AIG Reworks Bailout; Fed Ups Support to $150B, Lowers Interest Rate

By and | November 9, 2008

  • November 10, 2008 at 8:24 am
    matt says:
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    AIG is the embarrasment of the international insurance industry. How about they go ahead and WIND DOWN THEIR POSITIONS instead of acting like a Hoover Vacuum for Fed funds.

    The time has come to force them to actually sell their assets (like they said they would do). All this money they’ve burned through, and we haven’t seen the asset sales needed to repay it.

  • November 10, 2008 at 9:54 am
    Ratemaker says:
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    Haven’t seen the asset sales — The assets we’re talking about are subsidiary companies, each with millions of dollars in revenue. How long do you think it takes to find buyers and negotiate fair market value for assets like those, especially in the bizarre position the market is in?

  • November 10, 2008 at 10:22 am
    lastbat says:
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    Being a capitalist myself, I say stop giving AIG money (or loaning, to be more precise). If they were worthy of credit they would have found it on the open market. AIG should be allowed to sink or swim on its own merits.

  • November 10, 2008 at 11:27 am
    Jeff says:
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    Fair market value is whatever they can get on the open market. The goal here should not be to save the AIG- why do they deserve to be saved? Let’s keep their good assets good by making AIG sell them. Let’s limit the damage to the tax payer. We can’t allow this dance to continue because sooner or later AIG’s ratings will kill their assets, and then we will really be stuck with no good assets. This new deal stinks. It looks like Paulson is helping his friends.

  • November 10, 2008 at 11:46 am
    Jerry says:
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    This is out of hand. Lehman is allowed to go belly up. AIG is declared worth throwing a life line too. The initial $85B was declared more than needed. Now they are up to $150B of TAX PAYER MONEY. Why should AIG be allowed to pick and choose what they sell? Is not the priority to stabilize the world economy and pay back US citizens? Sell what can be sold now and if you are left as an aircraft leasing company then so be it.

  • November 10, 2008 at 12:21 pm
    Joe Mama says:
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    My department head asked us all to come up with ideas of how to drive more submissions our way. I suggested ask for government intervention or some kind of economic stimulus package.

    I learned that some managers don’t have much of a sense of humor.

  • November 10, 2008 at 12:36 pm
    ER says:
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    Joe Mama, you are a joker for sure.

    I too am sick of this garbage. I’m sure I speak for hundreds of thousands of Americans. It’s a convoluted nightmare. I don’t have the answers. I don’t really believe that AIG is going to be able to get itself out of this black hole. Seems like all of this bailout stuff is a big bandage for a wound that just keeps becoming more and more infected. Eventually we will just need to amputate. Cut it off completely and let it die.

  • November 10, 2008 at 12:41 pm
    TwoCents says:
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    Excuse my ignorance but why doesn’t the government/taxpayers have more say in AIG since they have ownership because of the loans. Can someone explain?

  • November 10, 2008 at 12:44 pm
    Bill says:
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    Quote of the day from a fund manager: ‘This is worse than a divorce… I’ve lost half of my net worth and I still have my wife.’
    The bailout, a different perspective: Back in 1990, the US Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it. They failed and it closed. Now we are trusting the economy of our country to a pack of nit-wit, numb nuts who couldn’t make money running a wh**re house and selling booze!

  • November 10, 2008 at 12:48 pm
    Jeff says:
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    I believe the word of the day should be “receivership.” I agree that government has no business running AIG, but neither should we be bailing them out.

  • November 10, 2008 at 12:48 pm
    Bill says:
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    The Government is not us. Thats what conservatives understand. The Government operates for the benefit of government and the growth of government, thats were its power is generated. Politicians look for ways to enact some legislation they can call their own. What you get is more laws we can not inforce and higher taxes we cant afford to pay.

  • November 10, 2008 at 12:49 pm
    BADDEST MF'er says:
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    is that it shows all exactly what government is: a fiction used to take money from some people (by force or the threat thereof) and give it to other people. End of story. That’s it. There’s nothing more to say. The purpose of “government” never has been, never will be and is most definitely not now to “serve the public,” “provide services,” etc. Just try telling a “government employee” that he’s your servant and see how big a belly laugh that gives him.

  • November 10, 2008 at 12:52 pm
    Are you Serious? says:
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    I don’t understand the last post…..try telling anyone they are your servant and see what kind of belly laugh you get…

  • November 10, 2008 at 12:52 pm
    Buckeye says:
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    Anyone who expresses any surprise that this is obviously a bad deal has had their head in the sand. There is no way this or the $700B financial bailout will be effective. It’s the federal government at work — what do we expect?

    On a related note, regardless of one’s view of the outcome of the election, one could easily make the case that McCain’s handling of the $700B financial bailout cost him the election. If he opposes it, he wins. He instead chose to get in line with the the other Washington snake oil salesmen (Democrats and Republicans alike) and lost the election.

  • November 10, 2008 at 12:55 pm
    Bill says:
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    We took over runing the company when we bought 80% stock ownership. Now we will have to CONTINUALLY bail out the company until it makes money, We own it!

    I know this sounds silly but I bought some of this stock at 1.45 a couple of thousand shares. Unlike CEO Liddy and Gov officials, I would like to thank you and your tax dollars that you gave to the company so I can profit down the road. LOL, sorry for the slap, but thats what it is to tax payers.

