AIG won't say it needs no more aid

[struggle4progress]

By Pallavi Gogoi, USA TODAY

As head of a company that has taken the largest financial lifeline from U.S. taxpayers, Edward Liddy knows best if the assistance so far will be sufficient. But American International Group's (AIG) CEO admits that given the choppiness of financial markets, he can't assure that AIG will not dip into government finances again. "I wish I could say yes," Liddy said Tuesday in an interview with USA TODAY.

On Monday, AIG reported its worst quarterly loss ever: $24.47 billion for the third quarter of 2008. It also accessed U.S. government funds for the third time — getting $40 billion from the U.S. Treasury in exchange for preferred shares, raising the U.S. government's stake in AIG to more than $150 billion ...

Not everyone is convinced taxpayers will come out ahead. "Whenever the government thinks it has a handle on AIG, the problems get greater … even AIG cannot model its own risks," says Richard Burson, professor of finance at Wharton Business School. That's because it has become extremely difficult to value the complex derivatives debt business that AIG got into, and the company has had to pony up billions in cash in recent weeks.

"The announcement of Bailout Two for AIG is an admission that Bailout One did not work," says Donald Light, senior analyst at Celent, a financial research and consulting firm ...

http://www.usatoday.com/money/industries/insurance/2008-11-11-aig-resort-liddy_N.htm

AIG's Losses Lead Insurers as Tally Nears $1 Trillion (Update1)
By Erik Holm and Stephanie Luke

Nov. 11 (Bloomberg) -- American International Group Inc.'s losses from the collapsing mortgage market account for almost half the $123.6 billion inflicted on North American insurers, helping push the tally for the world's biggest financial firms toward the trillion-dollar mark.

AIG, which posted a record third-quarter loss yesterday, accounts for $60.9 billion of the writedowns and credit losses. Bond insurer Ambac Financial Group Inc. is second among the insurers with $10.6 billion, and life insurer MetLife Inc. is third at $7.2 billion. The industry losses are three times as costly as Hurricane Katrina, the worst natural disaster in U.S. history.

The falling value of holdings tied to U.S. mortgages contributed to net losses at 15 of the 24 companies in the KBW Insurance Index in the third quarter, and prompted North American insurers to raise more than $83 billion to replenish capital. New York-based AIG helped increase the total of losses among financial companies worldwide to more than $919 billion.

``We have a really big investment base, and if those assets continue to deteriorate in value, we could continue to suffer losses,'' AIG Chief Executive Officer Edward Liddy said in a Bloomberg Television interview yesterday. ``We don't think that will happen, but you just never know what will happen in the marketplace'' ...

http://www.bloomberg.com/apps/news?pid=20601103&sid=aqaXBx8Ogdxw&refer=us

Large AIG holders keen for government to scale back stake

By Lilla Zuill

NEW YORK (Reuters) - Some of AIG's largest shareholders are working to convince federal officials to scale back U.S. ownership of the giant insurer as private investors step forward to inject capital, a lawyer representing investors said on Tuesday.

Mickey Kantor, a partner with Mayer Brown based in Washington D.C., said the U.S. Treasury and Federal Reserve had taken a "step forward, and deserve a tremendous amount of praise" for a deal reached on Monday that revised a September rescue of American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) as it neared bankruptcy.

The shareholders Kantor represents had been pushing for revisions since the federal government stepped in to inject $85 billion in emergency funds on September 16 in exchange for a nearly 80 percent stake ...

.. Kantor told Reuters .... "That would mean the Fed and Treasury would negotiate some sort of agreement. To the extent that private capital is raised, they lower the percentage of AIG held by the federal government. That is what we are working toward."

http://www.reuters.com/article/ousiv/idUSTRE4AA7DO20081111

[aquart]

1. Needs shiny new cheap executives.

Let the others go out and try to find jobs in the market they created. May they lose their homes.

[Arctic Dave]

2. Reading this makes my stomach queesy. Ugh.

[Demeter]

3. I Don't Understand AIG or Its Stockholders

Why do they cling so tightly to a company that has manifestly failed, whose parts are worth more than the sum?

I don't understand Paulson. He has no hesitation in shutting down less financially compromised banks and letting the auto industry die. Why is AIG so worthy of redemption that we're doing an Iraq War on them?

WHAT ARE THEY HIDING, AND WHY CAN'T SOMEBODY CALL THEM ON IT???!!!!

[Why Syzygy]

4. It's a shell game.

And our legislators are fools for playing.