MarketWatch: More than Half of AIG's value is gone

[marmar]

AIG slumps as insurer rushes to raise capital
Company gets access to $20 bln in assets from insurance subsidiaries

By Alistair Barr & John Spence, MarketWatch


SAN FRANCISCO (MarketWatch) -- American International Group Inc. lost more than 60% of its market value Monday as the giant insurer rushed to raise capital and stave off ratings downgrades that could threaten its survival.

The slump in the stock helped push the Dow Jones Industrial Average down more than 500 points, its biggest one-day drop since the market opened in the wake of the Sept. 11, 2001, terrorist attacks.

AIG has been granted access to $20 billion of assets that are currently held by its insurance subsidiaries, New York State Gov. David Paterson said at a news conference.

The move will allow AIG to use those assets as collateral to borrow cash to fund its day-to-day operations, according to Paterson.

He also said that New York's insurance commissioner, Eric Dinallo, is at the Federal Reserve Bank of New York Monday to ask if the federal government can support AIG to make sure the company has enough financial resources to work through its current problems.

Morgan Stanley has been hired by the Fed to advise on AIG's options and the potential role of the government in assessing systemic risk in the market, according to a person familiar with the situation. ......(more)

The complete piece is at: http://www.marketwatch.com/news/story/aig-slumps-insurer-rushes-raise/story.aspx?guid=%7BF3C3CF29%2D5FD9%2D48E7%2D82A9%2D8EE035691B83%7D

[nadinbrzezinski]

1. my tummy is just doing summersaults

[Old and In the Way]

2. It's a brave new world that's unfolding....

no one knows where this is going to go. There's nothing in the Treasury to deal with this and what we don't know is how this will impact the stock markets. In spite of what Republicans and McCain won't us to believe, we really don't know how this is going to play out.