AIG Seeks More US Funds As Record Loss Looms

AIG Seeks More US Funds As Record Loss Looms

www.cnbc.com

All of this adds up to a huge headache for the Federal Reserve and Treasury, which have already provided over $150 billion of assistance to AIG.

The problem is that the government's ownership stake cannot exceed its current 79.9 percent, leaving officials to try and find a creative way to transfer value to the US in exchange for AIG reducing its debt so that it can then borrow more from the government to meet its collateral calls.

(visit the link for the full news article)

So AIG needs more money? The Fed is going to have to come up with creative ways to give them more. It seems they can't let AIG go down, as they have other companies, due to the fact that it would expose all the fraud that has happened in mortgages?

They don't have the money to keep operating after Monday.

American Insurance Group, the insurance giant that is 80-percent owned by the US government, is in discussions with the government to secure additional funds so it can keep operating after next Monday, when it will report the largest loss in U.S. corporate history, CNBC has learned.

So it is going to report the biggest loss ever? and the govt. will keep giving taxpayers money to the company, that is dying? Besides having to be creative with it? Will they just take over the company and make it a "national" company?

They really must be worried about what would come out if AIG fails, I bet it would even affect our relationships with other countries. Those countries that bought our mortgages due to being "insured" by AIG, if there was massive fraud that was bypassed by SEC people (as it seems they looked pass lots of others - Madoff).

AIG has borrowed roughly $40 billion from a $60 billion credit facility provided it by the Federal Reserve Bank of New York. If it can find a way to pay that down by swapping equity, it hopes to take it back up to a level that will allow it to meet its collateral and capital calls.
AIG's board is scheduled to meet this Sunday night in hopes of hammering out an agreement with the government. But in case it can't, AIG's lawyers at Weill Gotschal are preparing for the possibility of bankruptcy.

That seems unlikely, but last November, the government took control of many of AIG's credit default swaps and so a bankruptcy of the holding company might not pose the systemic risk it once did.

AIG officials have not offered comment, though a source told Reuters that the company has no plans to file for bankruptcy. Officials at the Federal Reserve Bank of New York have not returned calls.

Of course they won't file for bankrupcy, billions more will be poured into it, one way or another. AIG is too much of a liability of the whole mortgage mess, they are the center point of it all.






www.cnbc.com
(visit the link for the full news article)

WHERE IS ALL OF THIS *SNIP* MONEY?!?!? It has to have gone SOMEWHERE, right?!!?!?? This is absolutely ludicrous. I can't understand how there have not been any organized protests in Washington. This makes me want to vomit.


Mod edit: Profanity.

[edit on 2/23/2009 by Hal9000]

where has the money gone?........its all around you theres to much money in the world but thats another topic....


With this AIG could collapse and i think this might just send the banking system over.....toyko is down -130 at the time of writen this, Going to be another Bloody day

The Derivatives held by these companys and banks will overwhelm the Gov't at some point. Hundreds of Trillions is just too big for anyone. They've already done untold damage to the country by trying to monetize debt.

What in the name of common sense is going on here.AIG has already cost the taxpayers billions on top of billions of dollars. Heads need to roll!!!
There must be some really incriminating paper floating at AIG. Something that the FED wants to keep hidden.There is no other reason I can think of to keep flushing tax money down the AIG drain.

There needs to be public outcry,and Congressional hearings about this BS. Enough is enough!

I think we should give them more money..it's fun.

Maybe the government will take over AIG completely. Then they can stop actually asking for it and just take it.

Sounds like a plan to me.

reply to post by David9176



They may have to. AIG is the place where the "secrets" are hidden regarding the whole financial mess.

AIG was the one, that allowed all the banks to give mortgages, though they didn't have the money, the mortgages were "insured" by AIG.
If you pay PMI insurance, that money goes to AIG. Too many shady things happened, that the elite have to keep hidden from view, especially since our mortgage mess, has been what has caused other countries to be in a financial mess and meltdown. They sold those mortgages based on being insured and being AAA. A complete falsehood, which starts with AIG.

reply to post by questioningall


The nastier things get, the more we'll find out.

Whenever a great scheme starts to fall apart the info is usually leaked and I guarantee, when the public finds out, there will be hell to pay.

People I know have just about had enough of everything. They want answers and most of all they want this whole fiasco to come to an end.

I think we'll find out...I don't know how long it will take...but I think we will. Too find out this information though..it's gonna all have to come crumbling down and I think it will.

Just my opinion.

reply to post by David9176



I agree, they have to keep scrambling to keep the pieces together.

I firmly believe that truths will have to come out at some point. I also believe as the melt down continues - many whistleblowers will come out with truths about lots of things, because they won't be able to be paid off etc. As the year goes, I believe the American people who have looked no further than the MSM will be completely shocked at "truths" that are revealed. But all of us, will be sitting back just waiting for it, because we will have spent the time learning, instead of denying and hiding our heads.

I much prefer being aware, than being blindsided, with information.

