AIG: A Bottomless Money Pit?

[MannyGoldstein]

I'm starting to get concerned about the cash we continue to lavish on the welfare queens at AIG. Today marks the fourth time they've gone to the trough - I think we're approaching $200 billion poured onto that conflagration alone.

Does anyone know if there's any upper limit to this? Has any adult supervision been put into place?

(I won't bother asking if anyone has gone to jail, or if cash has been clawed back from the scum who fled with billions in their personal bank accounts - I think I know the depressing answers to those questions.)

[MercutioATC]

1. Starting?

Unless we start breaking up these companies and selling off the pieces, we're screwed.

We've already poured $120B into AIG and we just approved them for $30B more. As of Friday, AIG was worth, in total, $1.13B.

That's right, we're giving a company with a total market capitalization of a little over a billion dollars another THIRTY BILLION to keep them afloat.

[Narkos]

2. They're screwed due to their CDS debt

No amount of cash will save them.

[MannyGoldstein]

3. So We Just Have to Enjoy The Forced Sodomy?

This is so fucked.

[Narkos]

4. I think the Obama team knows the extent of the damage

and is just hoping that the system will come back to life at some point. I'm pessimistic at this point.

[MannyGoldstein]

5. And What If We Just Say No?

How bad would that be?

[w4rma]

6. These banks just need to be allowed to go bankrupt. (nt)

[DJ13]

7. Just like banks, nationalize AIG then write off the bad investments

Then break it up into more consumer friendly pieces and re-privatize those smaller entities.

The same problem that is creating further economic damage from the banks today is causing AIG to become an ever larger problem now.......... a lack of will by our political class (either party) to dealing with this crisis in the most expedient manner, which will end up redefining the ownership of these bad businesses in the end.

They would rather continue the fantasy that the same managements that created this disaster can fix it all so they can keep their high paying jobs.

Meanwhile we sink further in debt as a nation, and ultimately there wont be any choice......but we'll be far poorer for all the political foot dragging.

[Fovea]

9. its the only choice.

I am trying to imagine a private equity consortium coughing up a trillion dollars on the hope of squeezing enough soap and chalk out of AIG to make it somehow worth contemplating.

[Fovea]

8. Some clues here...

AIG (AIG, Fortune 500) is expected to report a hefty quarterly at 6 a.m. Monday, which reportedly could be as much as $60 billion. A big loss could trigger downgrades from rating agencies, which would force the company to post more collateral. At the same time, the insurer is suffering as rivals pursue clients and talented employees.

Also, with the global economy in recession, AIG has been largely unable to sell off enough assets to unwind the trillion dollar company in an orderly way -- the crux of the original bailout five months ago.

"It's in everyone's interest to keep the insurance units viable and operating, and it's in the financial market's interest to keep the non-insurance derivatives and guarantees above water," said Light. "I'd keep the insurance companies viable and in private hands and let the government handle the toxic stuff, which is not insurance-related."

http://money.cnn.com/2009/02/27/news/companies/aig_bailout/?postversion=2009022718

[truedelphi]

12. I guess it is "My Bad!" but I have a hard time

Imagining how it is that a firm like AIG has talented people!

[barb162]

14. The question is if they can sell off their insurance companies.

Other insurers can just pick off the business or AIG employees without buying the actual AIG companies. If that happens, then it becomes a real mess. The AIG subsidiary insurance companies are quite profitable unless insureds stop using them, the employees leave to go to profitable companies, etc.

[madrchsod]

10. sell off their core business to others..

time to get rid of this big pile of dog shit in the middle of the room

[barb162]

15. see post 14 n/t

[notesdev]

11. The upper limit

is how much they can steal before people march on Wall Street and the Capitol with pitchforks and torches.

[truedelphi]

13. How I envy those living in any Eutropean country where that is

Already happening