I'm mostly into AIG. I think once they sell their ILFC, possibly by the end of the year, a GNW acquisition in the upper teens would make as much sense as buying back their own highly discounted stock with the proceeds. There would be huge administrative savings in combining their insurance segments. AIG is especially eager to grow their mortgage insurance business. With the caveat that most merger talk isn't worth the air it takes to speak about them, I still think AIG would be smart to consider it.
For what it;'s woth, S & P give GNW a buy rating.
"Our buy recommendation reflects GNW's steep
valuation discount versus peers, and our belief
that the valuation does not properly reflect im-
proving fundamentals and a strengthened bal-
ance sheet. '