AIG Bailout: Federal Reserve Bails AIG out with $85 Billion - World’s Foreclosing Balance Sheet: The Myth of Decoupling, Moral Hazard, and American Dream Disappearing.
AIG is the next in line for the Federal Reserve food stamp program. As the Federal Reserve decided to stand steady on rates, the markets did an unusual move. It actually moved up on a no move when everyone around the world was expecting a cut. Now, it is obvious why the market dipped by triple digits briefly after the Fed announced the no cut and ended triple digits higher. The market was extremely volatile today given the Lehman Brothers bankruptcy over the weekend and the unknown factor with insurance giant AIG - well as it turned out it was only unknown to the vast public since the Fed was getting ready to put more taxpayer money at risk.
For the past decade, we have become accustomed to the market having a brief rally after every Fed rate cut. This became a Pavlovian conditioned response to a society addicted to easy […]
Original post by drhousingbubble
