Will AIG Implosion 2.0 Lead To QE 3.0?

Tyler Durden's picture

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camoes's picture

Crashing the Market by AIG, Volume 2

StychoKiller's picture

Who is Joe Cassano?  The name looks familiar...

the mad hatter's picture

also by AIG:

"The Dummie's Guide to taking the Economy hostage and raping the taxpayer"

kindle and ebook versions coming soon

Monkey Craig's picture

i bet they hive off Chartis and it will be owned by Fed and Treasury (i.e. taxpayers)

trav7777's picture

you could, um, read that 1st link and see that what you say isn't even remotely accurate

TruthInSunshine's picture

I was going to edit it.

These damn bloggers twist everything. I should have read the whole article first.


HOWEVER, this is ominous, AFAIAC:

"Chinese exporters want their money in the local currency, which is regarded as more stable compared to the US dollar. They are also in a position to have their way because Indian buyers do not have an alternative source of low-cost goods, sources said."

asdasmos's picture

What about this exchange on CNBC today? (Feb 25th 2011)


 - http://www.youtube.com/watch?v=5WC9CpdeHF8

or if you prefer the cnbc link.....

 - http://www.cnbc.com/id/15840232/?video=1817702861&play=1


Damon Vickers, Nine Points Capital Management founder talks about QE2 and why he thinks bernanke is buying up the US debt.


IMO, the best part:


Carl:We issued ahh....30 billion in 7 year notes this morning and yields are down. I mean the vigilantes, we always say, if they are so worried, why are they hiding?

Damon: Who did we issue those to?

Car:      Whoever bought them.  I mean the point is supply came online and it was absorbed....

Damon: Who was that?

Carl:       .....in a week where risk was off.

Damon: Who bought those bonds?

Lady:   Who did buy it? Was it all the Fed? You think nobody bought?

Damon: Who bought those bonds?

Carl:    Could have been the Fed, could have been the Chinese, Japanese.

Damon: I dont think so. I don't think sales are taking place. Thats why QE2 Exists. They are issuing debt and printing paper and printing money because there is not the absorbtive capacity of the world to absorb the debt, and thats where we are.


Buck Johnson's picture

I saw the clip and Carl didn't really have an answer (he knew but didn't want to say).  Damon had a point and I agree with him, ask yourself this.  What country or countries have the ability every week to buy our treasuries or munis to the tune of bilions of dollars if not tens of billions of dollars?  If they have that much capacity of cash, why don't they use it to buy things and companies in the world and in the US instead of giving it to us for a paultry interest rate.  Why not use part or all the money in their own country to prop up their state finances and such, instead of buying our treasuries and muni's at a paultry interest rate.  They aren't buying these, it's the fed and the sick thing is that everybody in the US market and financial media knows it, but they have a vested interest to keep it going.  It's the conspiracy of silence, these "individuals" who right books and blogs and even are on CNBC that make these statements aren't just pulling stuff out of the air.  They have contacts and are able to process and look for the data that would point to that conclusion.  When you subtract everything out the only thing that it can possibly be is the US printing money to buy treasuries, in essence monetizing their debt.

I think that many of the first world countries would love to repudiate their debt, but they are afraid.  Afraid of the bankers and afraid of the unknown.  They know that the bankers even getting a wiff of this would do everything they can to stop it, including sinking said countries economy in order to loot it later (moving up the time table).  Then afraid of the unknown, what Damon didn't say was that doing this could change the power structure and dynamic of the world.  It wouldn't be US centric and you can bet your bottom dollar that whatever currency that will be the reserve currency will be at best will be fair at worse more leaning to the resource rich areas of the world.

OMG's picture

Spot On! are you the same BJ that used to post on RS?

topcallingtroll's picture

yeah there was 400 billion total in rmb exchanges last year.  How large is the dollar currency market? twenty trillion, 40 trillion?

I'm not too worried just yet.

Saxxon's picture

The first part is correct.

bunkermeatheadprogeny's picture

Fucking QE's, Fucking TARP, Fucking Fed.

All these bailouts denied me the satisfaction of hearing that executives started blowing their brains out in their corvettes like Enron.

Dr. Porkchop's picture

Come now, how could they have seen this coming? It's like you expect CFOs and CEOs to know anything about the stuff they sign off on.



smlbizman's picture

think of the bernank...

think of a circus...

think of sticks with spinning plates...

think of ben running back and forth spinning plates...

now think of how this act always end....



I think I need to buy a gun's picture

The sheeple fight over dollars and protests and where is Joe Cassano? england, island, australia?  Amazing.....

Milestones's picture

Like I said months ago--this isn't a casino, what we are looking at is a Carny runway. Step right up and win yourself a panda Bear little lady!!!     Milestones 

Xkwisetly Paneful's picture

Chartis is woefully underfunded too. Their claims are alway's worse than expected.

Salesman can't move Sun life policies either in light of the bailout.


Without Berkowitz this POS would be trading for half what it is now.

Misean's picture

So, AIG isn't a Phoenix rising from the ashes, but an Icarus? Or is it an iverse-phoenix? Is the opposite of a phoenix a black swan?

Dr. Porkchop's picture

I believe it's actually a turd in need of a polish.

Misean's picture

That's actually not that difficult a trick.


Making AIG shine is several orders of magnitude more complicated.

trav7777's picture

so, the banks will be made whole on their muni bond holdings as AIG is again used as a gigantic money conduit to wall street

Dr. Porkchop's picture

I'm a pig, I want my turn at the trough dammit!!!

John McCloy's picture

Yes Trav your dead on..nothing but a slushfund.

Crassus's picture

True, but they provide many, many services to the government. Ask Frank Wisner.

