AIG in Deal with U.S. Government to Terminate Some Debt Obligations

By | December 3, 2008

  • December 3, 2008 at 10:20 am
    Sarcastic Bob says:
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    You go, AIG!! We really need ya! Can’t live without ya! You were so wonderful when you were the slash the throat, pay no claims, pay low commissions, do dirty deals, rip off the consumer carrier! We want you back. Come on, take a deep breath. We need ya!!

    I’ll gladly pay my tax dollars directly to you, so your big guys at the top can get their fair share of the loot!

    Who needs a car? We need AIG!!

    AIG! AIG! AIG! Yayyyy!

  • December 3, 2008 at 11:01 am
    chill pill says:
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    come on guys and gals, your lack of knowledge about the whole AIG issue is very obvious..and ugly. You are as inaccurate as the mainstream media in america. Please…at a minimum, take a few minutes to go to http://www.aig.com website and read the press releases to at least speak from an educated perspective. Bottomline: AIG will easily pay back the loan + hefty interest, and then buy back all the 79.9% ownership preferred stock shares that we taxpayers currently own (you think they want taxpayers in their business???). Since when is a piad-loan a ‘bailout.’ AIG has well over $130B in assets they are currently selling (based on getting only $.50 cents to the dollar, which is low considering these are best in class assets), yet have a debt obligation (post Nov. 10th) of only $27B now. Do that math…There is no $150B loan outstanding – or even available to them. that number is media math, adding up figures and not looking at what AIG owes, can borrow, or has paid back to-date. AIG and Fed/Treasury spelled this out clearly on global shareholder conference on Nov. 10th. (also available on aig.com). They have already sold numerous assets in the $10’s of billions, and they haven’t even started with the big ones yet. they have over 70 willing buyers right now for various assets around the world who can’t get financing to buy them due to economic issues. AIG’s loan would be paid off already if we didn’t have these credit freeze issues. Keep in mind, AIG parent company has assets worth billions and ten’s of billions…each….this ain’t no best buy or circuit city that has assets in millions. Obviously, not many firms can afford billions in financing in this liquidity mess. And remember, the insurance part of the business is stronger than any competitor in the industry, they have over $32B in policyholder surplus that can’t be touched!!!!

    Im just asking that you speak from an educated viewpoint rather than sounding like a politician who points the finger at the car company execs about flying in jets, when 76% of all congressmen are millionaires who fly these same jets (at a minimum, first class comm’l), own multiple homes, and eat in the best restaurants..all on your taxpayer money…everyday they are in office. Shouldn’t somebody be focusing on their use of taxpayer money?? And when did being a civil servant become so lucrative. That’s the real irony and joke of all this, our congress is pointing the finger and posturing, when they passed the legislation that triggered this financial mess and they are the ones riding high on our taxpayer money – with no stings attached or laons to repay. Ponder that, then write your congressman and tell them to drive a hybrid, eat subway sandwiches and fly southwest airlines. Peace out…

  • December 3, 2008 at 11:10 am
    Suzi says:
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    I think I’m confused. AIG is paying us back with the money we gave them??

  • December 3, 2008 at 12:24 pm
    Sue says:
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    come on guys the new prez said we were going to “Share the wealth” didn’t he?

  • December 3, 2008 at 12:27 pm
    InsuranceGal says:
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    Yeah, Suzi

    just read it again to be sure thats what the article said…does it count if they pay us back with the money we gave them. Wouldnt that sort of be saying they didnt need the money in the first place? *sigh

  • December 3, 2008 at 12:34 pm
    American Taxpayer says:
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    So at what point in time does AIG actually 1) pay something back to us and 2) Sell something so that the can pay us back?????????????

    Let’s see goverment now runs: Fannie May, Freddie Mac, Banks, AIG and now wants into the Car business……

    We are now a Socialist society. Thank you Congress that is what you wanted………CONTROL OF EVERYTHING!!!!!

    Hope everyone that loves BIG GOVERMENT is smilling………Gotta love it…..We will all become one with the goverment……No need for money goverment will take care of us……..

