Gambling with no money -by J

March 19, 2009 – Thursday

Gambling with no money
Category: News and Politics
Insurance is a bit of a gamble. If I am an insurance company I am betting that what I insure against will never happen, and if it does, the risk will be spread out amongst other insurers.

So, if you insure homes in fire prone areas in California you had better not be the only insurer, and you had better have insured homes in other areas of the nation, as a nation wide fire or natural disaster is a risk you can accept.

AIG insured the financial markets, almost all of the markets, and they burned down.

If my name is Bernie Madoff, and you gave me all of your money, and I told you I was going to invest it, and pay you interest on your money based on the investments. However, I took the money and paid you interest on the money with the money the next person gave me, and spent the principle instead of investing it, I would be a criminal, and guilty of the largest Ponzi Scheme in history.

If my name is AIG, and I insured your financial transactions, and I told you I was putting money aside to pay for what I insured. However, I took the money you paid me for your insurance, and I gave it to my stock holders, and brilliant employees, not keeping any money to pay for the insured financial transactions, thinking they will never need to be paid, I would be too big to fail and bailed out.

In Bernie’s case, those that invested in him are out their money.

In AIG’s case, those that bought insurance for crappy investments (liar loans to name a huge number of them!!!) are having those insurance policies paid for as those crappy investments fall apart, starting with the Lehman Brothers’ investments. Going on to Goldman Sachs …

AIG entered the unregulated CDS market insuring anything that Wallstreet threw together. Put their AAA rating on those investments through insurance, and are now forced to pay out the losses in the markets.

Sure, the bonuses are wrong, and they should be clawed back, but what the hell was going on on Wallstreet? What was going on at AIG?

Most people would agree that when Lehman Brothers fell, September 15, 2008, the market crashed right along with them. I wonder how far the market would have crashed if AIG went bankrupt? When the true lose is known…

When Lehman Brothers went under the gambler was exposed. What was insured came due, and the gambler had no money. What happens to gamblers with no money? They usually get their legs broken…

I found this gem yesterday. I guess Glenn “Punch me in the face” Beck went on a tear filled gyration on air, ending in this:

“Believe in something — even if it’s wrong. Believe in it!”
Glenn Beck

Please, believe in something, but make sure it’s right, and stop believing the lies.


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