Fed announces new 37.8-bln-dlr cash infusion for AIG
1 hour ago
WASHINGTON (AFP) — The Fed said that an 85-billion-dollar loan facility made available to AIG last month had been used up and that the new cash would be transferred from the New York Fed, which would take securities from AIG and inject cash in return.
The Fed said that an 85-billion-dollar loan facility made available to AIG last month had been used up and that the new cash would be transferred from the New York Fed, which would take securities from AIG and inject cash in return.
"The New York Fed will borrow up to 37.8 billion dollars in investment-grade, fixed-income securities from AIG in return for cash collateral," a statement from the Federal Reserve said.
"We don't know exactly where the borrowing from the Federal Reserve will top out at, and the reason we don't know is we don't know what market conditions will be like," he said.
-------------------- It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so. Posts: 6949 | Registered: Apr 2004
| IP: Logged |
The U.S. negotiators drove a hard bargain. Under terms hammered out Tuesday night, the Fed will lend up to $85 billion to AIG, and the U.S. government will effectively get a 79.9% equity stake in the insurer in the form of warrants called equity participation notes. The two-year loan will carry an interest rate of Libor plus 8.5 percentage points. (Libor, the London interbank offered rate, is a common short-term lending benchmark.)
The loan is secured by AIG's assets, including its profitable insurance businesses, giving the Fed some protection even if markets continue to sink. And if AIG rebounds, taxpayers could reap a big profit through the government's equity stake.
posted
$85,000,000,000 doesn't last as long as it used to! In the old days, $85 Billion would have kept most companies afloat for at least 2 months!
What will our money be worth when the government gets done printing all these trillions of dollars?
Posts: 1577 | From: Ohio | Registered: Oct 2007
| IP: Logged |
Just as frustrating to the committee members, Sullivan and Cassano seemed to have been rewarded for their performance, even though the company plunged under their stewardship.
AIG lost more than $5 billion in the last quarter of 2007 because of its risky financial products division, Waxman said.
Yet in March 2008 when the company's compensation committee met to award bonuses, Sullivan urged the committee to ignore those losses, which should have slashed bonuses.
But the board agreed to ignore the losses from the financial products division and gave Sullivan a cash bonus of more than $5 million.
The board also approved a new contract for Sullivan that gave him a golden parachute of $15 million, Waxman said.
As for Cassano, the executive in charge of the company's troubled financial products division, he received more than $280 million over the past eight years. Even after he was terminated in February as his investments turned sour, the company allowed him to keep as much as $34 million in unvested bonuses and put him on a $1 million-a-month retainer.
He continues to receive $1 million a month, Waxman said.
posted
I wish there were things about the financial world that DIDN'T make me angry these days. I'm tired of being angry and feeling I can't do anything about it.
-------------------- No longer eligible for government service due to lack of tax issues. Posts: 5178 | From: Up North | Registered: Dec 2005
| IP: Logged |
posted
And just last week, about 70 of the company's top performers were rewarded with a week-long stay at the luxury St. Regis Resort in Monarch Beach, Calif., where they ran up a tab of $440,000.
Unreal!!!Certainly helps explain how these guys are able to sleep at night...
Posts: 2383 | Registered: Apr 2006
| IP: Logged |
posted
This is the company that just spent 440K last weekend at a resort for the executives right?
-------------------- It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so. Posts: 6949 | Registered: Apr 2004
| IP: Logged |
posted
Market Scan 'Wasn't Us,' Former AIG Chiefs Say Ruthie Ackerman, 10.07.08, 6:25 PM ET
The buck may stop somewhere, but apparently not in the C-suite at American International Group. No less than three former chief executives told the U.S. Congress on Tuesday that it wasn't their fault that the mega-insurance company turned into a cash-strapped charity case.
On Tuesday former top executives at American International Group (nyse: AIG - news - people ) testified before the House Oversight Committee blaming everything but themselves for the company’s problems and subsequent bailout that cost taxpayers billions of dollars.
In prepared testimony, former Greenberg and Willumstad blamed short sellers, fair-value accounting standards and credit-rating agencies for the company's woes.
Another revelation was that the Office of Thrift Supervision sent a letter warning AIG in March about its lack of transparency and ability to oversee its financial products, said Waxman.
AIG launches asset sell-off to repay bailout loanTom Bawden in New York
American International Group, the insurance giant bailed out this month with an emergency $85 billion (£48 billion) government loan, announced plans on Friday to slim down operations dramatically while seeking new funds to repay its debts and return the group to profit.
