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.

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AIG retires $16 billion in credit-default swaps with government funding

December 24, 2008 by · Leave a Comment
Filed under: Industry News 

Here we go, we are now actually using real money to retire insurance contracts.  Isn’t that great that we are going into debt to either by pieces of paper at face value or we are paying off insurance contracts that have already gone bust.  How free market is that?  There is so much profanity that I want use when I think about the evil that is being perpetrated on the American public.

This is basically robbery without the gun.  What happens when an Insurance company issues too many contracts and a bunch come due????  They go bust and for good reason.  In my opinion AIG should have been left to fail like anyone else who did not carry proper loss reserves.  This gives future banks and insurance companies the lesson that is you make mistakes that puts your company at risk then you will pay the prices that everyone else pays, go out of business.  If you want this too stop before we have so much debt that we default on our dollar then you need to educate people and start calling your representatives non-stop until you start hearing them change the tune of 100% bailout.  Here is what one person said that had the guts to say it:

“‘Who are we bailing out here?’ is a broader question,” said Bill Bergman, an analyst at Morningstar Inc. in Chicago. “We’re using public resources to provide benefits to these counterparties that they wouldn’t have had in a free-market solution.

News:

American International Group Inc. retired another $16 billion in credit-default swaps, the contracts that almost caused the company’s collapse, after buying the underlying securities with help from the Federal Reserve.

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AIG gets expanded bailout to $150 billion and reports $24.5 billion loss

November 10, 2008 by · Leave a Comment
Filed under: Policy News 

Well here go, NPR and Bloomberg reported this morning that AIG’s bailout is going to ballon to $150 billion dollars.  These loans might be paid back over time but at this point this is a lifeline to AIG.  What they are failing to say, is that these losses they are posting is because they were on the wrong end of credit-default swaps (CDS).  Most likely these losses are tied to Lehman Brothers and Fannie/Freddie.  

They might be paying out on some of the many foreign firms that have failed or were nationalized, being the largest insurer in the world makes me tend to think they were a big player in the CDS market.  They need to report their CDS position so we can know if this is a black-hole that the U.S. taxpayer is just literally throwing money into.  In the end, mainstreet is going to pay for this mess just to get into another mess.  Enjoy.

News:

American International Group Inc. got a $150 billion government rescue package, almost doubling the initial bailout of less than two months ago as the insurer burns through cash at a record rate.

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AIG borrows $90.3 billion from Federal Reserve

October 24, 2008 by · Leave a Comment
Filed under: Industry News 

Its good to know that AIG can borrow over a tenth of a trillion dollars to shore up it’s balance sheet.  The new CEO is not even sure if $123 billion (amount available from the Fed) will be enough to keep them in business.  AIG’s “financial products” division is what created the current problem they are in.   This division specialized in derivatives along with other exotic financial products.  

I believe with these bank failures and nationalizations that this has triggered much of this corporate debt insurance to become a real liability and now with them people counter-party to this debt, they need to make good or default and that is the problem here that is not being discussed.  .02

Press Piece:

 

American International Group (AIG).  the insurer saved from bankruptcy by a federal bailout, has borrowed $90.3 billion from the U.S. Federal Reserve.  Figures released by the Fed late on Thursday showed that as of Wednesday, AIG had drawn down $3 billion more than a week earlier.

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Credit Suisse sees higher chance of AIG bankruptcy

September 16, 2008 by · Leave a Comment
Filed under: Industry News 

This looks to be the next shoe to drop in the market.   AIG being the largest insurer in the US could spell major trouble for counter-parties of their debt.  Estimates have placed a $400 billion dollar loss if AIG fails.  New York’s Patterson stated that AIG has not tapped their $20 billion fund to give them extra liquidity.  I have read speculations that AIG has 24-48 hours to figure out a deal or they will go under and leave much uncertainty in the markets.  To be continued…

Release:

American International Group Inc faces heightened probability of a potential bankruptcy filing by the holding company, a Credit Suisse analyst said Tuesday, a day after the insurer’s credit ratings were cut, jeopardizing efforts to raise cash necessary for its survival.

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