Starr International Files $25B Suit Against U.S. Over AIG Takeover

By | November 21, 2011

  • November 21, 2011 at 1:40 pm
    Az ins man says:
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    Go Hank go! That makes sense but Obama thinks he is “king” and can do
    WhAtever he wants. Impeach him as well

    • November 21, 2011 at 2:06 pm
      D says:
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      Hey genius. This deal originated under the Bush administration and designed by Henry Paulson then Treasury Secretary.

  • November 21, 2011 at 1:42 pm
    earlybird says:
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    Hey, Hank’s right. So Hank, give us the 183 billion back and we will let you fail and 120,000 employess will be out of work. Oh, wait a minute, that will look bad this close to the 2012 election, wont it?

    • November 21, 2011 at 5:10 pm
      Baxtor says:
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      Hey Earlybird, you are NOT giving AIG employees any credit. I believe they are very smart individuals and would have been gobbled up by companies that picked up the AIG businesses that they would have ended up losing. So in your opinion not one of the AIG employees would have been chosen over someone out of college or new to the market. We probably would have had 100 bigger companies vs still the one large AIG that is owned by the US of A.

  • November 21, 2011 at 1:47 pm
    fed up says:
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    Who was the president in Sept 2008? Maybe AZ ins man should review that before he starts throwing out the “king” word. Seems to me the “king” before this got us into all the trouble to begin with!

  • November 21, 2011 at 1:54 pm
    The Other Point of View says:
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    Oh my God. Why Az in man (first poster) raving about Obama? AIG was seized by the U.S. in August 2008. Bush was in charge at that time. HELLO??? Anyone home? Folks, time to stop blaming Obama for everything wrong in the world. He inherited all of these problems.

    Not that what Bsh did was wrong…I think it was the right decision, but what would those shares have been worth if the U.S. didn’t step in? ZERO. The company was about to declare bankruptcy.

    • November 21, 2011 at 5:39 pm
      Always Amazed says:
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      Obama might have inherited some problems, but he created more then any other president past or present. 15 trillion in debit and growing. Put that on his resume.

      • November 21, 2011 at 5:53 pm
        The Other Point of View says:
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        Whatever. You’re another one who’s indifferent to the facts. Just do a little research on what the national debt was when Bush took office and what it was when he left office. The debt increased far more under Bush than it did under Obama and that’s a fact. That’s what happens when you drag the country into a two wars without paying for them, cutting trillions in taxes and then adding Medicare Part D to our burdens.

        But I know you blame Obama for everyting, including the Great Depression, World War II, The Bubonic Plague, and the Holocaust.

        • November 22, 2011 at 11:02 am
          southern gal says:
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          I admit, Bush was a big spender, but your pal Obama has run the debt up more. See below from an NPR article, which is certainly NOT a conservative leaning site:

          How do Bush and Obama compare on closer inspection? Just about like they do on an initial glance. According to the White House’s Office of Management and Budget, during his eight fiscal years, Bush ran up a total of $3.283 trillion in deficit spending (p. 22). In his first two fiscal years, Obama will run up a total of $2.826 trillion in deficit spending ($1.294 trillion in 2010, an estimated $1.267 trillion in 2011 (p. 23), and the $265 billion in “stimulus” money that was spent in 2009). Thus, Bush ran up an average of $410 billion in deficit spending per year, while Obama is running up an average of $1.413 trillion in deficit spending per year — or $1.003 trillion a year more than Bush.

          Obama, of course, has said the economy made him do it. But the average inflation-adjusted deficits through Obama’s first two fiscal years will be more than ten times higher than the average inflation-adjusted deficit during the Great Depression. Even as a percentage of the gross domestic product, the average deficits in Obama’s first two fiscal years will more than three times higher the average deficit during the Great Depression. The fact that Obama’s deficits have, by any standard, more than tripled those of the Great Depression, cannot convincingly be blamed on the current recession.

          And none of this even takes into account Obamacare, which the Congressional Budget Office says would increase spending by more than $2 trillion in its real first decade (2014 to 2023) — and which, even under very rosy projections, the CBO says would increase the national debt by $341 billion by the end of 2019.

