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Bailout Central: AIG Comes Back for More, Big Three on Deck
Posted Nov 10, 2008 11:49am EST by Aaron Task in Investing, Recession, AutosBailout central. Bailout nation. The United States of Bailout.
Take your pick of the above to describe the state of affairs in America, after the government's latest move to keep AIG from going under and widespread expectations of similar treatment ahead for the "big three" automakers.
While the fate of GM, Ford and Chrysler remain (officially) undecided at this juncture, the government today reiterated its stance that AIG is "too big to fail."
What started as an $85 billion loan in mid-September is now a $150 billion package of support for the ailing insurer, which reported a whopping third-quarter loss of $3.42 per share Monday morning.
The latest government package features:
- The government purchasing $40 billion in preferred stock (the first TARP money used for a non-bank entity).
- A $60 billion loan to replace the original $85 billion loan (and at a lower interest rate, to boot).
- A $22.5 billion purchase of residential mortgage-backed securities from AIG and a separate $30 billion purchase of its CDOs.
As Henry and I discuss in the accompanying video, the concern is that this latest bailout won't be the last for AIG, and why are AIG shareholders still benefiting from taxpayer funds? Also, if there's seemingly endless money for financial sector bailouts, why shouldn't automakers (or anybody else) expect the same kid-glove treatment?
126 Comments
__A_YAHOO_USER__ - Monday November 10, 2008 12:04PM EST
Anymore stimulus to bolster our economy.............I am feed up fo doom and gloom...............Is there anthing better.....
JustinT - Monday November 10, 2008 12:05PM EST
BUY GOLD. Even Obama cannot pull the U.S. out of this cesspool of debt by drunken sailors set on collapsing the dollar
- Monday November 10, 2008 12:06PM EST
Let AIG fail - why tax payer has to pay for bail-out. Instead of the bail-out divide the bail-out money by all tax paying adults in the country and pay them the money. It will help the economy during the Holiday season and will avoid thousands of companies filing chapter 11 - like circuit city and many more to come.
Steve - Monday November 10, 2008 12:09PM EST
Isn't AIG the posterchild of hedgefunds. Go figure, every corrupt politician and greedy Wall Street guru have their dirty little finger in this cookie pot. Protect you own, while the rest of the country goes down. Prepare to hang from your toes.
IRA - Monday November 10, 2008 12:13PM EST
Pelosi is a credit to this country. You vote for Bush? If yes, you have zero creditibility on anything but stupidity.
IRA - Monday November 10, 2008 12:13PM EST
Pelosi is a credit to this country. You vote for Bush? If yes, you have zero creditibility on anything but stupidity.
Yahoo! Finance User - Monday November 10, 2008 12:13PM EST
Pelosi is a credit to this country. You vote for Bush? If yes, you have zero creditibility on anything but stupidity.
madmilker - Monday November 10, 2008 12:14PM EST
will someone please take out some insurance on tat printer who is printing all this money...and invest in INK and PAPER.
sportsmadness - Monday November 10, 2008 12:15PM EST
Finally I got the name of the AIG chief "Edward Liddy. What a complete and absolute moron. Tie him to a car bumper and drag him 10 miles and a dusty gravel road.
Kenneth - Monday November 10, 2008 12:17PM EST
Great. Here comes Obama to raise my taxes (I'm apparently "rich", too bad Obama has no idea how expensive it is to live in NYC), and we can use that money to bail out companies. GM, Ford, Chrysler? Who the eff cares? They have been cash burning dying businesses for 10-15 years now, just let them die, they will NEVER be profitable again!
Yahoo! Finance User - Monday November 10, 2008 12:18PM EST
I would like proof that the executives of AIG have had/or will get their total compensation packages capped. I really doubt it. Somehow these criminals have it figured out.
Harold - Monday November 10, 2008 12:19PM EST
IT ' S ALL GOOD. LOL COME ON STOCKS...LET'S RALLY ON THE BAD NEWS AGAIN. LOL
sportsmadness - Monday November 10, 2008 12:24PM EST
Harold keep up with the hallucinagens you are taking ..... they will keep you from the real world.
Yahoo! Finance User - Monday November 10, 2008 12:24PM EST
Let all the incompetent financial companies fail, and let the few successful one take over their assets for pennies and rebuild the financial system a sound basis. Let Darwin prevail. Interfering with market forces to subsidize and perpetuate bad management is the worst possible use of taxpayers money. I am amazed that the very same people whose incompetence caused this crisis are now entrusted with fixing it at taxpayers expense.
John Galt - Monday November 10, 2008 12:25PM EST
Meanwhile I am paying my bills, trying to make ends meet. Who's the schmuck ? Me thats who. Now I hear people with credit card debt are looking for relief as well. It just gets worse, and worse.
ronald - Monday November 10, 2008 12:28PM EST
I think aig got enough money allready it's about to start cutting ceo salaries and lose some peopleand the auto industries needs to start cutting some ceo salaries and the hourly workies don't need their big rates either bring them down to what other hourly workers make. Thank You
__A_YAHOO_USER__ - Monday November 10, 2008 12:28PM EST
Al Cappone is far better than this thieves.......If he is alive he is laughing and saying shame on you......Will he ask for tong on this thieves....
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sportsmadness - Monday November 10, 2008 11:56AM EST
AIG will continue to fail with its current moron for a chief that runs it. Watch the AIG video and you will see what I mean. The AIG chief is a complete idiot. Almost as stupid as Nancy Pelosi.