Ok, just a little news-flash:
American Capitalism quietly passes into history.
Federal Reserve is bailing out AIG – and American International Group … well is now true to its name! It is owned by the Government of US and has subsidiaries worldwide.
The Fed will extend a 24-month bridge loan of $85.0 billion to the insurer, in return for an unprecedented acquisition of a 79.9% stake in the firm by the central bank.
Now, this acquisition of a private company by the US Government brings about interesting questions – what about the Joint Ventures that AIG has with companies in other countries in a sensitive and socially important area like insurance? For example, TATA-AIG. How does Government of India feel when one of the largest insurance company is substantially owned by the US Government?
Would it dissolve TATA-AIG?
What if TATAs went bankrupt and GOI bought their part? Then it would be a JV between the US and Indian governments? What a bloody mockery of the capitalist system!
Its bad enough that the Government is taking over the stake – its worse that it is relieving the top management led by CEO Robert Willumstad! So, who will run this company? Bernanke? Or Bush? and maybe in future – god forbid.. Sarah Palin – who has the rich “executive experience” of running a large town of 7000 people!
At the very least, this buy-out will not bring total collapse of the market. Bravo! But is $85 billion ENOUGH??? It is a bridge loan for 24 months. Is this another version of the open ended money eating machine like Iraq? Is this the Financial Iraq?
Actually, if you look carefully – the financial sector IS a FINANCIAL IRAQ!