          It’s not often that one gets to hear a call for “responsible” fiscal stewardship from someone whose deficit spending is outpacing President Bush’s by more than $1 trillion a year — yet that’s apparently what we’ll get to hear tonight. But President Obama’s actions tell another, far clearer, story about his commitment to deficit reduction.

          • November 23, 2011 at 6:02 pm
            ktb says:
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            I think the math you present is a little too simplistic.

            First, and correct me if I’m wrong, aren’t deficits inherited? If Bush left office with a $1T deficit (I have no idea what the deficit was for 2008), wouldn’t Obama immediately inherit a $1T deficit? It’s not as though he could take office, see the mess, and scrap the budget on day 1. He had two wars to pay for.

            Second, you’re only quoting deficit numbers. We’ve all heard that part of the difficulty with the present budget is that revenues have fallen dramatically since the market crash at the end of 2008. I would be interested to know how much revenue was coming in during each President’s term in office. (And the Great Depression comparison is just silly.)

            Point being, the budget has been on the wrong track for years. President Obama inherited an enormous fiscal mess with two wars and out of control spending, along with revenues shot by a financial crisis which began before he took office.

            P.S. Stop calling it “Obamacare.” It’s the PPACA, and it’s wonderful.

        • November 22, 2011 at 11:12 am
          Always Amazed says:
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          Do you not remember 09/11? We were attacked. We didn’t go to war. Bin Laden brought that one upon us. Did you honestly expect us to say “Oops! You caught is with our pants down. Silly us. We had all the warning with the last few administrations, but you finally got us!” Wake up OPOV. I only blame Obama for what he has done to this country presently because he hasn’t done too much good and his record speaks for itself. “WE NEED CHANGE” are you honestly happy with the change he brought? The man had no experience to run this country. But you’re just as blind as the sheep who put him in office. O can do no wrong. He apologizes to other countries for the USA. Our moral is down the hopper. His stimulus got us in more debt then ever and still you sing his praises. The blind leading the blind.

          And your exaggerations are pretty pathetic, too.

          • November 22, 2011 at 11:47 am
            The Other Point of View says:
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            Iraq and Saddam Hussein had nothing to do with 9/11. That war, the more costly o fthe two was a war of choice and Bush lied to get us into it.

            I don’t think Obama can do no wrong. I think he’s been far too conservative, caving in to Republican demands at every turn. He’s running like a moderate Republican instead of a Democrat.

            What I resent are the unfair attacks. You blame him for deficits but you had no problem when Bush ran up huge deficits. I resent that Dick Cheney said “deficits don’t matter” when he was asked aabout his administration’s reckless spending, but now all of a sudden, it matters.

            You say he had no experience, but he was an Illinois state legislator and a U.S. Senator, which is a lot more experience than many previous presidents and much more than many of the Republican candidates in the running now.

            I honestly think that if you look at his record, objectively, he has done better in many cases and no worse in many cases than his predecesor.

          • November 22, 2011 at 12:16 pm
            Always Amazed says:
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            DID I SAY ANYTHING ABOUT EITHER????

          • November 23, 2011 at 11:30 am
            MP says:
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            The 9/11 hijackers were all Saudis. The Lloyds lawsuit has shown that the attack was financed by the highest levels of the Saudi government. Bin Laden is Saudi.

            So we did the rational thing and destroyed Iraq and Afghanistan, cause you know, why the hell not?

        • November 23, 2011 at 11:29 am
          MP says:
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          George Bush:

          Two huge *unfunded* wars– the longest and costliest wars in our history.
          Huge *unfunded* expansion of the Pentagon.
          Huge *unfunded* expansion of Medicare (Part D).
          Huge *unfunded* tax cuts for the rich (and by the way where are the jobs we were told would come?)

          That’s not to excuse Obama. For a Democrat he’s sure been the most successful Republican president in US history- he took every policy of the Bush administration and injected them with steroids.

