http://www.lewrockwell.com/…

Today, the Wall Street Journal reports that the ban on short selling is “casting a very wide net.” I just downloaded, into a spreadsheet, the list of companies on the short-sale ban list. There are about 1,000 listings. Is anyone surprised that GM and Ford were added to the list this week? Since the SEC has turned over the job of determining who gets on the list to NYSE and Nasdaq, listed companies are pounding on the doors of NYSE and Nasdaq to be put on the list of “protected companies.”

The original concept supporting the placement of the ban has already been blown to bits. Without setting any formal rules (read: arbitrary rules), the ban was supposed to “protect” banks, savings associations, broker-dealers, investment advisers, and insurance companies. One out of seven of all companies listed on US exchanges are now on The List. Libertarians always know that creeping interventionist tactics, rationalized by authorities, central planners, and the recipients of the intervention as being necessary to quell immediate crises, are always a precursor to long-term (and often permanent) takeovers, by government, of market processes. But occasionally, there is a bright light in this swelling tide of statism:

American Physicians Capital Inc., a provider of medical-malpractice insurance, opted off the list, too. CEO Kevin Clinton said in a statement: “We also believe in free and fair markets.”

Also opting out: Greenlight Capital Re Ltd., a Cayman Islands-based reinsurance company. Vocal short seller David Einhorn is chairman of Greenlight.

“We believe it is in the long-term interest of our company to have the market set an appropriate price for our shares,” the firm said in a statement. “We also do not want investors to feel our stock is the beneficiary of any artificial price support.”

Here is the direct link.

Why is Zale Corp on the list? Is the jewelry market really that fragile?

Within minutes of the FED announcing the rescue of the crumbling insurer, I had the luck of being able to chat with an AIG employee about the Government’s repsonse and AIG’s current financial situation:

AIG employee looks like the Fed will be bailing us out. take THAT, taxpayers!

xyz ugh. this is really sickening.

AIG employee bwahahahaha!!

xyz you do realize that youre part of that “tax payer” category, right?

AIG employee yeah but the money this will bring me personally is probably more than Ipaid in taxes in the past year or so. finally the government does something right for a change. yay Fed!

xyz i disagree

AIG employee No, if AIG bit the dust then I just would’ve been canned with everyone else. Now we’ll be offered buyouts. That’s a lot of money for me.

xyz you should have been canned, just like lehman brothers. AIG was bankrupt and deserved to fail

AIG employee No, AIG is solvent and I did not deserve to be canned. There is a liquidity due to the Financial Services arm of the company. liquidity *issue*. Anyway, the insurance part of the company (where I work) is healthy and we have $1 trn in assets worldwide.

xyz an $85 billion rescue plan is solvent?

AIG employee You’re talking about something you don’t know anything about. it’s a bridge loan. AIG has more than enough assets to cover its credit default swaps, but not enough to to capitalize them. enough *time* to capitalize them


Read More…

http://online.wsj.com/…

American International Group Inc. was facing a severe cash crunch as ratings agencies cut the firm’s credit ratings, forcing the giant insurer to raise $14.5 billion to cover its obligations.

With AIG now tottering, a crisis that began with falling home prices and went on to engulf Wall Street has reached one of the world’s largest insurance companies, threatening to intensify the financial storm and greatly complicate the government’s efforts to contain it. The company is such a big player in insuring risk for institutions around the world that its failure could shake the global financial system.

Shares of AIG fell 42% to $2.70 in recent premarket activity Tuesday after earlier in the premarket session rising 5% to $5. The stock tumbled 61% on Monday amid the U.S. stock market’s worst daily point plunge since the first day of trading after the Sept. 11, 2001, terrorist attacks. In addition to AIG’s woes, the financial markets were rattled by the rushed sale Sunday of Merrill Lynch & Co. to Bank of America Corp. and the bankruptcy-court filing of Lehman Brothers Holdings Inc.

AIG has been scrambling to raise as much as $75 billion to weather the crisis, and people close to the situation said that if the insurer doesn’t secure fresh funding by Wednesday, it may have no choice but to opt for a bankruptcy-court filing.

“The situation is dire,” a person close to AIG said.

With strong encouragement from the Fed, Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. are seeking to raise $70 billion to $75 billion in loans to help prop up AIG, according to people familiar with the situation. Word of AIG’s efforts to borrow that much sent the stock market tumbling in the last hour of trading.

