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The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.
These accounting questions are of interest not only because U.S. taxpayers are footing the bill at AIG but also because the post-mortems may point to a fundamental flaw in the Fed bailout: the money is buoying an insurer — and its trading partners — whose cash needs could easily exceed the existing government backstop if the housing sector continues to deteriorate.
of perhaps greatest interest to watchdogs — tens of billions of dollars to post collateral with other financial institutions, as required by AIG's many derivatives contracts.
"We may be better off in the long run letting the losses be realized and letting the people who took the risk bear the loss," said Bill Bergman, senior equity analyst at the market research company Morningstar.
American International Group Inc. spent US$440,000 at the St. Regis resort in Monarch Beach a week after the bailout, according to the Committee on Oversight and Government Reform in the U.S. I guess they figured since the American people were footing the bill, it was no big deal. Like a free vacation. According to the National Post:
Originally posted by jefwane
I'm not quite as up on insurance companies as I am banks and investment banks, but shortly after they got our money all hell broke loose. I'm willng to bet that they ended up having to pay out on some CDS that they insured, so it probably went poof!
Originally posted by Avenginggecko
Edit to add: Does anyone think this could tie in to the artificial disaster that Biden talked to test Obama if he is elected? I think he said something to the effect of, "We'll have a generated crisis within 6 months if Obama's elected" (paraphrase)
Originally posted by Maxmars
reply to post by GoalPoster
"Welcome to the real world Neo."
In fact, it is true that had PWC not pressured AIG they would have been able to conceal their mismanagement a short while longer (enabling them to screw even MORE people.)
However, PWC's behavior was just as questionable. They had many opportunities to 'blow the whistle' on deals like this AND OTHERS, but they remained silent because, THEY ARE ALL CONSPIRATORS IN THE SAME GAME.
We live in a world where it is unacceptable for anyone to publicly disclose the 'nature' of fractional reserve lending, and the fiat currency that our sleazy monetary policy conceals from the tax-payers, who are subject to a mafia IRS. If you are a public figure, the minute you go there..., you're somehow silenced and 'erased' from public memory (RIP Aaron Russo).