  • November 21, 2011 at 2:07 pm
    Ed says:
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    And the tax payers need to bend over again! We are a free market enterprise system. AIG should have been left to fail. Its the economic system we are in since the dawn of time. Just because the company would have failed, does not mean the jobs would have been eliminated as AIG insureds still need to be insured. It would have ended up a different name on a pay check, a different signature.

  • November 21, 2011 at 2:11 pm
    D says:
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    As much as I think Mr. Greenburg should retire and move to FL, I realize that he has a very good point here. Henry Paulson, Treasury and Ex-CEO of Goldman Sachs, engineered this deal. Who was one of AIG’s largest creditors? Goldman Sachs. They got their money back 100% on the dollar. AIG shareholder never got “just compensation” but Goldman. I would love to see where this goes.

    • November 21, 2011 at 2:17 pm
      The Other Point of View says:
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      D, the shareholders would have gotten nothing if AIG went belly up.

      This is like the surgeon that amputates a leg because if he doesn’t the patient will die, and then the patient sues the surgeon for the loss of use of the leg.

      I agree, it really stinks to high heaven what happened, but Greenberg is way out of line here.

      • November 21, 2011 at 3:57 pm
        D says:
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        I understand where you are coming from. But, I don’t know if you are using the right analogy. We were told we had to do this deal but were given very little specific information on why it had to be done. How do we know the amputation was really necessary? Hank was never the patient, either. Yes, it’s most likely grand standing on Hank’s part. But, if this shines a light on what really happened and why, I would be happy to see what is discovered. It’s not like our well meaning (sarcasm) government would be willing to look. It’s not out of line to be skeptical of a deal of this magnitude and with the speed that it was rammed through.

  • November 21, 2011 at 4:33 pm
    The Other Point of View says:
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    Here’s an interesting article on why we couldn’t let AIG fail. The author’s conclusion is that the entire world economy could have ground to a halt.

    http://seekingalpha.com/article/126447-why-aig-wasn-t-allowed-to-fail

    The author says it was a worst-case scenario, but I don’t think the Bush administration was willing to take that chance. You are right though, it was rammed through because it all unraveled so quickly that weekend when Lehman Brothers went under.

    Another good read is the book “Too Big to Fail” by Andrew Ross Sorkin. I read it and only put it down to wipe the sweat off my brow.

  • November 21, 2011 at 4:49 pm
    Stephen Tallinghasternathy says:
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    I think Az man has Obama Derangement Syndrome. If it’s bad, it’s gotta be Obama’s fault.

    You should try reading a newspaper. Or watching the news. You fail on current events.

  • November 22, 2011 at 10:10 am
    wudchuck says:
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    have you ever thought that hank might be right and causing that company to fail might allow another company to rise… he’s already got his money out of that company prior to the gov’t take over… so, would it be in his best interest if this was a competing company and it failed; then allowing his company to take over or make an increase of business for himself.. i agree, we should have let this company fail… we allow small mom/pop companies to fail w/o a gov’t bailout…

  • November 22, 2011 at 11:35 am
    Agent says:
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    Some thoughts—
    AIG underwriters would have gone to other companies in a heartbeat. Does anyone remember the fall of Drexel Burnham Lambert? When Millken’s bank failed, the most memorable item was all the phones ringing from other companies trying to hire their employees!
    AIG underwriters are among the most seasoned and talented in the industry, and their skill and training cannot be matched by many companies. One year at AIG is worth three-four years of experience at another carrier.
    As for the bailout, it was the wrong thing to do. The company got bad terms from the federal government that were not given to other firms that were given federal assistance (ex. Citigroup).
    In addition, this business would have flowed to other companies. They would have been reunderwritten with different terms, conditions and pricing, and the market would have turned in an instant. Instead, the government stepped in and allowed AIG to stay afloat. This allowed them to continue underwriting risk at very cheap prices.

    • November 22, 2011 at 4:20 pm
      George says:
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      Most of your statement is ok, but the last part is not quite right. By the time the bailout happened, AIG was the only entity in the world offering credit default swaps on CDOs and synthetic CDOs. No one in their right mind would take that business. So ‘the business would have flowed to other companies’ and ‘reunderwritten with differen terms’ are flawed statements, as the solution to the problem was making those credit default swaps “disappear” by bailing out AIG.

