Latest gov't bailout troubles local taxpayers

? Despite the government bailout of the fraught insurance giant AIG that was announced Tuesday evening, the financial markets continued convulsing, with the Dow plummeting more than 400 points Wednesday.

News 12 Staff

Sep 17, 2008, 11:36 PM

Updated 5,728 days ago

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Latest gov't bailout troubles local taxpayers
? Despite the government bailout of the fraught insurance giant AIG that was announced Tuesday evening, the financial markets continued convulsing, with the Dow plummeting more than 400 points Wednesday.
The AIG bailout follows JP Morgan?s buyout of Bear Stearns, the government takeover of mortgage companies Fannie Mae and Freddie Mac, Bank of America?s takeover of Merrill Lynch and the bankruptcy filing of Lehman Brothers. News of Lehman Brothers? fate over the weekend brought the Dow down more than 500 points at the market?s close Monday.
The Federal Reserve Board has agreed to give AIG a 2-year emergency loan worth up to $85 billion. In exchange, the government gets a nearly 80 percent stake in the company along with the right to fire senior management. The bailout is similar to deals the government made with Fannie Mae and Freddie Mac, which New York Gov. David Paterson helped to broker.
Following the announcement of the bailout, White House Press Secretary Dana Perino said at a press conference that the president's economic advisors had determined that some of the companies are so big that to allow them to fail would have dealt a crushing blow to the national economy.
Many that spoke to News 12 Westchester say they don?t agree with the latest deal and ask why no one is bailing out the taxpayers that are losing their homes in the mortgage crisis.
"Eighty billion is a lot of money, and I think a lot of homeowners are loosing their homes that could use a bailout, and I don't think they should do it for AIG," says Johnathan Kamensky, of Sleepy Hollow.
As the result of the crisis on Wall Street, Gov. Paterson says the state probably lost a billion dollars on Monday alone, potentially rendering the cuts approved during a special summer session inadequate.
Another emergency session could be called by state legislators to avoid a budget deficit.


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