Paulson: No government money for AIG, private sector solution not likely either... ok so wtf now?

[IAMX 3,055]

corporate welfare

"Corporate socialism"

How many times do I have to say it?

[kaydee457 13]

U.S. Sen. Robert Menendez (D., N.J.), a majority member of the Senate Banking Committee, said Tuesday on CNBC that he would “look favorably upon” using government money toward a bridge loan for American International Group Inc. Such a move would give the cash-starved insurer time to increase its liquidity but wouldn’t increase risks due to moral hazard or unfairly burden taxpayers. A failure of AIG “may very well present a systemic risk” to the nation’s economy given the company’s breadth of coverage, and that may be the deciding factor in whether the Federal Reserve gets involved in any rescue effort, Menendez said.

http://blogs.wsj.com/wallstreetcrisis/2008...vorable-option/

This is basically what the talking heads were saying last night. Apparently AIG dwarfs Bear and Lehman and nobody really knows the extent of their exposure in this mess.

They've sort of migrated into many business areas outside their core business in big ways.....and supposedly even AIG doesn't know the extent to which they're exposed and everyone fears the ramifications of a collapse as a result.

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AIG's former chief executive officer, Hank Greenberg ... said "it is in our national interest" that AIG survive. He argued that a federal loan wouldn't be a bailout because the company is solvent and merely faces a cash problem.

http://www.mcclatchydc.com/homepage/story/52591.html

[GiGii 4]

U.S. Sen. Robert Menendez (D., N.J.), a majority member of the Senate Banking Committee, said Tuesday on CNBC that he would “look favorably upon” using government money toward a bridge loan for American International Group Inc. Such a move would give the cash-starved insurer time to increase its liquidity but wouldn’t increase risks due to moral hazard or unfairly burden taxpayers. A failure of AIG “may very well present a systemic risk” to the nation’s economy given the company’s breadth of coverage, and that may be the deciding factor in whether the Federal Reserve gets involved in any rescue effort, Menendez said.

http://blogs.wsj.com/wallstreetcrisis/2008...vorable-option/

This is basically what the talking heads were saying last night. Apparently AIG dwarfs Bear and Lehman and nobody really knows the extent of their exposure in this mess.

They've sort of migrated into many business areas outside their core business in big ways.....and supposedly even AIG doesn't know the extent to which they're exposed and everyone fears the ramifications of a collapse as a result.

Oh, AIG has plenty of actuaries, they know their exposure quite well, hence the panic.

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Efforts Tuesday to find a private industry solution to American International Group’s troubles are stumbling, the New York Times is reporting. If that doesn’t change, the paper quotes “people briefed on the matter“ as saying, the troubled insurer could file for bankruptcy protection as early as Wednesday.

http://triad.bizjournals.com/triad/stories...15/daily23.html

[w¡n9Nµ7 §£@¥€r 123]

They wanna take AIG private. Probably not a bad idea, will free them from SOX and other onerous Federal regs so they can focus on the business.

CV Starr, headed by Maurice "Hank" Greenberg, said in a regulatory filing on Tuesday that it may try to gain control of American International Group through a merger, proxy battle or other strategies. CV Starr, which is already a major shareholder of AIG, may also consider buying assets from AIG, lending money to the company or taking part in a deal to take the business private, the filing disclosed. Greenberg was chief executive of AIG for roughly 40 years.

http://www.marketwatch.com/News/Story/Stor...p;siteid=yhoof2

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Several insurers could gain from the financial crisis rocking AIG, once the world's largest insurer, according to Citigroup analyst Joshua Shanker, who upgraded property insurer Travelers Cos Inc and U.S. business insurer Chubb Corp to "buy" from "hold."

Many of AIG's chief competitors would likely highlight their own credit ratings and financial stability as a major selling point in an effort to bind business flocking to them from AIG, Shanker said in a note to clients.

http://www.reuters.com/article/marketsNews...20080916?rpc=44

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The news of possible government support for AIG helped Wall Street bounce back from declines prompted by the central bank's decision to stand pat on its benchmark fed funds rate.

http://www.marketwatch.com/news/story/doll...mp;siteid=yhoof

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"AIG cannot fail," said Jim Cramer on Tuesday's "Stop Trading!" segment on CNBC. "It's the No. 1 institution in the world right now that must be saved. Everything else could go except for AIG."

Cramer said AIG needs to be saved in a "pass-the-hat-around fashion," referring to what he sees as a worldwide investment in its success. The middle bank index is doing well, he said, but that doesn't matter. "Frankly, I don't really care if my community bank is doing well," he said. "I care about AIG and the fate of Western banks, all of which have relied on AIG at some point for a risk transfer."

http://www.thestreet.com/_yahoo/funds/stop...E&cm_ite=NA

[Dan J 277]

#### up your company bad enough to put the entire market at risk, and then you will get a government bailout. The message this is sending to investors and companies, is go ahead exploit your company/markets, we will pick up the pieces.

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In a schedule change that reflects the rapidly shifting events on Wall Street, President George W. Bush canceled plans to speak to reporters following a meeting Tuesday of the President’s Working Group on Financial Markets.

Bush was scheduled to address a group of reporters at the end of the meeting, which began at 3:30 p.m. EDT. But the White House said he would be mum.

“We decided it would be best to limit public comment about markets today, and so there will not be press coverage of the President’s Working Group meeting this afternoon,” White House spokesman Tony Fratto said. “The President looks forward to the briefing by the Working Group.”

The working group, led by Treasury Secretary Henry Paulson, was meeting amid heightened uncertainty over ailing insurer American International Group. A meeting of regulators and industry figures at the offices of the New York Fed Tuesday could decide whether the firm survives and in what form. It’s unclear if any government funds will be used to throw AIG a lifeline. Paulson suggested Monday that he favored a private-sector solution to AIG’s woes, but the company reportedly needs up to $75 billion, a figure that may not be achievable without government intervention.

In addition to Paulson, the working group on financial markets includes Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Christopher Cox, and acting Commodity Futures Trading Commission Chairman Walter Lukken.

Tuesday’s meeting was Bush’s first with the working group since March 17, the day after the Fed provided a backstop for J.P. Morgan Chase & Co.’s purchase of Bear Stearns.

http://blogs.wsj.com/washwire/2008/09/16/b...aulson-meeting/

[joelunchbox 0]

AIG's former chief executive officer, Hank Greenberg ... said "[ the company is solvent and merely faces a cash problem.

Well, that makes a lot of sense. We aren't broke, we just don't have any money.

Well said.

thank god we let these idiots/greedy people run amok and make a lot of money so they can retire now.