It plans to dispose of at least ten businesses, including its International Lease Finance aircraft leasing unit; American General Finance, the consumer lender; and its life insurance and pension operations in America, Europe, Latin America and Japan. It might also sell its US car insurance unit. The group is to focus on its core property and casualty business, its foreign general insurance operations and its foreign life insurance unit.
It has not listed the assets for sale and is not expected to sell all the businesses that fall outside the core areas. Instead, it will evaluate offers before making decisions. AIG, which is working on the disposals with Blackstone and JPMorgan Chase, will sell as many businesses as necessary to pay off its loan and stabilise its position.
Edward Liddy, who began running the company after the government bailout, said: “Our goal is to emerge from this process as a smaller, but more nimble company that is solidly profitable and has attractive, long-term growth prospects. We'll have a very secure position. This is going to be a formidable company.”
Greenberg presses AIG over possible asset sale AIG struggles to survive financial chaos Mr Liddy, who disclosed that AIG has spent $61 billion of its loan so far, and expected to use more, said that he had received “dozens and dozens” of offers from would-be buyers,
Hugh Johnson, founder and head of Johnson Illington, the American fund manager, said: “AIG looks to be taking a very sensible approach to righting the ship. It can pay off its loan to the Fed and be left with assets that could be very profitable. There is plenty of interest for the assets.”
Warren Buffett, the world's richest man, Maurice “Hank” Greenberg, the former chief executive of AIG, and Munich Re, the world's largest reinsurer, are among potential buyers that have expressed interest in parts of the business.
AIG's Asian operation is expected to attract interest from rivals such as HSBC, Prudential, Aviva, China Life and ING. The group is hoping to sell its American life, retirement and pensions businesses and a minority stake in its overseas life insurance business in one deal.
Although AIG's Alico life insurance unit, which operates in Europe, Latin America, the Caribbean, the Middle East and Japan, is up for sale, the company hopes to retain a majority stake “if at all possible” in its AIA life insurance division, which operates in fast-growing countries such as China, Singapore and Malaysia.
While AIG's business is generally solid, it suffered billions of dollars of writedowns on insurance policies relating to mortgages and other securities.
The Government was forced to bail out the company to prevent a meltdown that would have dragged down much of America's banking system. Washington is holding a 79.9 per cent stake in AIG in return for the loan.In early trading on Friday, AIG's shares jumped by $0.72, or 18 per cent, to $4.73.
-------------------- Let the world change you... And you can change the world.
Ernesto "Che" Guevara de la Serna Posts: 4669 | Registered: Mar 2004
| IP: Logged |
posted
"the Fed will lend up to $85 billion to AIG, and the U.S. government will effectively get a 79.9% equity stake in the insurer"[b]
[b]The New York Fed will borrow up to 37.8 billion dollars in investment-grade, fixed-income securities from AIG in return for cash collateral," a statement from the Federal Reserve said."
I can't quite figure out what, but something isn't jiving in my mind about this since the Gov owns 79.9% of the company which should include assets.
Posts: 3255 | From: Los Angeles California | Registered: Jan 2006
| IP: Logged |
They are going to need to sell good assets along with the bad in order to get em off the books right? Why would anyone buy em otherwise?
So if they have enough good assets to sell them off on a one to one basis with the bad assets and still have a profitable multidimensional company left over why did we need to step with the bailout in the first place??
Don't get me wrong, if they actually pay back the loan with interest this quickly it will be a big boost to me personally that we might actually get through this without chewing through everyone's savings.
I get that they may have needed a short term loan to give em time to put the sale together but over 100 Billion? They are a big global company with over 100,000 employees but still, they go through 100 Bil a month? I don't think so.
-------------------- No longer eligible for government service due to lack of tax issues. Posts: 5178 | From: Up North | Registered: Dec 2005
| IP: Logged |
posted
Get ready tax payer to fork over our money I think to the tune of trillions before this is over IMHO.
Now we can't afford health care( that we get to buy with our own money) I always wonderd why all the plans on health that are put foward state that we get to buy our coverage. But our leaders always say the nation can't afford it.
Education is another subject that goes into the can not afford list.
Infrastructure is another big debate and can not afford.
So what can we afford?
