10436 Bumping one of adriatica's posts

This is a thread started by adriatica about six months ago. And this is a quote from his first post. "disturbing programme last night on Rai 3... the report series did an investigation into how Italian comunes have got into debt with the banks... basically it seems that the financial officers of these comunes... ranging from very small to places like Milan,Verona and Venice... have taken out very risky loan investment options which were as bad as any of us could make say with the mortgage crises in America... and the problems of interest rate changes against equity.. the problem being that bank financial experts have basically mis sold to inexperienced book keeper like people who took decisions well outside their competence... and when they have found that they are getting further into debt have re negotiated terms to drop the payment due dates back another ten years or so with consequential increase in the payments and the ultimate burden of debt.... its not one or two ...and its like a house of cards waiting to collapse... as many of the northern richer comunes have these arrangements based on risk attached to some of the poorer and less liquid southern comunes as the banks didn't want to carry that risk alone... on the programme as a financial investment expert looked through the cases you could see the dis belief in his eyes at how bad these investments have been and that people with no market experience could have been led so far down the paths of debt with basically their investments of public monies and the terms of virtually guaranteed loss as they leaped into very high risk investment...." So - why am I bumping this thread now? (some of the links no longer work which is why I'm doing it this way). Basically, because the US financial commentators are pleading the necessity of funding AIG, a large American insurance company which is 'in difficulties'. They are pleading this move (in my opinion) for diplomatic reasons - just the same reasons which were invoked for the rescue of Freddie Mac and Fannie Mae. (Securities issued by those 'companies' were widely held outside the US, and regarded as close to treasury bonds, so it would have been rather unfortunate for the world's perception of the US to junk these bonds). Now - AIG (were they mad?) - sort of 'insured' these dreadful 'investments' held by Italian comuni among others: so if (when) AIG fails - oops - people outside the US are going to notice. It is all terribly 'unfair' isn't it!