      Alternatively, if you re-underwrite a credit default swap with proper terms, the premium to buy the CDS would be hilarious by the time 2007 rolled around. Probably would be something like 50% of the total pool.

      • November 22, 2011 at 6:00 pm
        Agent says:
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        I was referring to their commercial insurance operations (Chartis) and not the default swaps. The commercial enterprises insured would have been reunderwritten with different terms, conditions and pricing with other carriers.
        The market would have hardened very quickly.
        Instead, the federal government intervened and allowed AIG to stay afloat. This perpetuated the soft market as AIG continued some of its low pricing to maintain accounts and/or write new business.

        CDS were called that to eschew the McCarran-Ferguson Act (state regulation) and appeal to national regulation. This was wise for AIG as they only had to appeal to one regulator versus fifty.
        It is essentially an insurance product as it guarantees to indemnify financial institutions who cannot meet their obligations. If regulation was followed by SAP versus GAAP, the chances of discovering the deleterious effects of the CDS before September 2008 would have been much higher.

  • November 23, 2011 at 8:21 am
    George says:
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    I disagree. The commercial P&C market was softened by the financial crisis for certain, but i don’t think allowing AIG to fail would have expedited a hardening. If anything, the further shrinking of the US economy by what would almost certainly have been a systemic banking collapse would have caused the insurance market to soften even further.

  • November 23, 2011 at 11:36 am
    Orlando says:
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    The government should have just let all of those companies sink like a rock to the bottom of the ocean!!! That would have been the best thing for all of them instead of the bail out. Why? Because they got bailed out and got saved from bankruptcy and have the gull to complain about it? Now the tax payers have to pay back and the banks that got the bail out instead of investing it are hording it and hurting the people that bailed them out. Greed at its best.

  • November 23, 2011 at 11:48 am
    MP says:
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    The AIG bailout was just a stealth bailout of Goldman. They took the money and repaid their obligations to Goldman $achs 100% on the dollar. Orchestrated by the former head of G$. Facilitated by Timmy G. Look at Obama’s G$ administration- who could have expected any “change”? His first official act was to put Volcker off in a closet somewhere so that the “business as usual” Goldman crowd wouldn’t have to deal with his dissent.

    Now look at Corzine- another head of G$ caught with his hand so far into the cookie jar that no amount of explaining will get him out of this mess.

    Ladies and gentlemen the Fox has been watching the Henhouse for the past ten years. Welcome to the “New America” where gains go to the plutocracy and losses are shifted to the taxpayer. It’s a case of “Heads, I win, Tails, You Lose” and you are seeing the backlash grow on a daily basis.

    The Right loves to speak of “Socialism” and point out how the “Left hates Capitalism”. Review the events of 2008– does that sound like Capitalism to you? Where is Angelo Mozilo today? (Hint: the answer isn’t jail). What was his penalty? Why it was a fine of only 10% of his net worth with a ban on suits which might have led to criminal charges. And 1/3 of that penalty was contractually paid by Countrywide!!!

    People should be SO FURIOUS at what is happening. But instead we get to hear Megan Kelly on Fox “News” claim that OC Spray (prohibited in WAR by the chemical weapons treaty) is “basically a food product” and that anyone who dares oppose the status quo is a jobless hippy looking for a handout.

    • November 23, 2011 at 12:51 pm
      George says:
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      Counterpoint: Megan Kelly is hot.

  • November 23, 2011 at 1:34 pm
    Marc says:
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    “Too Big to Fail” covers the story of Sec. Paulson visiting the White House to sell Mr. Bush on the AIG bailout. Paulson tells him we cannot let them fail, AIG is into Life, Health, P&C, Aviation and etc. all over the globe. Bush’s response: “One company can do all of that?”. Mr. Greenberg played a big role in AIG’s problems, so he should be thankful for small favors. This lawsuit is symptomatic of American’s obsession with blaming others rather than fixing things.



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