A.I.G. Reports 4Q Loss of $61.7 Billion as U.S. Gives More Bailout Aid

March 2, 2009 by · Leave a Comment
Filed under: Stock Market News 

Wow, that just about sums it up.  $61.7 billion loss in a single quarter.  That is some major derivative exposure and losses.  I can’t believe we are actually throwing money at this black-hole of liabilities.  There will be outrage if we actually bailout all these unregulated insurance contracts out.  It really makes me question why I am sending 1/3rd of my pay to our representatives that in turn have decided to reward greedy corrupt people, if save this flawed system, that is one thing.  But, I want to see the board, executives, shareholders and bondholders get wiped out so I know they are not profiting from this mess and we are setting a precedent that will make the next lot think twice about running these types of practices.  Here was the most scary statement of the whole article, “Although he avoided offering a forecast on the first quarter, Mr. Liddy said A.I.G.’s outlook was “very much going to be influenced by what happens to the condition of the economy and the financial marketplace around the globe.”  Well if I read this right, you have insurance that is tied to the markets going up when it looks like we are about to have Great Depression 2.0.  When do this intervention stop and we let the markets sort this out?

News:

The loss of $22.95 a share compared with a fourth-quarter loss in the period a year ago of $5.3 billion or $2.08 a share. For the year, A.I.G. lost $99.3 billion or $37.84 a share, compared with a profit of $6.2 billion or $2.39 a share for 2007.

In the quarter, A.I.G. took a $21 billion charge related to taxes and wrote down $25.9 billion in assets, including mortgage-back securities and credit-default swaps.

The company’s general insurance business lost $2.8 billion compared with a profit of $2.1 billion in the quarter a year ago. Premiums dropped 16.3 percent to $9.2 billion and earnings from premiums fell 5.9 percent to $10.98 billion.

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