AIG may have zero equity value: Citigroup

[Joanne98]

BANGALORE (Reuters) - American International Group Inc (NYSE:AIG - News), the insurer rescued by a series of federal bailouts, may have zero equity value due to the risk of more credit default swap losses and the disposal of key assets at low valuations, Citigroup said.

Shares of the company fell 22 percent to $10.22 in early trade Thursday on the New York Stock Exchange. The shares have lost more than 90 percent of their value in the last year.

Potential markdowns in AIG Financial Product unit's regulatory CDS portfolio may result in collateral calls that would again put pressure on AIG's liquidity, Citigroup analyst Joshua Shanker said.

"Such collateral calls could also pressure rating agencies to lower their credit ratings for the company, leading to a similar cycle to the one that the company experienced prior to the massive government intervention in the third quarter," Shanker wrote in a research note.

Last month, AIG revised its 2008 annual report to add a new risk factor that shows it may recognize valuation losses on a CDS portfolio if credit markets continue to deteriorate.

At issue is a super senior CDS portfolio held by AIG Financial Products with a notional value of $192.6 billion as of March 31, 2009.

http://finance.yahoo.com/news/AIG-may-have-zero-equity-rb-3438036954.html?x=0&sec=topStories&pos=7&asset=&ccode=

Citi calling AIG worthless. That's funny!

[no_hypocrisy]

1. And y'all know what THAT means:

MORE BONUSES!!!!!

[DCKit]

2. I thought it was common knowledge that AIG's bailout $$$ went straight to...

the banks and Wall St. corporations that bought their worthless paper to begin with.

I seem to recall that certain Wall St. players (who are, coincidently, about to declare another round of record profits) were the main recipients.

Too woo-woo for Rupert's rags to print, I guess.

[Wednesdays]

3. K&R

:kick:

[TheWatcher]

4. Who would know better than an Insolvent Entity who ITSELF has no equity value.

Pot, Kettle, PERIOD.

[ixion]

5. exactly... Citibank is just as insolvent

[TheWatcher]

6. They have been insolvent for MONTHS. But you can't really convince most of that.

Those "Phantom Profits" they keep telling you about were created by Mark-To-Make-Believe Accounting.

But most Americans will just giggle, gurgle, snicker, and say it doesn't exist, because they didn't see it on TV.

I have gotten to the point where I believe a frighteningly large percentage of Americans simply cannot think for themselves, and do not have the mental capacity to do so. it is the only way I can explain the disconnect and total ignorance they have for the OBVIOUS.

[DemReadingDU]

7. many people do rely on others to think for them

but in my family, they just have other priorities so they leave the management of their money to their professional financial planner.

:eyes: