AIG, Why you should be paying attention

@hawkeye10,

i already heard on CNBC this morning that there are companies/investors out there that are picking over the bones of defunct and near defunct financial institutions - i believe the common name is "scavenger" .
hbg

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@hamburger,

that happens alot.

Just like the lawyer who chases the ambulance..

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@hamburger,

and they will get some real deals, because the sellers have to sell, and because in the case where value has to be guessed at the lower guess is normally closer to the sell price than the higher.

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@MagicBlackCat,

Cat, hit "Contact Us" (bottom of any page) and send me a note -- I'll write back.

PS AIG got a bailout. $85 bil: http://www.nytimes.com/2008/09/17/business/17insure.html?hp

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http://www.bloomberg.com/apps/news?pid=email_en&refer=special_report&sid=aAKIaLPeVGf4

At least this means the sharks will stay away for now...

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@MagicBlackCat,

AIG BEING RESCUED , BUT WALLSTREET LOSES FAITH IN PAULSON

see article :

http://www.theglobeandmail.com/servlet/story/RTGAM.20080917.WBstreetwise20080917083514/WBStory/WBstreetwise

while it may have been necessary to bail out AIG , wallstreet seems to have lost confidence in secratary paulson .
as i heard on the business news last night : "paulson could have rescued AIG for $20 billion on friday , but he waited until monday and paid $80 billion " .

apparently ther are now a number of other financial institutions and other large corporations hoping for a bailout .

looking at the financial news from around the world shows a pretty bleak picture : britain , germany , japan , canada ... not many positive business news .

(canada's - one time - industrial giant and darling NORTEL is reporting losses year-after-year . some years ago it was thought that nortel's growth was unlimited , shares were in the $100 plus range - you can pick them up for less than $10 now - about the price of wallpaper .)

even merril lynch - who one might think should be charitable towards mr. palson - is not impressed with his action :

Quote:

The economists at Merrill Lynch, who gained first-hand experience in navigating stormy markets this weekend, predicted the AIG bailout will create as many problems as it solves. In a note Wednesday, chief economist David Rosenberg and Drew Matus said: “In the long run markets do not like inconsistency and prefer certainty."

“With this move the Fed and Treasury have blinked in the face of market pressure once again,” said Merrill Lynch. “They continue to react to situations rather than getting in front of them and now they have created uncertainty about what firms qualify for bailouts and which do not. Until that goes away, markets will continue to test their limits and that is not good news for markets going forward.”

as one commentator put it : "we are being told that capitalism and greed are great for mankind - but when the financial giants are in trouble they think they are entitled to 'socialized medicine' " - hmmm , makes me think .
hbg

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@MagicBlackCat,

Got your note, thanks.

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@hamburger,

I think the street misread what happened over a week. True, the government could have saved AIG for much less a week earlier, bit saving AIG was not the point. Maintaining an orderly economy was, and the feds have done this as well with an 85 billion loan now as they could have with a 20 billion loan then. However, AIG would have still been fine a week ago, but now they will die. The death of AIG is the proper price to pay for the problems they have caused for the nation.

the street is pissed that the government did not save one of their own when they had the chance......**** them, the street got themselves into this trouble with their neglect/crimes depending upon how charitable one wants to be. Sometimes death is justice. Throwing lifelines to save those who should die would be a miscarriage of justice

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@hawkeye10,

This guy just got their direct mail ad and took a funny picture:

http://farm4.static.flickr.com/3162/2864507526_39d20d558b_d.jpg

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@Robert Gentel,

Robert Gentel wrote:

This guy just got their direct mail ad and took a funny picture:

Funny!

However, their property and casualty insurance company is not at fault in this instance. It's a singular financial holding business within AIG that created this mess.

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@Foxfyre,

Foxfyre wrote:

hawkeye10 wrote:

ask the people who were at Bear, Merrell and Lehman how they felt about their firms chances days before the knife fell.....see my point??

I do Hawkeye, and you may be right about AIG, but I've been in the business a long time now. I will be a bit surprised if they do not weather the storm.

