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NEW YORK (Reuters) - American International Group, rescued twice last year by the U.S. government, is asking for more aid and bracing for a fourth-quarter loss of roughly $60 billion, a source familiar with the matter said. It would be the biggest loss in a quarter in corporate history.
The $60 billion would exceed Time Warner's $54 billion single-quarter loss in 2002 and dwarf the $24.5 billion loss AIG posted in the third quarter, when the government increased its rescue package for the insurer to about $150 billion.
By contrast, two analysts polled by Reuters Estimates have forecast on average a net loss of $5.46 billion.
The latest round of talks with the government include the possibility of additional funds for the insurer and trading debt for equity, another source said on Monday.
The situation is fluid and other options are being discussed, this second source said, adding that it was unclear where the talks would lead.
AIG said last week that the change in estimated losses came after its auditor, Pricewaterhouse-Coopers, noted a “material weakness” in AIG’s internal control over the financial reporting and fair valuation of the CDS portfolio, which is held by its subsidiary, AIG Financial Products. The AIG subsidiary writes CDS on the super-senior tranches of CDOs on residential mortgage-backed securities. AIG underwrote a little over $500 billion in super-senior CDS, mostly on securities such as corporate loans, but also including some $78 billion related to CDOs, which have some exposure to subprime and have been losing value.
Originally posted by marg6043
reply to post by sad_eyed_lady
The last time I advocated for firing squats for our elected officials I was told by a member that called itself "watchdog in the board for the Secret service" that I would be deal with.
I wonder what happen to him or her.