AIG being a near certainty of heading for bank-ruptcy at this stage

Sep.15, 2008 in Investment Opinions

Leh is the biggest bankcruptcy of all time, in the whole world, occurred in Lehman today with 600$ billion in debts. Add to this the world’s biggest insurer AIG being a near certainty of heading for bank-ruptcy at this stage following close behind.

And then for a dash of spice, throw in the fact that they’re all headed for the exits over at Bank of America now they’ve taken on their second toxic-laden company in a year in MER. And finally for good measure add the dominoe effects occuring and soon Morgan Stanley and even JPM look more and more vulnerable every day.

My only question is given these afforementioned observations, how in a ‘free market’ could the DOW not have fallen 500 to 1000 points by today?

Answer: Surely the PPT. If it is they’re just prolonging the pain that began when they did what they did with Bear Sterns, briefly creating a new socialist USA. Now FED implicitly admit they were wrong the first time with Bear by leaving Lehman for the wolves this time around.

And if today’s (so far) modest fall is not the PPT, that actually worries me far more. Could Wall St or foreign investment funds or some other powerful forces really be so powerful as to limit overall losses. Or finally could it just be the average punter is just not shorting the unruly (loose mortgage policy) financials out of existence unlike most of us on these msg boards.

Perhaps there are a lot of people on main st who are buying these dips in the mistaken hope they are getting value as these stocks are so relatively cheap compared to what they were.

Only problem with that last ethos is that most of these companies like Lehman and now probably AIG are not worth 1 cent a share depending on what they’re holding/hiding on and off they’re balance sheets.

Remember that story about conduits a few weeks ago (ie banks are hiding they’re losses off the books). Google ‘financial conduits’ to find out how the bad times are really a lot worse than these banks would have you believe, even now, or pehaps more tellingly, especially now.

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