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Ear to the Ground

Bigger Bailout Expected for AIG

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Posted on Mar 1, 2009
Flickr / reubenaingber

The government is expected to come to AIG’s rescue for a fourth time as the mega-insurer prepares to announce the biggest quarterly loss by a single company in the history of the world. Reports put the bonus bailout at $30 billion, less than half of AIG’s expected quarterly loss.

New York Times:

The federal government is preparing to loosen the terms of its huge loan to the American International Group and provide another $30 billion to the insurer as it prepares to report the biggest quarterly loss in history on Monday, $62 billion, people involved in the discussions said Sunday night.

The intervention marks the fourth time that A.I.G., the giant insurer, has had to seek assistance from the federal government. The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets.

The deal would have the government commit another $30 billion in cash to A.I.G. from the Troubled Assets Relief Fund, should the company need it, according to the people involved in the talks.

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By #12345, March 10, 2009 at 4:49 pm Link to this comment
(Unregistered commenter)

AIG is in the insurance business, n’est pas.  Did it insure slices of those subprime loans marketed by Wall Street, sold/bought by big banks.  Did the govt just buy both sides of those deals for us…

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By Stephen Smoliar, March 2, 2009 at 1:51 pm Link to this comment

The scary thing about digging down to the cause of this mess is that it reveals what constitutes “normative practices” in the financial sector:

http://therehearsalstudio.blogspot.com/2009/03/todays-mess.html

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By Tom Semioli, March 2, 2009 at 11:58 am Link to this comment
(Unregistered commenter)

STEVE E. Fool me once, shame on me, fool me twice, and we won’t get fooled again.

BTW: The country is already bankrupt!

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By msgmi, March 2, 2009 at 11:35 am Link to this comment
(Unregistered commenter)

The CEOs who have led AIG et al into the financial meltdown remain in place yet another day as the gov’t pours additional billions into the chcanery mess. If such hubris were to be practiced and exposed in the back alleys of Main Street, the perps would have been dealt with as soon as the whispers of chicanery were heard. Wall Street culture is different, ponzi schemes and profits have no room for rules.

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By artie, March 2, 2009 at 10:05 am Link to this comment
(Unregistered commenter)

Goldman Sachs trained many a swindler- Greenspan, Greenberg, Rubin, Bernanke, Paulson, etc. None has been indicted- it was all legal!!! They all will be given billions in bonuses for their greed, curtesy of our children and grandchildren. Obama will bankrupt the country within three years.

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Eric L. Prentis's avatar

By Eric L. Prentis, March 2, 2009 at 9:11 am Link to this comment

AIG is an impediment to our economic recovery, let this stinking corpse finally be buried.

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By Steve E, March 2, 2009 at 2:03 am Link to this comment
(Unregistered commenter)

How does it go? Fool me once——

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By Chris, March 1, 2009 at 11:16 pm Link to this comment
(Unregistered commenter)

>And where is the government going to get this paper they call money?<

Borrowing tons of it from China until they, and the rest of the world, figures out America is no longer worth loaning money to which is a scary possibility.

60 minutes’s Scott Pelley recently did a piece on another oncoming foreclosure crisis regarding prime mortgages. Apparently prime mortgages weren’t immune from “creative loaning” mechanisms. More depressing is that it appears there is a looming crisis in regards to commercial real estate and credit cards. This has been mentioned by Gerald Celente, Nouriel Roubini, Peter Schiff and others. Schiff actually joked that with the endless bailouts occurring that people should just max out their cards because the credit card companies are going to get a bailout just like every one else.

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By BlueEagle, March 1, 2009 at 7:09 pm Link to this comment

Thank you Democrats for continuing Bush’s failed policies. I wonder if there are any people out there that still think there is a difference between Bush’s and Obama’s policies.

And where is the government going to get this paper they call money?

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