Wars,bailouts to corporate America( funny how we can afford to give them huge sums of our money), and don't forget we can give them our forest so they can sell them(let us not forget the forestry service we can give them the labor force to help them havest and guard our own trees from us the owners.
Ain't free enterprise wonderful. I love all the self made free spirts.
And the Republican preach this freedom from the bully pulpit louder than most.
Just a few examples and thoughts.
I almost forgot there is no pollution but if you don't like the dirt you can always get off your lazy hippie asss with a shovel and clean it up.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
| IP: Logged |
posted
Yep, and considering we are already going to have to pay trillions in unpaid debts the republicans have made for us.....
Posts: 11304 | From: Fort Worth, Texas | Registered: Mar 2005
| IP: Logged |
posted
posted 09-10-2008 01:56 -------------------------------------------------------------------------------- "the Fed will lend up to $85 billion to AIG, and the U.S. government will effectively get a 79.9% equity stake in the insurer"[b]
[b]The New York Fed will borrow up to 37.8 billion dollars in investment-grade, fixed-income securities from AIG in return for cash collateral," a statement from the Federal Reserve said."
I can't quite figure out what, but something isn't jiving in my mind about this since the Gov owns 79.9% of the company which should include assets. -------------------------------------------------
Wally I know that you know what is going on.
the tax payers are securing the loan with there own assetts.
Don't forget this is corporate America and the fascist pigs that run the country now have to make thing easy for there masters.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
| IP: Logged |
quote:Originally posted by bdgee: Yep, and considering we are already going to have to pay trillions in unpaid debts the republicans have made for us.....
I am so glad this is not something both parties contributed to. bdgee thank you for helping me see the light that the other party is our salvation.
-------------------- It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so. Posts: 6949 | Registered: Apr 2004
| IP: Logged |
quote:Originally posted by The Bigfoot: Don't get me wrong, if they actually pay back the loan with interest this quickly it will be a big boost to me personally that we might actually get through this without chewing through everyone's savings.
.
That was the point I was trying to make to Glass... that AIG is making the effort to pay back the Gov't asap. They want to get out of this fast and get on with business by selling their assets to repay the Gov't. Guess Glass didn't know what I meant or didn't read the article i posted...
-------------------- Let the world change you... And you can change the world.
Ernesto "Che" Guevara de la Serna Posts: 4669 | Registered: Mar 2004
| IP: Logged |
quote:Originally posted by raybond: posted 09-10-2008 01:56 -------------------------------------------------------------------------------- "the Fed will lend up to $85 billion to AIG, and the U.S. government will effectively get a 79.9% equity stake in the insurer"[b]
[b]The New York Fed will borrow up to 37.8 billion dollars in investment-grade, fixed-income securities from AIG in return for cash collateral," a statement from the Federal Reserve said."
I can't quite figure out what, but something isn't jiving in my mind about this since the Gov owns 79.9% of the company which should include assets. -------------------------------------------------
Wally I know that you know what is going on.
the tax payers are securing the loan with there own assetts.
Don't forget this is corporate America and the fascist pigs that run the country now have to make thing easy for there masters.
quote:Originally posted by The Bigfoot: Don't get me wrong, if they actually pay back the loan with interest this quickly it will be a big boost to me personally that we might actually get through this without chewing through everyone's savings.
.
That was the point I was trying to make to Glass... that AIG is making the effort to pay back the Gov't asap. They want to get out of this fast and get on with business by selling their assets to repay the Gov't. Guess Glass didn't know what I meant or didn't read the article i posted...
actually i did read it.
and i'm saying i think it's unreasonable to expect to sell the assets in this market. nobody is in a buying mood for anything. and they forsure ain't paying full value for anything.
you seem to ignore my point.
lemme refresh your memory.
the morning that AIG announced it it needed a bailout? they asked for 35 billion.
by that afternoon 85 billion was the number.
why? because the market had deteriorated in one day.
but? they said that they had accounted for "extra" just to make sure...
now? they have burned thru that and need more...
i expect they'll need more in Nov to....
and? i expect the same pattern with the 700billion "mortgage" bailout.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
quote:Originally posted by The Bigfoot: Don't get me wrong, if they actually pay back the loan with interest this quickly it will be a big boost to me personally that we might actually get through this without chewing through everyone's savings.
.