    In the words of Oprah “WE SPEAK YOUR NAMES”

  • December 3, 2008 at 12:38 pm
    Ken says:
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    Me thinks AIG is smarter than the Fed.

  • December 3, 2008 at 12:45 pm
    concerned says:
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    Remember…… S&P, Moody’s and A M Best all rated these AIG credit swaps as AAA. AIG couldn’t have sold the bonds and got into trouble without the AAA ratings.

  • December 3, 2008 at 12:50 pm
    Not Working says:
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    So if I can’t pay back my car loan and house loan because I’m not working, can I get bailed out? It would be good for the economy if I was. My loans would be paid off, I’d have money to shop and stimulate the economy, thus creating jobs. Plus then I could look for work in my new 4WD, Cad Esc, driving from my 6 bedroom house in upstate NY, because I can now afford the Gas. Oh wait, the government didn’t do anything to lower gas prices and low and behold they came down. I guess if Paulson would have jumped in a year ago, we’d still have high gas prices and he would say we are better off then if he didn’t use taxpayer money. Boy if we could sail to another Country and start over, I’d be on the first boat, however, we’ve allowed our government to become corrupt and there is no place to sail that is not already inhabited.

  • December 3, 2008 at 12:54 pm
    LARRY LOGIC says:
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    YOU ARE SO RIGHT! THE DEMOCRATS FAVOR BIG GOVERNMENT, AND THE REPUBLICANS FAVOR BIG BUSINESS. I GUESS THEY FINALLY MERGED!

  • December 3, 2008 at 1:03 am
    John Smith says:
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    I strongly question the fairness of the repeated, soon to be continual, propping up of AIG with hundreds of billions of taxpayer money.

    And I’m not even talking about fairness to taxpayers. I’m talking about you, and me, and companies that work for a living, and previously had to face the giant that was AIG, and now have to face both AIG and the Federal Government in competition with the rest of the insurance industry.

    Think about it.

    With the govenrment throwing around billions and billions to AIG, what are the current motivations by senior management in issuing pricing and other market orders to its underwriters. Do you really think that AIG is going to care about squeezing a last dollar out of a quote? I think that, as rational actors, the motivations of AIG’s senior management is going to be far, far different than the motivations of normal insurance industry managers.

    Just knowing that every billion that the government gives AIG makes it harder and harder for the government to abandon you later on, just imagine the effect on pricing.

    Think about it.

  • December 3, 2008 at 1:05 am
    Joe Mama says:
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    Wow, this reminds me of one of my friends. One time we were at a bar and he forgot his wallet, so I gave him $20. Then he went over to the bartender, bought us each a $5 dollar beer, and said that now he only owed me $15 since he spent $5 on me already.

    I’ll get in touch with him and tell him to send his resume to AIG. He’d make a good CFO for them.

  • December 3, 2008 at 1:39 am
    David says:
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    I can’t believe you would bring Obama and that “share the wealth crap” into this. He’s not even President yet and you are dogging him with stuff he has not even done. You probably have no idea where and how that “share the wealth” statement became the battle cry of the right wing. The right wing exploits the many with short attention spans, like you, who hear a phrase like STW and banks on the fact that most people will not investigate the context in which it was first uttered. It’s the Carl Rove philosophy of “just throw it out there enough and the morons will start to believe it”. You must be one of them. Do your homework, genius.

  • December 3, 2008 at 1:51 am
    Sue says:
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    Yep, I guess I’m one of “them”. Geez, lighten up man, lifes too short.

  • December 3, 2008 at 1:59 am
    David says:
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    Sorry. You struck a nerve. What I outlined is how the last President got elected and we know how that turned out.