  • November 10, 2008 at 12:59 pm
    Jeff says:
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    No problem Bill. I sold my shares years ago and made plenty. Best of luck with your investment.

  • November 10, 2008 at 1:02 am
    Bill says:
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    Thanks Jeff, It looks like I might need it with my new partner, We all know they are never going to divest their interest in AIG. I am just hoping that our new health insurance carrier AIG-DC will some how some day make a profit. I will sell at $8.

  • November 10, 2008 at 1:17 am
    His Satanic Majesty says:
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    You’re right, AIG will never get out of this but two things in response: 1)the purpose is NOT to “get AIG going again,” it’s to take your money and give it to politically favored classes; and 2)we’ll be paying for this forever, even when nobody knows any longer who AIG was; did you know that your phone bill still has a tax on it that-we were told-was levied to pay for the Spanish American war?

  • November 10, 2008 at 3:14 am
    Ratemaker says:
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    The gov’t does not have as much of a say directly in the way the company is run because the ownership stake is in the form of preferred stocks.

    Preferred stocks give the owner the right to a revenue stream — the dividends are guaranteed and must be paid before common stock receives a dividend. An unpaid divident on preferred stock must be paid the next year, often with interest.

    What preferred stock does not confer to its holder is voting rights. Only common stockholders have voting rights in the company.

  • November 10, 2008 at 3:22 am
    One says:
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    ANYTHING I GET
    Talk about a bunch of crap!
    I wish our company can get some free bail out money
    How many decades will it be until they repay it back..??
    Yeah like thats gonna happen.
    This will create the need for fed regs.
    They should have stuck to their core business Greedy just like the rest of the bunch that got the economy in this shape now the whole insurance industry is left to deal and real from the gross negligence of one, Where is Hank in all of this, Oh yeah hes retired…………

  • November 10, 2008 at 3:56 am
    ER says:
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    If the governement is spending taxpayer dollars on this bailout that we are all sick of, maybe they have a public officials liability policy in force. Let’s file a class action for misappropriation of funds. I want my money back. I wish it were that simple….

  • November 10, 2008 at 4:08 am
    Swing a Big Stick says:
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    ER,

    The only problem is that they have the guns and dictate the rules including “judicial decisions.” Let’s face it: we’re screwed. This is what we get with “government” and their magic pixie dust. The only way to prevent this sort of thing in the future is for people to recognize that government is nothing but a group of men and women who do business with guns and stop supporting them. Let the whole rotten, corrupt enterprise collapse of its own weight.

  • November 10, 2008 at 4:22 am
    Baxtor says:
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    Twocents, we do have a say. It was on November 4th when you voted out the senator or house representative with your vote if they voted yes on the bailout. The only one in my district voted no on it, so I voted for him. What did you do?

  • November 10, 2008 at 4:45 am
    concerned says:
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    What is happening to my 25 BILLION that is not accounted for!!!!!!!!!!!!

    Thank you,
    Concerned Taxpayer

  • November 11, 2008 at 7:26 am
    Anonymous says:
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    Texas / South Central News
    Class Action Suit Filed Against AIG Over Katrina Claims
    October 10, 2005

    Send Feedback E-mail this Article Print this Article Article Reprints
    Americans for Insurance Reform (AIR), a New York City-based national coalition of public interest organizations, announced that a New Orleans resident has filed a class action suit against American International Group (AIG) and its subsidiary, Audubon. According to AIR’s statement the suit, filed by Toni Swain Orrill, a New Orleans resident whose house was severely damaged in Hurricane Katrina, charges AIG and Audobon have failed to help their policyholders who are in desperate need of assistance after the hurricane.

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    AIR noted that AIG and Audobon were the underwriters and service providers of Louisiana Citizens Fair Plan (FAIR), which provides homeowners’ policies of last resort to those who cannot get insurance elsewhere, including many poor people in New Orleans and the surrounding area. The class action suit is on behalf of Louisiana’s FAIR plan policyholders – about 400,000 people. The suit alleges that AIG has completely failed to provide any way for its policyholders whose homes have been damaged to initiate a claim or even reach its offices to find out how to do that, or to provide temporary disaster relief provided under their policies.

    Orrill’s husband, Ray, an attorney, represents his wife in the suit. He said Toni Swain Orrill “called and e-mailed the insurance company over 60 times, and could never get through.” He added that “many others whose homes were severely damaged in the storm” could not ” get through to their insurers, much less get relief from them.”

    Ray Orrill said that another insurer, Allstate, provided his wife with a FAIR claim form as a courtesy, after failing to get any response from AIG. She submitted it to AIG almost thirty days ago and has not received a response.

    AIR said learned of Toni Swain Orrill’s situation when she called the hotline it set up to assist Katrina victims when they encountered obstacles to receiving assistance from their insurers.

    According to AIR co-founder and spokesperson Joanne Doroshow, “This is the worst case that we have seen of a complete failure of an insurance company to respond to the immediate and dire situation of its Katrina policyholders. Many FAIR policyholders were struggling economically before the storm hit, and some are now reaching the point of severe impoverishment due to AIG’s failure to help them. Many have still not received the temporary living expenses they are entitled to under their policies.”

    Over a month after Katrina, AIR’s hotline is still receiving calls from people who cannot reach AIG insurance adjusters. One woman whose home was devastated reports she’s been completely unable to reach any AIG representative to request temporary funds or a visit from an adjuster. Another caller says she’s been passed around from number to number and AIG has been largely unresponsive to her.



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