cthree

So how bad off was AIG?

Well lets put it this way, the Fed purchased 80% of AIG, much like it did with Fannie and Freddie, in exchange for an $85B LOAN. Leaving aside that AIG sold out 80% of its equity in exchange for a loan (hey AIG, MoneyMart is cheaper), it now seems that the Fed has become a sovereign wealth fund; one with a printing press to make as much of the stuff as they need.

So let me get this straight. All I need to do is get a bunch of banks to loan me an insane amount of money, blow it on bad investments, get to the verge of bankruptcy and have the US government pay them off while I walk away for free?

Cheese please.

SD_S2K

maybe they will buy back my AAPL stock ...

sahtt

It's OK cthree. Didn't you hear? They are charging AIG LIBOR+850 basis points. In a few years AIG's monopoly will be reinstated flawlessly and we will all start receiving checks from the fed.

Get so big the world can't afford to let you fall apart. Then make them give you even more money and go sailing on your yacht while they try to clean it up before everyone becomes wandering nomads.

RossoS2K

Stupid. As someone who works in the industry...insurance...for a company that has kept an eye on its operations, and kept the BS in check this is very disappointing. On the same level as the feds selling Govnt Employees Insurance Comp (GEICO), to Buffet.
How are the little guys going to make any $ when the feds keep handing money to people who are irresponsible???

and then too add insult to injury...former CEO of my company is going to be picked to head them up...nice.

AIG's chief executive, Robert Willumstad, is expected to be replaced by Edward Liddy, the former head of insurer Allstate Corp., according to The Wall Street Journal, citing a person it did not name

chrisjgiuliano

I hate this country :-(

s2kobsession

I like this the best.
They think printing more money will make problems go away?!?!?

*sigh*... I really feel sorry for the future of US citizens.

AssassinJN

Actually s2kobsession, you should feel sorry for the future of Canada. If this keeps up the entire north east may start crossing the border.

Gadunk

Does the FED's bailing out AIG the main reason the market is so down today or is it just a coincidence?

cthree

The market is down because the entire US banking system is collapsing in on itself, AIG being a really big part of that system. They aren't the first domino to fall and won't be the last. The Fed bought AIG because AIG insures a massive amount of the loans the banks give out. Without insurance the banks are limited to what they can loan by their deposits. With insurance they can loan out way more money than they could without. If AIG were to fail and that insurance were to become void virtually every bank in America and beyond would exceed their depository requirements and would fail. and be taken over by the FDIC.