Korean markets were down 6% today. Many of the banks are down in premarket. Looks like it’s going to be another interesting day.

http://www.nydailynews.com/…

Rudy Giuliani has released a new Web video (note, not a TV ad) that touts his support for a so-called “federal backstop” national catastrophe fund to assure the private insurance industry that the government will assist with post-disaster rebuilding and (theoretrically) drive rates down in high-risk areas.

This is a big issue in Florida, where Giuliani has staked the future of his presidential campaign and is striving to address bread-and-butter local issues that also include Everglades preservation and space program investment.

The video starts with the statement: “Some say we don’t need a national catastrophe fund” - a dig at John McCain, who said in no uncertain terms that he doesn’t support creation of such a fund - followed by: “Others say they haven’t looked at it yet, and want to sit down with insurance companies first” - a dig at Mitt Romney, who said he wants to “investigate options for expanding the private insurance market” before signing on to the idea espoused by Giuliani (not to mention Florida Gov. Charlie Crist, whose endorsement is much sought after).

The kicker: “Only one Republican candidate has proven experience dealing with disaster. Only one will fight for a national catastrophe fund. And only one has a plan to lower rates and fix the insurance mess. Tested in crisis. Ready to lead. Rudy Giuliani. The only one for Florida.”

Romney pulled out a win in Michigan at least partially because he promised to spend government funds (aka the tax money you “give” them) to re-energize the auto industry. Now Giuliani is offering to subsidize those in Florida who don’t want to be bothered with the high insurance costs because they live in a dangerous area. I really hope he loses Florida. Both McCain and Romney are ahead of him now and he’s supposedly spent millions down there and has made it a make or break situation. If he fails there he will be out of cash and out of gas. He’ll probably have to drop out. Huckabee is losing steam too and could be dropping out if he doesn’t make some money soon. Unfortunately Romney is self funding and McCain has been bringing in the cash now that he’s in front. Gathering over a million dollars on Tuesday along with an endorsement by Henry Kissinger. Funny… Paul gets $1.8+ million on Monday and all he gets is a blog post while the McCain million gets an actual story.

http://www.cato-at-liberty.org/…

During an interview with NBC television, Mr Buffett brandished an informal survey of 15 of his 18 office staff at his Berkshire Hathaway empire. The billionaire said he was paying 17.7% payroll and income tax, compared with an average in the office of 32.9%.”There wasn’t anyone in the office, from the receptionist up, who paid as low a tax rate and I have no tax planning; I don’t have an accountant or use tax shelters. I just follow what the US Congress tells me to do,” he said.

If he really wanted to ‘pay his fair share’ he could not only voluntarily give the government more but he could give gifts to those he felt were paying too much. Perhaps he would like the 70%+ top tax bracket back from WWII? Does he ignore the fact he’s paying taxes on capital gains and dividends vs. the receptionist’s wages? It’s taxed before he gets it at 35%. Then he pays 15% on that. It just floors me… he wants the government to force him to pay more taxes when he can freely give them more and ask others to do the same. It’s like when Bill Maher complained to Bill O’Reilly about the Bush tax cuts. He said effectively the same thing as Buffett is. “The rich aren’t paying their share… I’d gladly pay more.” When O’Reilly showed him the form where you can give more than required Maher just stopped dead in his tracks, looking like a deer in headlights. They aren’t dumb guys and I doubt they are ignorant to the fact they can pay more… so what is it?  What’s their justification for wanting the threat of force to be used to take (more of) the property of their fellow citizens? They have the means and connections to supply many of the services the government does… why don’t they? Why can’t Michael Moore setup his own insurance company if the thinks they are so horrible? Why must all these plans of their be implemented by a proxy at the barrel of a gun?

http://www.reason.com/…

Take the case of four-year-old Elias Dillner. In 2004, Dillner’s parents were told by doctors that their son too would benefit from cochlear implants. After being fitted with the first implant, Dillner’s insurance provider said the second operation could not be “prioritized.” The family would have to wait. “We will do anything,” Elias’s mother told reporters, “even if it means that we have to take out a loan for the operation.” Without insurance, the second procedure would likely cost $40,000.

But Dillner’s truculent insurance provider was not Aetna or Kaiser, but the notoriously generous Swedish welfare state, where health care is “free.” And because there is no private clinic in Sweden that could perform the operation, Elias will sit in a queue, hoping, in lieu of privatization, for prioritization. Swedish legislator Robert Uitto said that the Dillner case was unfortunate, but “People shouldn’t, on principle, be allowed to purchase care in the public system.”

For those too busy or lazy to find evidence against claims Michael Moore makes in his new film this article is full of them. Enjoy.