BREAKING NEWS: AIG will get a government bail-out....

#1
rjd970

rjd970

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#1
The government just approved an emergency rescue fund of $85 Billion to AIG.
 
#2
#2
Absolutely ridiculous. I would appreciate it if the Fed would just let these businesses fail. Bailing them out sends the message to the rest of the industry that it is ok to take huge risks, because in the end the gov't will bail you out for the overall good of society (does that sound a little socialist to anyone else?)
 
#4
#4
I say let them fail. We'll be creating 50,000+ green jobs in the next 4 years anyway, it will all work itself out.
 
#7
#7
I have an open challenge to any one who can name any government program that is 19% adequate.....
 
#8
#8
writing insurance against mortgage portfolios is hardly huge risk.

If the fed weren't driving these writedowns and didn't have a huge hand in the overvaluation, their tack might be different. Given that many of the losses are regulator induced capital hits, I think this is probably the correct response.

It will also shore up how these CMBS issues look goim forward for the big players, at least from an ongoing risk perspective.
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#9
#9
I agree with all the posts...let them fail and the free market will work itself out. Although it looks like some very limited regulation of some of the markets could have avoided this.
 
#10
#10
rjd970 said:
I agree with all the posts...let them fail and the free market will work itself out. Although it looks like some very limited regulation of some of the markets could have avoided this.
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what kind of regulation? we're talking about the residential mortgage market, right?
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#16
#16
Privatizing profit and socializing losses...yippee. Unfortunately, letting AIG fail would have been for more negative than CW, Bear, or Lehman.
 
#17
#17
therealUT said:
Absolutely ridiculous. I would appreciate it if the Fed would just let these businesses fail. Bailing them out sends the message to the rest of the industry that it is ok to take huge risks, because in the end the gov't will bail you out for the overall good of society (does that sound a little socialist to anyone else?)
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Amen, but probably not for the reasons most of you think. If you held AiG preferred stock, you could have expected $29.00 per share when the company was liquidated in bankruptcy. With the federal liens now taking priority over all shareholders' interests there will be a pitance, if anything, left over once the government is paid back. Someone is making a crapload of money off of this at the expense of long time preferred shareholders who have weathered a long storm under the assumption that they would have first priority if the company was ever broken up.

notverycrucial said:
AIG is fundamentally sound. :)
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The insurance business is better than fine turning annual profits in the billions. I won't be the least bit surprised if Berkshire Hathaway picks up American General for a nice price.
 
#18
#18
VolunteerHillbilly said:
Amen, but probably not for the reasons most of you think. If you held AiG preferred stock, you could have expected $29.00 per share when the company was liquidated in bankruptcy. With the federal liens now taking priority over all shareholders' interests there will be a pitance, if anything, left over once the government is paid back. Someone is making a crapload of money off of this at the expense of long time preferred shareholders who have weathered a long storm under the assumption that they would have first priority if the company was ever broken up.

The insurance business is better than fine turning annual profits in the billions. I won't be the least bit surprised if Berkshire Hathaway picks up American General for a nice price.
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The preferreds will likely end up whole. There isn't a snowballs chance in hell that this agreement doesn't have an earnout provision whereby AIG can essentially buy back what's sold at face value of the investment plus return, plus premium.

American General will only go to Berkshire to the extent that there's something in it for the AG folks.
 
#19
#19
BigPapaVol said:
The preferreds will likely end up whole. There isn't a snowballs chance in hell that this agreement doesn't have an earnout provision whereby AIG can essentially buy back what's sold at face value of the investment plus return, plus premium.

American General will only go to Berkshire to the extent that there's something in it for the AG folks.
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I hope it works out that way, and if I can afford it I will try and have some dividend eligible interest in whatever holding company winds-up with AGLA.
 
#20
#20
This is B.S. the company was mismanaged it should go under. This is like communism where everything is govt owned.
 
#21
#21
oklavol said:
This is B.S. the company was mismanaged it should go under. This is like communism where everything is govt owned.
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do have any idea how the company was mismanaged?

do you know why the former CEO had to go away?

Do you know the root of the problem?
 
#22
#22
VolunteerHillbilly said:
Amen, but probably not for the reasons most of you think. If you held AiG preferred stock, you could have expected $29.00 per share when the company was liquidated in bankruptcy. With the federal liens now taking priority over all shareholders' interests there will be a pitance, if anything, left over once the government is paid back. Someone is making a crapload of money off of this at the expense of long time preferred shareholders who have weathered a long storm under the assumption that they would have first priority if the company was ever broken up.

The insurance business is better than fine turning annual profits in the billions. I won't be the least bit surprised if Berkshire Hathaway picks up American General for a nice price.
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ummmm the preferreds wouldn't have gotten crap if they declared bancruptcy. that is why the largest AIG preferred was trading at $4 a share yesterday. this is a far better option for the preferreds. the bond holders would have owned the company. the preferreds woudl have got what was left over, which probably wouldn't be much. probably nothing
 
#23
#23
oklavol said:
This is B.S. the company was mismanaged it should go under. This is like communism where everything is govt owned.
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the shareholders are screwed and management got fired. how are people not being punished exactly?
 
#24
#24
droski said:
ummmm the preferreds wouldn't have gotten crap if they declared bancruptcy. that is why the largest AIG preferred was trading at $4 a share yesterday. this is a far better option for the preferreds. the bond holders would have owned the company. the preferreds woudl have got what was left over, which probably wouldn't be much. probably nothing
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They did not bother to point that out in the disclosure statement I re-reviewed yesterday. I am hearing that there is a possibility the Feds will continue to allow dividend payments so I guess that's something.
 
#25
#25
droski said:
the shareholders are screwed and management got fired. how are people not being punished exactly?
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I don't think this is proper use of taxpayer money to bail out mismanaged private corporations. It's a very bad precedent. Not the right message to wall street.
 
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