Posts Tagged ‘AIG’

The Fed Passes The Cash

Tuesday, November 17th, 2009

What a surprise!

Taxpayers weren’t served very well by the Fed during the AIG bailout, according to the special inspector general.

Haircuts just couldn’t be taken, that would have meant disaster, so several hundred billion were cobbled together and handed over to AIG’s counterparties. So Goldman Sachs got richer, the Fed became a structured investment vehicle of the US Treasury, and Wall Street got a flashing green light on all future moral hazard.

And of course these are the same folks doing such a bang-up job with the economy today!

Gorilla says: “Regulators who spoon feed crooks shouldn’t be surprised when the spoons go missing!”

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Keep ‘Em In The Kitchen

Wednesday, October 14th, 2009

AIG paid a retention bonus to a kitchen assistant!!!

Apparently the need to slice and dice extended well beyond credit default swaps, while fundamental contempt for the taxpayer remains the blue plate special.

Now that the government owns 85% of AIG, it’s trying, without much success, to limit bonuses and claw back those paid out during the halcyon days of bankrupting the firm.

Gorilla isn’t very hungry: “Perception is 90% of the meal. We still don’t know how many spoons are missing, let alone what they’re worth!”

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Our Very Own Stabilized Zombie

Monday, September 21st, 2009

AIG, of course!

The GAO says AIG’s condition has “stabilized”, whatever that means, but long-term survival depends, surprise!, on “the long-term health of the company, market conditions, and continued government support.”

We’re in for $185 billion so far, we’ve softened the bailout conditions 3 times, and yet another AIG-sponsored Congressman thinks we should ease the debt burdens further.

Bottom line? Taxpayers are unlikely ever to be paid back.

AIG, like Citibank, Merrill, GM, Lehman Brothers, Bear Stearns, Fannie, Freddie and BoA, should have been nationalized, its assets sold off, its shareholders and debt holders wiped out, and its directors and management fired. This would have enabled the country to regain some control over Wall Street and to restore the principle of moral hazard.

Instead, Washington continues to play kick the can down the road, so the salaries and bubbles continue, because there’s always hope for the future in Movingforwardville!!!

Gorilla concludes: “Remember the next time someone mentions Goingbackwardville: There’s no again without AIG!”

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$351 Billion And Counting

Friday, August 7th, 2009

The first $171 billion would be non-performing mortgage loans held by Fannie Mae at the end of June.

House prices remain 10-15 percent above historical trends and unemployment continues to rise.

Oh, and that $180 billion bailout bonanza called AIG made a profit!

Well, not exactly, insurance revenue is in fact way down, but the accounting gimmicks performed better than expected!

Gorilla says: “At this rate, we can shave the heads of our bondholders in less than 10 years!!!”

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Ponzier Than Thou

Friday, July 31st, 2009

This excellent NY Times chart illustrates what a massive fraud AIG was and still is.

The total cost so far to America: $182 billion and climbing. We currently own 85% of this fabulous capital destroying enterprise.

As the accompanying article mentions: “Nothing is wrong with spreading risks to other companies, a practice known as reinsurance, when it is carried out with unrelated, solvent companies. It can also be acceptable in small amounts between related companies. But A.I.G.’s companies have reinsured each other to such a large extent, experts say, that now billions of dollars worth of risks may have ended up at related companies that lack the means to cover them.

“An organization like this one relies on constant, ever-growing premium volume, so it can cover and pay for the deficits,” said W. O. Myrick, a retired chief insurance examiner for Louisiana.”

Truer words that Ponzi might have spoken.

Or, as Gorilla says: “Madoff may be gone, but his memory lives on in the hearts and wallets of the American taxpayer”.

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