You're obviously mistaken in your assessment, or they wouldn't have needed an 80 Billion dollar loan from the tax payers. Do you still believe that they have "weathered the storm"?

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@MagicBlackCat,

Ya, one tiny part of AIG Destroyed the firm...and your point is??? The executives and the board are responsible for what happens at all of AIG, since the London traders had the power to overwhelm the entire firm in debt they were obviously poorly supervised......it reminds me of the french bank in Jan where one trader went around the rules at the bank an created $7 Billion in debt, on person did this but all of the bank was responsible because they created the conditions where one person could create billions in debt for the firm without anyone being aware. The firm did not get death but the CEO was dumped. Same with Barring bank where Nick Leesons rogue trades swamped the firm in debt, and Barring got the death penalty for allowing a Nick Leeson to operate in their firm, which is how it should be.

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@Wilso,

listening to CNBC this afternoon .
there was a bit of optimism expressed by the pundits when the show started , but in the end they all seemed to agree that they could not make a prognosis about the market until they hear what will come out of tonight's meeting between secretary paulson and members of congress .
as one of them said : "too early to tell ... let's wait a few weeks until the market has had a chance to settle , by that time we might know a little better what the total financial picture is " .
a couple of contributors suggested that it might take a couple of years before "everything" is known about AIG ... and how far the damage has crept into other financial institutions . "

a former treasury official appeared on PBS and claimed that the liquidity crisis at AIG "arose over the weekend" .
all i can say is , if no one at AIG kept an eye on the liquidity and cashflow on a daily basis , the whole management team must have been "asleep at the wheel " (they might as well have kept some monkeys in charge of finance at AIG - they probably would have done just as good a job and would have worked for bananas and peanuts ) ,
hbg

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@hawkeye10,

hawkeye10 wrote:

Ya, one tiny part of AIG Destroyed the firm...and your point is??? The executives and the board are responsible for what happens at all of AIG, since the London traders had the power to overwhelm the entire firm in debt they were obviously poorly supervised......it reminds me of the french bank in Jan where one trader went around the rules at the bank an created $7 Billion in debt, on person did this but all of the bank was responsible because they created the conditions where one person could create billions in debt for the firm without anyone being aware. The firm did not get death but the CEO was dumped. Same with Barring bank where Nick Leesons rogue trades swamped the firm in debt, and Barring got the death penalty for allowing a Nick Leeson to operate in their firm, which is how it should be.

Customers who have insurance policies in the property and casualty side are fine. Very likely this will be the subsidiary to be sold because it held a 800m profit (not loss). I am interested to see which companies step up to the plate to buy us. Just in the last 11 years I have techinically had four different employers. (same book of business + growth)

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http://able2know.org/topic/122739-1

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Quote:

AIG to fully repay U.S. government
By Charles Riley, staff reporterJanuary 12, 2011: 6:59 PM ET

NEW YORK (CNNMoney) -- American International Group, which received a massive bailout in 2008, said Wednesday that it expects to complete a recapitalization by the end of the week that will allow it to fully pay back the government.

Following through on a plan announced last year, AIG (AIG, Fortune 500) will convert outstanding preferred shares acquired by the Treasury into common stock. When the transaction is complete, the Treasury will own approximately 92% of AIG's common shares.

http://money.cnn.com/2011/01/12/news/companies/aig_treasury/index.htm?hpt=T2

Wow, how nuts is that?? We can claim that a company almost completely owned by the Federal Government has paid the Government back? This is more of the GM BS, where words are used to claim that the plan worked, that the government is out, when this is not true in the slightest.

In this case "working" would have been that AIG is mostly dismantled, that a failed company was properly put into the Grave. But no,we dont believe in free market capitalism any more, we cant kill either zombie banks nor worthless bankrupt companies that helped dearly in nearly destroying the National economy.

Way to go AIG, you are WINNER!

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@hawkeye10,

thanks for this information...it was of great help Smile

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AIG, Why you should be paying attention

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