Capital Insights with Jack Kern: To the Bat Cave, Alfred
- Nov 14, 2008
Oh, those happy go lucky guys at AIG are at it again. Having been the fortunate beneficiaries of millions in taxpayer funds, they've now held another retreat and are claiming it was for educational purposes for the investment broker network. Isn't the investment broker network responsible for how we got into this mess in the first place?
According to AIG, the meeting was at minimal cost, compared to the value these events supposedly create and get this – if AIG can't get the brokers to sell their products to the right customers for the right purposes, then the brokers will sell someone else's policies. The right products to the right customers for the right purposes? Are they dreaming?
And Congress thought bailing out AIG was a good idea, while the major car guys are staring at the very real possibility of doing a Bear Stearns into history?
Meanwhile back at the Bat Cave.
I am reminded of several scenes in the Batman franchise where Wayne Manor is the headquarters of an effort to save Gotham City from an organized crime syndicate. No matter how wildly entertaining some of these bad guys were, none of them seemed to have figured out how to take dough from the public dole and squander it like AIG. With the government now holding a substantial portion of AIG in trust in one way or another, the risk now starts to spread across credit markets doing the opposite of what it was supposed to – threatening public sentiment instead of building confidence.
Fannie and Freddie aren't in such great shape either and the last thing we need as the multifamily industy is the public deciding to color all funding programs with the same brush. We can only hope that Congress wakes up and puts new rules and restrictions on AIG and the banks so we can get credit markets back on track.
It's starting to look like hanging out at the Bat Cave might be a good idea after all.
(Jack Kern is the Managing Director of Kern Investment Research and also the lead singer of Elmo's Rant, which recently released the single, entitled, "You Were Ugly As A Baby So Don't Bark at Me Now." He can be reached at firstname.lastname@example.org.)