Comments on: AIG: Now that you own it, learn about it!

By: Katie

Katie — Mon, 22 Sep 2008 20:46:05 +0000

Cornelius
First off – you are obviously not reading properly – first sentence after :”How did it (almost) collapse” it states: “Like many other banks, AIG lost a lot on its mortgages”.
Secondly, my relative is the Canadian CFO so despite what you may have read through the media you do not have the right information. Most importantly they are not similar to Lehman Bros or Bear Sterns for the exact reasons you said I mentioned, and obviously they have to sell off some of their assets to pay of the bridge loan – and the airline sector of their business – they own the planes that they lease to companies – that subsidiary is worth over $5 billion dollars.
You can speculate all you want but the fact is the media is not aware (or not presenting) what is really going on so I guess I can’t blame you for not understanding the situation.

By: gmsc

gmsc — Fri, 19 Sep 2008 23:00:31 +0000

You know, the article would be much easier to read if you did have oversize ads for Dove covering the headline and first paragraph.

By: Lynne

Lynne — Fri, 19 Sep 2008 22:22:30 +0000

I bought 500 shares of AIG yesterday. I’m confident they will rebound.

The insurance part of AIG is secure. Other divisions and subsidiaries of the company, such as their airplane leasing part are the areas having problems. Hopefully the new CEO will lead them back in the right direction.

By: NicoNicoNico

NicoNicoNico — Fri, 19 Sep 2008 21:52:48 +0000

Thanks for the article! For people like me who are incompetent with the financial situation, it is a reassurance. With all the articles the media has put forth, it makes it seem so much worse than it is.

By: TheBear

TheBear — Fri, 19 Sep 2008 20:36:03 +0000

one thing which is not mentioned in most news articles or that people do not adequately consider. The Fed is loaning 85 Billion dollars to AIG, but where is that money coming from?

Most people seem to think that the either the government has an unlimited amount of money for these things, or that it has something to do with “the taxpayers”, neither is correct in this case.

The Fed plans to issue $100 billion worth of treasury notes to pay for this. All fine and dandy, except for the unthinkable.

All of the various companies that got into this mess did so by acquiring what they were told by the rating agencies was AAA debt, which they one day discovered nobody wanted to buy and they were stuck with.

What if, just what if one day, investors decide that they are no longer willing to buy more US debt? Where does that leave the Fed in their plans?

With uncontrolled budget deficits and a declining dollar, people may begin to question the true value of US debt.

By: Cornelius Starr

Cornelius Starr — Fri, 19 Sep 2008 20:04:29 +0000

Katie, what are you talking about? Your post is gibberish.

1) The first line of this post indicates AIG is an insurance company. I haven’t heard anyone refer to AIG as a bank.

2) Also, AIG has debt. In the form of insurance policies. If someone calls in a claim and AIG needs to pay that claim, thats a debt. AIG couldn’t raise the capital it needed to meet its debts, which is essentially bankruptcy.

3) you note: “Though yes they made a bad decision to enter into the mortgage and credit stuff they cannot be compared to any other company because they are global”
um, lehman brothers was a global company. So was Bear Sterns. Are you suggesting they can’t be compared to banks because AIG is not the one who made the shity loans, but rather they are the ones who insured the derivatives based on the those same shity loans?

4) Also, I’m not so sure you realize how Mr. Liddy plans on paying back our government’s loan, but its going to involve breaking AIG apart and selling off all the peices.

By: Marty

Marty — Fri, 19 Sep 2008 17:56:43 +0000

Here is a nice thought…when the Fed took over the failing Savings and Loans under the Resolution Trust Corporation, they actually made a profit in the end. It’s funny that we think the government is so incompetent with money, yet we accept the fact they need to come in and rescue/reform the financial industry.

By: Katie

Katie — Fri, 19 Sep 2008 17:23:53 +0000

Thanks for the article – though something that seems to have escaped everyone’s mind – AIG is NOT a bank! More importantly it is nothing like those other companies (mainly banks) that have gone into bankruptcy because it technically is not in debt – simply because of insurance laws and being downgraded they need to have a certain percentage of liquid assets in case they need to pay out claims. Though yes they made a bad decision to enter into the mortgage and credit stuff they cannot be compared to any other company because they are global – meaning if the Treasury had not bailed them out and they had declared bankuptcy (again only technically) analysts believe the fall out would have been similar to the Great Depression. Thanks at least for pointing out that the Treasury did not simply give AIG the money – which every news organization and most people leaving comments on other web sites seemed to completely miss mentioning! The newly appointed CEO is planning on paying back the loan in less then a year.

By: J

Fri, 19 Sep 2008 17:12:43 +0000

Great article.

I think the bailout will work but we (the public) will never see any of the money the government will ultimately make from the deal. I’m not a fan of bailouts but something had to be done in this case simply due to the impact a collapse would have had.