I assume this continues to be about credit default swaps. What percentage of AIG's losses come from this problem? I'm not sure that the money involved in CDSs is real money. It's a bet about what will or won't happen. joe buys a house and gets a mortgage; jane buys a house and gets a mortage. jack buys a house and gets a mortgage; jill buys a house and gets a mortage. the bank bundles together joe's and jane's and jack's and jill's mortgages which is a lot of money with interest included, and sells this bundle to me. I don't know joe, jane, jack or jill so I'm a bit concerned that they might not pay off their mortgages. AIG does insurance, so they agree to insure this bundle for some period of time, like 5 years. If j, j, j, & j pay as agreed then fine, i earn all this money. if they don't pay then i get the agreed upon insurance money from AIG. Of course in the meantime I might have needed to liquify my assets so sold my bundle to someone else, which is allowed. This, I believe, is what Credit Default Swaps are. They are these agreements between me, owner of the bundle, and the insuance company. Yes, I paid the insurance premium, but the insurance claim is always a lot more, something resembling the volue of what I would have made off that bundle id I'd kept it and it hadn't defaulted. The only real moey was what the bank gave the house buyer, and the money I paid the insurance company. The huge amount AIG promised me never really existed, did it? I realize this is over simplifying things, but I would really like to know. If you multiple all these huge amounts AIG promised to pay, then it's an ultra huge amount, but they never had this money. they were just betting that they would never have to pay it all, right? Though if the houses get forclosed on, who get the house?

Where did the money go?

Why to China and London and other foreign investors, don't you remember? Here's the video



The Market Ticker just did a write up on this, and it gives a wonderful history of AIG as a bonus.

Read it then go grab your pitchforks and torches!

reply to post by questioningall


Agreed. It's actually happening now. Much of this info was already there, some of just didn't see it.

Redhatty, for instance, and others have been bringing out lots of information that is finally starting to show the cracks in the big block of lies.

I have my pitchfork....do u have yours?

reply to post by redhatty


Great vid Redhatty!!

Good information, that I did not know, I am surprised that was on a MSM channel.

reply to post by questioningall


That was from October of last year - when the Bailout was headlines.

Amazing what they admit and most people miss, isn't it?

reply to post by redhatty


I actually remember this video redhatty.

I forgot about it though. There has been such a flood of information coming down the wire since this whole thing started that it's been tough keeping track of everything. Sometimes it's almost as if we are being flooded with this info on purpose to make things less apparent.

Also...i've been wanting to ask you..

What is the general opinion of the people you talk with on the market ticker forums?

Do they all feel the SHTF soon? What is the general consensus on that..if you know?

Originally posted by David9176
What is the general opinion of the people you talk with on the market ticker forums?

Do they all feel the SHTF soon? What is the general consensus on that..if you know?

Over at TF, we still wonder when the final straw will cross the camel's back.

We know it's coming. What comes AFTERWARDS is what really scares us.

EVERYONE there is stocking up on canned good, ammo, a bit of gold seems to be popular too, as a hedge.

Keeping a healthy supply of cash on hand in preparation for the "bank holiday" that many feel is inevitable.

It's not so much that the US is going to implode, that seems set in stone now - it's what comes afterwards - will we go Mad Max? Or will we end up with a new "Hitler"? Or will we all learn to speak Chinese to get our soup in the soup lines.

Protests are being organized - the FedUpUSA thread is ALWAYS open, even when the general board is shut down for heavy trading days, as is the Today's Ticker thread.

A few people have started to pull out of the market completely and go to all cash. I think I am going to be one of them in the next couple weeks, it's just not fun to play this market - too depressing to make a profit over the implosion of my country.

But on the bright side (lol) we are always watching for the next stick save to see if it really creates a rally that lasts. We hope, but we know that hope is in vain.

Any specifics you looking for that I didn't touch on?

reply to post by redhatty

Any specifics you looking for that I didn't touch on?

Karl Denninger for instance, i'm guessing he's a big stock trader? He feels this way as well? I'm asking because I figure that most who are "in the know" in the stock world probably have a better indication of what may be coming.

You know that I fear we are in for some very bad times, I guess I'm just looking for verification on it or maybe some hope that we're all wrong.

I've also started to buy extra food as well. It's better to be safe than sorry.

I admit I don't know much about stocks which is why I wanted to ask you these questions.

Thanks red.

reply to post by redhatty

It's not so much that the US is going to implode, that seems set in stone now - it's what comes afterwards - will we go Mad Max? Or will we end up with a new "Hitler"? Or will we all learn to speak Chinese to get our soup in the soup lines.

Sigh...i picked THE WORST POSSIBLE TIME to have a kid man.

Once again...my impeccable timing shines through!!!

If it goes mad max...i hope it's the third movie...a least the world is starting to get better in that one.

Scary times red..

reply to post by David9176


Best way to gage Karl is by reading The Market Ticker - that link has the 3 most current tickers and links to the archives.

Plus on Mondays at 3:30 Central Time, he has an internet radio show, previous episodes are available there, and he takes calls and answers your questions.

Karl is a VERY smart man when it comes to economics, but at this point, it doesn't take a whole lot of grey matter to see where we are headed.

I would recommend catching his show next week, calling in and asking him what he thinks