Tuesday, March 03, 2009

Isn't the goverment breaking its own antitrust laws?

If AIG were say... Microsoft. Wouldn't the government be slapping a big ol' antitrust suit on them?


"CHICAGO (Dow Jones)--Among the keenest detractors of American International Group Inc.'s (AIG) ever-growing U.S. taxpayer bailout is the insurer's rivals, who say it throws a monkey wrench into their own businesses.

Competitors who have been overshadowed for years by AIG's dominance in key commercial insurance markets now see AIG's problems as an opportunity. But there is growing frustration that the government keeps stepping in to thwart what could be business prospects for them, said Andrew Barile, an insurance consultant in Rancho Santa Fe, Calif.

Moreover, it's daunting having the government as a big investor in a competitor. "The challenge is that we have a regulator who also is an investor," said Mike Foley, chief executive officer of Zurich Financial Services Group's (ZFSVY) North American commercial segment. "From a competitive dynamic, it creates some confusion if your competitor is also your regulator."


  1. I don't buy into this argument. Already AIG is seeing some pretty serious defections among their customers. These rival firms may have to compete with a regulator, but AIG still has to play by the same rules. It might be better for competitors if the Government lets them go completely bust, but it'd be bad for the rest of the financial markets and AIG's policyholders. While the Govt bailout is anything, but ideal, I don't think it creates an anti-trust issue.

  2. That actually sounds like a really reasonable answer. Plus, I'm guessing you know way more about this than I do.

    Hey! What is up with all the graffiti in the city? Have they just given up? I mean - at least it is artistic these days. But, wow - it seems to have really ticked up.

  3. I did my part for capitalism today by helping a client move out of an AIG annuity.

    Not sure what the deal w/ the graffiti is, but it does seem to be all over the place. In my neighborhood, if you go one block I bet you could find at least 30 tags. Here is one of my recent favorites.


  4. HA!@ That's a good one. Not artistic. But, entertaining at least. Mostly the graffiti doesn't bother me, but I've been noticing in lots of places I've never seen it. Makes it sort of loose its edgy rebellion. Kind of like tattoos.

    Hey - I accidentally stumbled upon you today. Quite accidentally. I plugged in the phone number for my last post. And one website led to another. Which led to this site:


    Which led to a forum where you'd posted.

    It was weird and completely random. I've never stumbled on anyone unless I was looking for them. It made me laugh though.

    Goof job on saving humanity. BTW.

  5. That should have been good. Not goof. My ADD is on high today.

  6. No, sorry, I don't buy the notion that "AIG has to play by the same rules." The government has great discretion in applying the regulations (witness the gross misapplication of banking regulations), and the government that owns a huge chunk of AIG is the same government that applies the regulations. You think that the fact that AIG is not only "too big to fail" but its failure will cause the government a great deal of trouble could never enter the heads of regulators? And how does one assess the risks involved in competing with such a company if one is, say, a Swiss company.

    Furthermore, AIG's financial behavior is not at all governed by the same considerations as "real" companies are. It has a bottomless checkbook from the treasury, and in the final analysis it's able to unload vast amounts of bad loans to the government.

    AIG is a corpse that is kept alive solely as a way to shovel money to its creditors (who would otherwise go broke).

    The whole thing is a fraud of monumental proportions. This is what comes of the government sticking its nose in to determine economic behavior (by actively encouraging both the giving of loans to people who are uncredit-worthy and the distribution of these defective loans throughout the financial system under totally false pretenses). Half the reason for the drying up of the capital market is the awareness that not only have the criminals not been called to account but the system is still run by those criminals (both in NYC and DC).

  7. Unfortunately, anti-trust laws are something I know least about. Which is sort of funny. IN a bad way. The gobment is always harassing the tech world. Usually nothing comes out of it. Which I why I don't learn about them. I know I should.

    Right now I'm tired of learning about the economy. I used to be able to exist in my own little bubble. Now I have to get a PHD in econ, just to figure out how all the ripples are going to hit me.