A.I.G. Seeks $40 Billion in Fed Aid to Survive

[FourScore]

Source: NYT

The American International Group is seeking a $40 billion bridge loan from the Federal Reserve, as it faces a potential downgrade from credit ratings agencies that could spell its doom, a person briefed on the matter said Sunday night.

Ratings agencies threatened to downgrade the insurance giant’s credit rating by Monday morning, allowing counterparties to withdraw capital from their contracts with the company. One person close to the firm said that if such an event occurred, A.I.G. may survive for only 48 hours to 72 hours...

SNIP

...J. C. Flowers & Company, a buyout firm focused on financial services firms, offered $8 billion for a stake in the business that would have given it an option to buy all of A.I.G. down the road. Kohlberg Kravis Roberts and TPG also said they would bid.

But all three withdrew at the last minute, citing anxiousness over the company’s precarious financial health...



Read more: http://dealbook.blogs.nytimes.com/2008/09/14/aig-seeks-fed-aid-to-survive/index.html?hp

[Bob Dobbs]

1. Let them die.

Good money after bad.

[wordpix]

10. that's what I say

[soleft]

11. thanks

[Frank Cannon]

25. Free hand of the market, and all that other right wing BS

Funny how it never applies to them.

[bluestateguy]

2. In other words, welfare

nt

[wordpix]

9. yeah, welfare for the Fannie Mae chief stepping down with a $10-20 million severance

:grr: These guys ought to be in jail, not stepping down with a huge sendoff gift like that.

[neverforget]

3. All of the sudden the free market is at the government trough looking

for some slop from the taxpayer to bail their ass out. Privatized profit-socialized losses.

[wordpix]

8. where will this end? US taxpayers don't have the $$$---we're $10 trillion in debt

I'm picturing paying the Chinese to go up the Washington Monument while the Saudis charge for entry to Smithsonian museums.

[neverforget]

14. Bernanke will just print some more money.....

We're fucked

[greyghost]

23. No he won't, he knows that its futile. You are correct about us

being FUCKED however.

[slipslidingaway]

4. K&R n/t

[mrJJ]

5. USA! USA! WE'RE NO. 1

c&p from another du user

USA! USA! WE'RE NO. 1 ! Our currency reserves are better than ... Botswana? Maybe? Kinda?

US foreign currency reserves have sunk to about $72+ billion, according to the International Monetary Fund (IMF).

The southern African nation of Botswana's foreign currency reserves stand at about $6 billion.

Yeah! USA! USA! WE'RE NO. 1 ! Our foreign reserves are about 10 times bigger than Botswana's !!

Oh yeah. Botswana is a nation of 1.8 million people, while the US is a nation of about 300 million people -- there are 166 times as many Americans and there are Botswana citizens.

Which means that on a per capita basis (per person), Botswana's foreign currency reserves are $3,277 while on the same basis ours are about $250 -- so the Tswana have have 13 times the foreign currency reserves per person we have.

OK what about a more suitable match up? How about USA versus Greneda! Oh wait, we already kicked their asses.

What about Hong Kong? I read somewhere that their foreign reserves are falling! Yeah, Go USA! Ooops, they were falling by a billion or so, but they were up at the end of August by $400 million and currently stand at $158.1 billion.

That's Hong Kong.

Not China.

Hong Kong, with its population of about the same size as New York City, has twice the foreign currency reserves of the entire U S of A. (China of course has around $1.8 trillion, about 23 times as much foreign reserves as the US).

Of course, a small country like Botswana, or a city-state like Hong Kong, or a big third world factory town like China, have to save foreign currency because they need dollars. We make our own goddamn dollars, thank you very much, and as long as the world accepts our manufactured dollars for their manufactures, we don't need no stinkin foreign currency reserves.

Oh wait a minute. If Freddie and Fannie default on the several trillion dollars worth of mortgage backed securities and other debt instruments, the world probably won't accept dollars any more.

Well, if so, we've always got that $72 billion or so in foreign reserves

Does that mean were screwn?

[halobeam]

6. USA getting POW'd... in MORE ways than one! OMG.

[wordpix]

7. Bridge Loan to Nowhere - one problem is AIG kept upping their premiums on good customers who

never had an insurance claim. People like me. So I went elsewhere and I'll be many others did, too. :nopity:

[FourScore]

13. "Bridge Loan to Nowhere" -- great line! n/t

[greyghost]

12. Privatized profit-socialized losses. I'm so happy the collapse is

happening now instead of after the election. The house of cards were going to collapse any way, better sooner than later.

[alittlelark]

15. Drip, drip, drip.....

.....sigh.

[madrchsod]

16. when this company goes under it`s going to be felt worldwide

why in the hell do we have to bail out a company that has global operation divisions. if they are so important why is`t the european and asian countries chipping in?

it`s a shame we do not have anyone in charge of this situation....

[Purveyor]

17. AIG is a insurance entity. How the hell can it go to the Federal Reserve and expect a 'bailout'? nt

[lisa58]

18. This is very serious...

...this is the biggest casualty company in the world. Things could happen - how about $20,000 a year for homeowners insurance if you live in Florida or on the Gulf Coast?

How about losing 1,000,000 jobs because you can't get workmans' compensation insurance.

Industries can close because they will not be able to compete with foreign countries.

Hank Greenberg, who did it all, has his money down in Bermuda in Starr Associates will not be hurting - it's the small investors who will suffer - according to plan, apparently.

[Tutonic]

19. Ok who the hell is left? AMWAY?

[MetaTrope]

20. Didn't AIG get a federal handout after 9/11 too?

[Hannah Bell]

21. I thought Berkshire Hathaway was heavy in AIG? & whatever happened with the fraud investigation

at the start of this year?

http://www.msnbc.msn.com/id/22507302/

[greyghost]

22. In the immortal words of Don Meredith; "Turn out the lights the

party is over, it seems that all good things must end."

[DeltaLitProf]

24. There goes my retirement money

I should have put it into TIAA-CREF, but I *had* to put it into AIG mutual funds. YaY me.

[Politicalboi]

26. AIG, BCCI

All had part in Kroll security and Kroll had a contract to secure the WTC Let them die. This just may be a bribe for all they did. Watch who killed John O'Neill

http://video.google.com/videoplay?docid=-3857917663523144457

[UK populist]

27. If there is one American company I don't to collapse yet it is this one

I know this is selfish but I am a Manchester United supporter and AIG owe United a lot of money as they are United's main sponsor. Lets just get some of that Corporate Fascism going just in this one cases until the contract runs out. Plus does anybody know how badly the the Glazer family might be hit by all these collapses ?

[salin]

28. If my tax dollars and future hiked tax dollars (as we can't keep spending

at this rate without large future tax hikes) what do I/and or our country get in return, financially. I have never been a "nationalize" advocate but the rate at which companies want public bailouts is getting absurd. Make them give a part of control and some form of profit sharing ought to start being part of the conversations.