  • December 3, 2008 at 2:05 am
    Layoff AIG Employee says:
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    Ya, I also have some bad debt attributed to AIG…

  • December 3, 2008 at 3:28 am
    AGENDA says:
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    YOU GOT IT…-“PERFECT TOGETHER” JUST LIKE GOV KEANE USED TO SAY
    BOTTOM LINE FOR ME IS: GREENBERG LIT THE FUSE, WALL STREET WAS THE BOMB

  • December 3, 2008 at 3:31 am
    dj says:
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    Hey you all,
    What you’re not taking into account is what old Maury A. Greenberg has over all the good ole boys in Washington. Trust me, he can bring them all down with his sleeze bag info.

  • December 3, 2008 at 4:55 am
    Karl Rove says:
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    oh no! you said Rove! isnt that the lefties bogie man? he’s caused all of these problems hasnt he?! he’s a very bad man isnt he? and you sound very angry. why dont you lighten up?

  • December 3, 2008 at 5:19 am
    Roy Keane says:
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    Here is a challenge to everyone here. I was once in the forefront of criticizing AIG for their recent loan they required from the government. I did hours and hours of research on the subject so I could are intelligently against AIG employees. Now, after I have obtain the correct information I now am on the AIG side. I even no longer call it a bailout. AIG is paying high interest rate back to the government (and I do believe they will pay back in full) which in the end will go to reducing billions of the nations debt. I challenge everyone to do your research before criticizing AIG anymore. And I want to apologize to all of the AIG employees who have read my past comments criticizing the company. Thanks for your hard work.

  • December 3, 2008 at 6:20 am
    wudchuck says:
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    so, um….if have a loan w/the government, for example, my student loan….can we just forget about it since they have loaned my government money to them for bailout? um…. afterall, would that mean that for next year, i don’t have to file taxes, because the feds used my tax dollars for the bailout? afterall, like any bank, there is interested accrued on a loan… um…um… so where does the people of the united states benefit from this bailout? are going to collect an dividend check or is the fed going to use it on my behalf and never give it to me… or they going to tax it too, even though it was the fed’s that gave my money away w/o my approval… and look, how many other businesses are asking for a handout? 3 automakers – what about the other automakers in this country? are they failing? if you think about it, they lost money because of the gas hog vehicles they had on the market and it was not moving due to the gas prices… now i hear, they decided to drive their precious hybrids to visit congress, instead of the private jet… what happened to a carpool? that would show they at least care. afterall, how many hybrids found that alternative fuel station across the country? um…um…

    can i ask for a refund of my electoral vote? or take back my vote due to failure of my congressman or senator for not stepping correcting other issues…. afterall, why can’t a big company fail? little ones do and we don’t make a fuss. so if owned a little company and needed a bailout – could you loan me the money w/o interest? um…um… something to think about! it should not matter how big the company is, if their is a failure then you as a company need to talk w/your shareholders and the executives who have a big payroll… afterall, that company is responsible for it’s own finances and then having to say goodbye to some of its employees… companies come and go!

  • December 4, 2008 at 8:42 am
    phint says:
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    it’s called humbling yourself.
    there’s nothing illegal or wrong about flying a private jet, but there’s alot to say for perception. it’s a slap in the face to the people who work for you and the society that supports your business.

  • December 4, 2008 at 9:42 am
    To Chill Pill says:
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    Chill Pill,
    You are correct, we should all become educated on this subject including yourself. First of all don’t read AIG’s website. It’s like going into a prison and asking a rapist if they raped someone. I have a feeling of what their answer would be. In regards to AIG, it first started out as a hefty loan, but they have since taken on bailout money, government buying their bad mortgage debts and as you stated selling us stock. The stock is worthless especially if they were to ever fail as we will only get some money back for being their debtor. Stockholders usually get nothing as there is no money left. AIG was able to pay back some of the loan due to bailout money they accepted recently. So yes, please do educate yourself before you get all confused and defend your wonderful government.

  • December 5, 2008 at 9:51 am
    Sarcastic Bob says:
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    And the orders to force the banks to lend money to people so they could buy houses they couldn’t afford were given during the Clinton Administration. So, there’ plenty of blame to go around.