Life of Illusion's picture



…and eventually assets liquidated and sold off for a loss to political insiders.

TruthInSunshine's picture

AIG is like Herpes; the gift that keeps giving.

jmc8888's picture

But of course that's 36 percent given all the options to purchase.  I'm sure the number of ZH readers that thought municipal bonds + any and/or all on that list (at some point) would raise the number...much much higher.

89 percent did not pick other, and of that 11 percent, I'm sure many were thinking of 'other' as 'all of the above'.  (even if it asked for 'first')

So when ZH quotes 36 percent, they are being very conservative with their estimate.  I'm sure the actual number that expected municipal bond buying, is ultimately much higher.

It will also show us exactly what this monetary system allows.  Help destroy the world, get bailed out, still have the toxic stuff, rinse, repeat and tell others it's a brand new and unexpected short term liquidity problem.

AIG needs to meet Glass-Steagall once and for all.  No more fraudulent bailouts. Someone needs to put a chastity belt on this serial fornicator spreading their Gonna-Herpa-Syphil-Aids.  But don't you see, in this imperial monetary system everyone is balls deep in everyone else's crapper.  Monetary Condoms? Like Willie Nelson said in some movie, "You know how much condom's cost in the 60's? Hell neither do I, we didn't use them"

camoes's picture

Short AIG bitchez!!!!

Sad Sufi's picture

Yes Trav,

"Bailout" needed for muni losses goes not to the communities that are bankrupt, but to the banks, again.  Taxes taken directly to gambling bankers.

Amish Pirate's picture

Just in time for MBIA CEBO's next week

f16hoser's picture

Really? Goldman Sachs white Shoe Boys need another bonus?

f16hoser's picture


buzzsaw99's picture

Benmouche is one of "them". No matter how much money AIG loses Benmouche will get his millions. It isn't about AIG or the taxpayer, it is about the maggots in high places.

Seasmoke's picture

Goldman is going to have be smarter this time how to get the money out the backdoor of AIG

No Bid's picture

Jesus Christ lock up Merideth Whitney.  Her call is two years to late and everyone knows that municipalities lag the real economy in recessions.  Boring.  AIG owns munis and munis suck.  Great. 


Unless they've bought everything shown to them, kinda like they did with CDS, they shouldn't be in that bad of shape.  I take it those idiots probably bought anything with 5%+ yield over the last year though.  Probably own every mello roos and dirt bond in existence.  If that's the case, we've found the perfect match.  Those shit bonds go under and so does the firm that refuses to look at what they buy.  


PS - CDS as a product is perfectly fine, a nice replacement for ratings agencies.  Buying with indescretion is the problem.

topcallingtroll's picture

actually in my case buying a cds with indiscretion was a problem once too.


High quality munis have a higher interest rate than treasuries right now in the longer durations.  These bonds in most cases are backed by tax revenue with priority payment. For any tax bracket if you are buying treasuries you ought to be buying quality, carefully chosen munis instead (of the same duration)

prophet's picture

squeeze turns into freeze

No Bid's picture

I don't mean to be rude.  I'm new here.  But I definitely mean buying.  Know what you're buying.  Know why you're buying it.  You can't assume that sellers are omnipotent and that buyers are casual.

JW n FL's picture

if you are willing to hold till term... and you are not looking for the income... and... and... and... fuck it, call it high risk.

ft65's picture

JW n FL / ^TrInIty^ I now understand why you are known as "Captain Underpants" at another place. Is there really a need for unnecessary expletives? Still I suppose it's better than talking about guns, ammo and fighting off the hoards

No Bid's picture

Yeah I meant selling, was drunk.  Don't buy munis with indescretion, don't sell CDS with indescretion.  Thanks for the save.  I'll walk away in shame now.

mynhair's picture

Oh sure, pick on AIG for a QE3 excuse, like one is needed.

mannfm11's picture

There won't be a QE3.  Bennie is going to find out how stupid he is after long interest rates have moved in the opposite direction of what he assumed due to the disaster he has created.  He and Greenspan should be tied to long ropes and swung in opposite directions, run together like a couple of big clappers.  They could call it the collision of the bubbles.  

plocequ1's picture

Will someone press the fucking reset button already? I hate prolonged death. Bring it on already bitchez.

LMAOLORI's picture

Taxpayers already own over 92.1 percent  AIG patd back the Fed but not the taxpayers



mannfm11's picture

What a bunch of crap.  I had a friend bring up AIG a month or so ago, him having read or heard something in the media about the massive recovery.  I informed him they reverse split the stock something like 20 to 1 to put some fire under the price movements and get the suckers interested.  It was in the 60's then.  I noticed it was back down to around $40 yesterday, another Wall Street pump and dump.  

I don't know about these municipals.  A portfolio of $40 billion, I would suspect that bar a disaster, the losses are probably bearable.  If not, there is a lot more fire where that smoke is originating.  I mean, what entity of any size doesn't have exposure?

Where I was stunned is I recall the agreement the government supposedly made in the AIG bailout.  It was 80% of the company and AIG still owed the money.  Wasn't that a $180 billion bullet they took?  That is total bullshit that amount or anything near it was paid off, as its peak market cap wasn't much larger than that prior to the huge loss.  How much of this stock was bought under $1 a share prior to the reverse split that put speed into the changes in the price, of course to get public traders interested?  Once the government dilutes this bag of crap, there will be another reverse split to keep it listed.  

Eireann go Brach's picture

Soon AIG will be speed dialing Ben on the bat phone! I am shocked that not one person in this country has paid a visit to the home of Bernanke, and hung him upside down from the roof of his house beating him like a pinata!

buzzsaw99's picture

the fed they may yell at you

the fed they may hit you

the fed they may eat your last piece of meat