Brace For Impact And Position Your Holdings: The Governement Is Not Gonna Save Your Bacon

From Now On Every Trade By AIG Is A Trade By The Government

Submitted by cpowell on Wed, 2008-09-17 04:04. Section: Daily Dispatches

Government Bails Out AIG with $85 Billion Loan

By Jeannine Aversa, Ieva M. Augstums,
and Stephen Bernard

Associated Press

via Yahoo News

Tuesday, September 16, 2008

http://news.yahoo.com/s/ap/20080917/ap_on_bi_ge/aig;_ylt=AonHCCQ2_HZ__h1...

WASHINGTON -- For the second time this month, the U.S. government put taxpayer money on the hook to rescue a private financial company, saying the failure of the huge insurer American International Group Inc. would further disrupt markets and threaten the already fragile economy.

The Federal Reserve said Tuesday it would provide up to $85 billion in an emergency, two-year loan to rescue AIG, which teetered on the edge of failure because of stresses caused by the collapse of the subprime mortgage market and the credit crunch that ensued. In return, the government will get a 79.9 percent stake in AIG and the right to remove senior management.

The move was similar to government's seizure on Sept. 7 of mortgage giants Fannie Mae and Freddie Mac, where the Treasury Department said it was prepared to put up as much as $100 billion over time in each of the companies if needed to keep them from going broke.

Both moves were bound to raise questions about the use of taxpayer money to bail out private firms.

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Barrick Leads Surge in Gold Stocks as Bullion Gains in Crisis

By Stewart Bailey

Sept. 17 (Bloomberg) -- Barrick Gold Corp., the world's largest gold miner, led a surge in gold producers' stocks after a deepening financial crisis drove bullion prices to their biggest intraday percentage gain in more than eight years.

Toronto-based Barrick jumped C$3.23, or 10 percent, to C$34.10 at 11:49 a.m. in Toronto Stock Exchange trading, the biggest gainer on the 16-member Philadelphia Stock Exchange Gold & Silver Index, which rose 4 percent. Newmont Mining Corp., the largest U.S. gold producer, rose $2.79, or 7 percent, to $42.34.

The U.S. government took control of American International Group Inc. in an $85 billion bailout to prevent the biggest financial collapse. That, along with the bankruptcy of Lehman Brothers Holdings Inc. and the federal takeover of mortgage companies Fannie Mae and Freddie Mac, has driven investors to buy bullion, often used as a hedge against financial collapse.

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