That was the point I was trying to make to Glass... that AIG is making the effort to pay back the Gov't asap. They want to get out of this fast and get on with business by selling their assets to repay the Gov't. Guess Glass didn't know what I meant or didn't read the article i posted...
actually i did read it.
and i'm saying i think it's unreasonable to expect to sell the assets in this market. nobody is in a buying mood for anything. and they forsure ain't paying full value for anything.
you seem to ignore my point.
lemme refresh your memory.
the morning that AIG announced it it needed a bailout? they asked for 35 billion.
by that afternoon 85 billion was the number.
why? because the market had deteriorated in one day.
but? they said that they had accounted for "extra" just to make sure...
now? they have burned thru that and need more...
i expect they'll need more in Nov to....
and? i expect the same pattern with the 700billion "mortgage" bailout.
I am quite aware they will not get full value for their assets.... my point is they are at least making a effort to pay back any $$ to the Gov't and get out of this mess unlike other big corporations who aren't making the effort...
-------------------- Let the world change you... And you can change the world.
Ernesto "Che" Guevara de la Serna Posts: 4669 | Registered: Mar 2004
| IP: Logged |
posted
yeah, and they'll sell their bad assets to idiots with lots of credit? and no brains?... gimme a break... this is a cash and caryy market, they are at the mercy of the buyers...
you make excuses for them but the rest aren't making the effort? they all made bad decisions..
don't expect them to come out of this
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
quote:Originally posted by glassman: yeah, and they'll sell their bad assets to idiots with lots of credit? and no brains?... gimme a break... this is a cash and caryy market, they are at the mercy of the buyers...
you make excuses for them but the rest aren't making the effort? they all made bad decisions..
don't expect them to come out of this
I don't get you Glass... no one is arguing they made bad decisions/bets... that is not the point... the point is yes they borrowed alot of money but they are already working towards repaying that money... whether they will get a good deal on those assets is not the point... the point is to pay back the money to the Gov't... that is the bottom line... and no other company that the Gov't has bailed out has even remotely tried to do the same thing... this quickly... to payback their bailouts...
-------------------- Let the world change you... And you can change the world.
Ernesto "Che" Guevara de la Serna Posts: 4669 | Registered: Mar 2004
| IP: Logged |
posted
and no other company that the Gov't has bailed out has even remotely tried to do the same thing... this quickly... to payback their bailouts...
AIG is the only company that has been bailed out this way... there is no comparison.
you are the one who said i didn't read the article or understand it. i read it, i understand it, and i say the problems are worse than they are telling ..
i also know they asked for 35 then 85 and now 127 billion, and i predict it will be even more too....
and buyers will offer pennies on the dollar cuz they know the terms...
once you start bailing people out? it doesn't stop, it gets worse...
the 700 billion is now going to be used to buy stock in banks?
that's not what they promoted the bailout for. it was supposed to be used to buy bad notes... now its for stock... after that's gone? then they'll need more of that too...
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
posted
At least when congress sells the naming rights to the United States, the Chinese translation should be very comical.
-------------------- It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so. Posts: 6949 | Registered: Apr 2004
| IP: Logged |
quote:Originally posted by glassman: and no other company that the Gov't has bailed out has even remotely tried to do the same thing... this quickly... to payback their bailouts...
AIG is the only company that has been bailed out this way... there is no comparison.
you are the one who said i didn't read the article or understand it. i read it, i understand it, and i say the problems are worse than they are telling ..
i also know they asked for 35 then 85 and now 127 billion, and i predict it will be even more too....
and buyers will offer pennies on the dollar cuz they know the terms...
So in other words you don't want AIG to pay back the debt so they shouldn't even bother selling their assets even at pennies on the dollar.. Personally something is better then nothing and paying down that debt as much as possible and as soon as possible will lift the burden off the taxpayer more in the long run...
-------------------- Let the world change you... And you can change the world.
Ernesto "Che" Guevara de la Serna Posts: 4669 | Registered: Mar 2004
| IP: Logged |
posted
no, that's not what i'm saying either. re-read my posts. the leaks in the boat are bigger than the pumps can handle, and the buyers know this... they won't pay 10$ today for what they can buy next week at 1$... simple. keep throwing money into the pit? they'll keep carting off in wheelbarrows
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
| IP: Logged |
UBBFriend: Email this page to someone!
Printer-friendly view of this topic
![[BadOne]](graemlins/headbash.gif)
![[Roll Eyes]](rolleyes.gif)
Personally something is better then nothing and paying down that debt as much as possible and as soon as possible will lift the burden off the taxpayer more in the long run...