  • December 5, 2008 at 5:34 am
    Sheltowee says:
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    How sweet. The deal for AIG gets better and better. Just curious how many jobs did we save Americans by bailing them out and uh why aren’t we going to bail out the American Auto worker, for which over a million US jobs are in jeopardy? Did we even debate whether we should bail out AIG and did they present an economic plan? OH I forgot they gave everbody a raise and planned a lavish junket. Does our gov’t really think we’re (you know the ones who pay into social security) that stupid?

  • December 6, 2008 at 8:28 am
    chill pill says:
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    To Chill Pill,

    the data and press releases on AIG.com’s website are joint press releases by the parties that hammered out the agreements -the Treasury/Fed and AIG. This is not AIG spin (do you seriously believe they can get away with spin with the world’s eyes on everything they do these days). What other entity would you trust to believe the accuracy of the information – CNBC, NBC, FOX, Bloomberg???? Come on, the media, stock analysts and rating agencies are the only other entities to get you info – where do you think they get their info – crystal balls. Do you honestly trust the stock analysts research – have you seen their track record lately. Rating agencies rate AIG as A, excellent. Not B or C junk status that would indicate carrier is on verge of failing. They all report headlines and their views, with a slant toward maximizing viewership/readership. AIG getting out of debt does not make headlines like AIG now up to $150B in bailout money. What would you rather talk about at the watercooler? All data released must adhere to GAAP accounting stds and hold up to 3rd party audits.

    So, one of your discussion points indicates correctly, that the gov’t has bought AIG’s bad debts ($30B of multi-sector CDO’s and $22.5B of RMBS, to be exact) and $40B of AIG preferred stock. How does that make AIG weaker? Doesn’t that put them in a better position to get out of the situation they are in? and if they get out, doesn’t it mean the gov’t/taxpayers would not suffer a loss as they will get all principal and interest back. The gov’t plans to make $$ on the CDOs and RMBS they bought by holding them past the economic crisis (2-3 years) and selling them for more than they are worth given current hugely discounted market rates. You are not arguing that you are more educated on this issue than the Treasury or Fed, correct? If so, what think tank do ytou belong to???

    I am not an overzealous AIG fan, just an educated businessperson who has spent the hours to educate myself and read the all the company financials on what is really happening to the 6th largest company in the world, and if their stock is worth purchasing in bulk given their hugely discounted price.

    So, if you think you are more educated than I on this subject, I challenge you to show me a more reliable and accurate source for the data and that AIG owes more than a max. of $33B back to gov’t. Why would you think AIG would fail, owing $33B and selling a minimum of $100B in assets with over 70 buyers making offers already and trying to get financing to complete the deals? Meanwhile – AIG’s insurance operations continue to be profitable and maintain the largest surplus ($27B) of any carrier in the nation.

    I do realize we are discussing opinions on the matter and only time will tell who is more accurate. As such, I welcome the opportunity to exchange emails with you a year from now and see if you maintain your existing position that AIG is a waste of taxpayer $$ and will likely fail, leaving taxpayers with a loss.

    Have a good one…

  • December 6, 2008 at 4:20 am
    LARRY LOGIC says:
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    I DO NOT KNOW OR CARE WHICH OF YOU IS CORRECT IN YOUR “MINE IS BIGGER” EXCHANGE. I JUST OPPOSE ALL GOVERNMENT INVOLVEMENT IN BUSINESS WITH TAXPAYER MONEY. BELIEVE ME, IT ALSO HAPPENS AT THE LOCAL LEVEL WITH CITIES GIVING BREAKS TO BIG BUSINESSES TO MOVE TO “OUR FINE COMMUNITY”! WE ARE RAPIDLY BECOMING MOSTLY A SOCIALIST COUNTRY!

  • December 9, 2008 at 4:29 am
    The Librarian says:
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    WHY ARE WE ALL YELLING!? INSIDE VOICES PLEASE.

  • March 15, 2009 at 12:25 pm
    Maria says:
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    Where is the outrage?? AIG now runs the country..I daresay the world…well done boys, well done. And you know what, the average American will complain a bit and then sit back in front of the bube tube and as Rome burns, eat their cake.



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