Tuesday, March 3, 2009

AIG = All Income Gone

From NY Post:

American International Group Inc., once the world's largest insurer, said Monday it lost $61.7 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history, amid continued financial market turmoil.

The results come as the U.S. government announced a restructuring of a bailout plan for the troubled insurer, extending $30 billion in additional aid to the company.

And more from the Post:

The US government is set to dole out an additional $30 billion to AIG, according to people familiar with the matter, raising concerns the insurance giant deemed too big to fail is fast becoming a black hole for taxpayer dollars.

The new cash infusion would be American International Group's third since September. It would be paid in the form of a line of credit from the Troubled Asset Relief Program, or TARP, a person familiar with the situation told The Post.


Lino said...

..But ofcourse we know who to blame:
Barney Frank and the 1977 Community Reinvestment Act.

So say Rush Limberger and Shawn Hannity.

Anonymous said...

And we can't even shut the b*st*rds down for fear of taking down the banks and the brokerages and our little old ladies deposits and pensions with them.

As far as Rush and Shawn go, its in line with the truthfulness of everything else the drug addict and liar says.

Exotic insurance contracts that AIG never expected to pay on did them in, just as some "names" (rich backers) in Lloyds of London were done in years ago.

ezra said...

50 billion can cover the food stamps for the nation for one year.

is it interesting that the ACORN and affordable housing folks are keeping their head down that money that can go to help the people they are so concerned about is going to bail out rich developers?

Anonymous said...

Unfortunately, it has nothing to do with bailing out developers and everything to do with shoring up the financial system so that depositors don't run for their lives down to the nearest bank and shutter every bank in the world.

Basic banking economics mean 1 dollar of reserves for 20 dollars or more of obligations. All the money isn't sitting in a big vault somewhere waiting for you to cash your paycheck. When people freak, assets have to be sold at fire-sale prices, compounding the damage.

The worst thing about the latest government efforts isn't even the unfairness of using taxpayer money to benefit private companies, but that the private companies involved are not in the least bit chastened about being on the dole and continue to spend like drunken sailors. That is why everyone thinks they are insane, not good for public confidence.

A wave of public firings of top people, and enraged shareholders actually showing up for annual meetings is in order.