Holman Jenkins, Wall Street Journal
- How About a Business Failure Tax? - Jonathan Koppell, New York Times
- Treasury, Fed Act Without Clear Principles - Editorial, New York Sun
- Wall Street's Unraveling - Robert Samuelson, Newsweek
- Can Wall Street Re-Invent Itself Again? - Steve Malanga, RealClearMarkets
- The Rise and Fall of Super-Finance - David Freud, Daily Telegraph
- Why Hedge Funds Survive Banking Meltdown - Chris Dillow, Times/London
- First Men, Then Rules Can Rescue Wall Street - Amity Shlaes, Bloomberg
- A Cool Look at the Future - Richard Rahn, Washington Times
- Free Trade Saves the Day - C. Fred Bergsten, Washington Post
- What Wall Street Will Look Like - Steven Rattner, Wall Street Journal
- Who Replaces AIG on the Dow? How About The Fed? - Crossing Wall Street
- AIG's Saving Begs What the 'Rules' Are - Doug McIntyre, 24/7 Wall Street
- What Should Government Guarantee? - Arnold Kling, EconLog
- Gov't Stands To Make a Lot of Money Off of AIG - F. Salmon, Market Movers
- Does The Fed Have The Authority To Lend To AIG? - Global Trend Analysis
- Investment Banking 2.0: Into The Future - Information Arbitrage
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