Posted by
Roy Rolling on Tuesday, September 16, 2008 9:14:19 AM
AIG is likely to get a private, commercial bank loan---they have discovered how to get blood out of a turnip.
But seriously. In a final act of hubris, collapsing companies want to only borrow money to bail themselves out at terms favorable to them. How many times have you gone into a bank (needing money) and told them how much collateral you were gonna put up and at what rate you were going to pay, regardless of your credit risk? Well, once, if you were Bear Stearns.
But that oasis won't quench the thirst of even one company what to speak of the line of parched CEOs lining up for a drink at the Fed.
Get real. In the 80s Chrysler had to pay for their bailout with warrants that eventually allowed the government to participate financially in the company's recovery. This current crop of hedge fund managers and CEOs still want to take the easy way out---have someone else pay for their mistakes and, when/if things improve, pay even more for a bigger CEO yacht. This is a classic mis-use of leverage---leverage should have been applied to a crowbar to pry these fat-asses from their cushy chairs years ago.