Comments on: Time to junk AIG http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/ Now raising intellectual capital Sun, 08 Nov 2015 08:31:30 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Anthony Harrison http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5303 Wed, 30 Sep 2009 16:46:07 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5303 There was a faint probability for AIG to get out of trouble post the $180 billion effort from the Fed. However consecutive losses quarter after quarter is too much for any firm to take. And with the magnitude of losses AIG has consistently displayed in its filings, one could only guess how much more is left to see. AIG is probably fading until and unless the federal government really resuscitates it back to life… and I mean literally!!
The amount of leverage that AIG had exposed itself to, has finally taken its toll, but what makes bigger larger banks like JPM still tick! JPM is going relatively strong, trading at $45 and gradually improving. It’s probably safe to say that JPM is probably in a bigger mess than AIG. I found a few things about JPM which I wasn’t sure I should know. Throwing a blind eye to it, would be like being a hypocrite…
In a bid to bolster non-interest revenues (trading revenues) JPM assumed leverage far in excess of its optimum capacity. Its oversized derivative exposure (notional value) has exploded to almost $80 trillion – a staggering 5-6 times the size of the US GDP. What’s more, the market exposure it had so far has been hedged among the coterie of large banks, exchanging the market risk for counterparty risk! The slightest disturbance could cause a financial storm within these banks. This could affect the financial system as well, keeping in mind that the total volume of derivative exposures in terms of notional value exceeds $200 trillion in the US.
There’s more in this report. Here’s the link:
http://boombustblog.com/index.php?option =com_docman&task=doc_download&gid=238

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By: Jeff http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5030 Wed, 23 Sep 2009 21:15:01 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5030 AIG’s speculating shareholders are like the people who jump on the city bus after it’s been in an accident hoping to sue the city and profit from the taxpayers. They have nothing coming.

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By: J http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5023 Wed, 23 Sep 2009 16:34:46 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5023 “What’s astounding is that Goldman has managed to get AIG to entirely subsidize its occupancy at 180 Maiden Lane since June 2008. At a current tab of around $44 per foot, about $3 million in taxpayer dollars is being shuttled from AIG to Moinian every month.”

(New York Post Aritcle)

Sorry I misspoke about that being their HQ. I bet I am spot on about the G$ thing though too and that further bets (CDO’s and CDS) are going to blow up in the next 18 months and it may be worse than the last financial nuke. The G$ shorting their own AAA products via AIG CDS’s WREAKS OF FRAUD. Anyone who cannot smell that gigantic maggot infested 500 lb tuna sitting in the room doesn’t have a nose. Wall Street has become, again, a gigantc pozi scheme with a casino built smack dab on top of it, all of which was probably built on an ancient Indian burial ground. You’ll see. You who read this were warned. I’m not a financial expert, but I know people. I correctly predicted this fiasco when Glass-Steagal was repealed.

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By: Rose Eli http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5021 Wed, 23 Sep 2009 16:17:37 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5021 Curious there exists some bodies who support AIG in this thread. Those finance PR and people who speculate on AIG stock rally should understand that the world has changed!

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By: Trent http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5020 Wed, 23 Sep 2009 16:10:10 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5020 Right on Matt, this company should be dismantled immediately. We would be far better off as taxpayers if this company was dismantled and we took a loss, then if this zombie stuck around and waited for a rebound to sell its assets. The longer this “should have failed” business is around, the more damage it does to companies who are well run.

If we keep rewarding failure, all we are going to get is failure.

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By: A. Ron http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5015 Wed, 23 Sep 2009 15:37:56 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5015 To all those who are calling for Citigroup to be dismantled:

Taxpayers are sitting on a multi-billion dollar profit from C right now. Minimum $10 billion. And Citigroup is trying to shrug off government help. At least it is trying. Give Citigroup a chance.

What are you getting from AIG, other than getting jerked around? Forget this company and it’s $182.5 billion in loans. Put this company out of it’s misery already. It’s over.

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By: f belz http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5013 Wed, 23 Sep 2009 15:24:59 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5013 Seems like the position of the commentors depends upon if they have stock in AIG. Most corporations, like governments get inefficient if they get too large. The company is clearly too large and too sick to survive. It will most likely never be competitive unless it goes into high risk markets and illegal activity. Time to get out the crying towels.

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By: tim http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5012 Wed, 23 Sep 2009 15:15:56 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5012 actually, AIG is located on 70 Pine Street, a couple blocks from Maiden Lane. It’s also spread amongst several floors all over the Financial District and elsewhere. Maiden Lane is the address of the Federal Reserve Bank of New York. The first Maiden Lane LLC was created during the Bear Stearns fiasco, and was just what they came up with for names while meeting at the FRBNY. As far as I can tell, there is no “2 Maiden Lane” address.

GS management made the short CDS position largely without telling their traders. Traders were compensated for playing the game in the boom time, as they always are… so they played the game. Essentially, GS management second-guessed their traders — which is scary — except that they happened to be right — that one time. Michael Lewis wrote a great article about it maybe a year back. I don’t think anyone had a big enough vision to do what J describes in the CDS game of the MBS market. The scenario of further calls on those CDS’s seems unlikely to me too.

However, J’s final conclusion is spot on. Is AIG going to take further losses? Likely. Are they going to pay us back? Doubt it. Don’t put any more taxpayer money in the rabbit hole, and spin off the units of AIG.

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By: ddavid http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5011 Wed, 23 Sep 2009 15:15:37 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5011 Here we go again. The greedy hedge funds wiping-up fear to start another financial crisis, just so they can have something to short to make another killing on the backs of investors & the taxpayer.

Haven’t hedge funds done enough damage ?

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By: Howard Perry http://blogs.reuters.com/commentaries/2009/09/22/time-to-junk-aig/comment-page-1/#comment-5010 Wed, 23 Sep 2009 14:57:22 +0000 http://blogs.reuters.com/commentaries/?p=4480#comment-5010 BANK ROBBERIES!! Matt, I respect your journalistic skills and integrity. Please send-up something on the continuing robberies of the American public by the bankers and their minions in Congress. It’s preposterous that these over-paid golfers are able to detonate our national debt, repeatedly, and the Fed (which is a banking institution, not a government institution) wipes their bottoms when duty calls (sorry…).
I think that these high-paid thieves have held us at ransom with the threat of “systemic failure”. Too bad I can’t cash-in on systemic failures when I get my electrical bill.
Please start a “media drum-in”. The average American bimbo is completely powerless. There aren’t two political parties: there’s only one, and you know its name.

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