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AIG has debts that no honest man can pay

September 24, 2009

Here’s more evidence that it would be better for the federal government to order the break-up of AIG sooner rather than later.

Former AIG chief executive  and chairman Robert Willumstad, in a speech today, says the taxpayer-supported insurer “owes the government more than it has the ability to pay back.”

TheStreet.com’s Lara Tara LaCapra covered Willumstad’s talk and has all the details.

Bonus coverage: Dealbreaker on White House economist Austan Goolsbee calling out current AIG CEO Robert Benmosche. Finally.

Comments

I firmly believe that AIG bailout was one of the biggest
mistakes in US financial history!!!

Posted by Robert Jones | Report as abusive
 

Matt,

Give it a rest. Your AIG crusade is getting tiresome. Comments by a former CEO for all of 3 months doesn’t equate to “evidence” that it would be better to break up AIG sooner rather that later. You continue to miss the point. The goal is to get as much money back for the taxpayers. Selling assets at firesale prices is self-defeating because we, the taxpayers, own most of the company now. I’d rather get, say, 80 cents on the dollar over the next five years rather than 40 cents on the dollar over the next year. Capice? And by the way, the former CEO isn’t saying breaking up AIG sooner rather than later is a good idea. On the contrary, he seems to imply the current CEO is on the right track.

I think yYour visceral hate for the company – though understandable in many ways – is clouding your judgment.

Posted by Dave Grassmon | Report as abusive
 

I have no visceral hate for AIG, never dealt with them, don’t own a share. But I am for liquidation.

Keep it running so that taxpayers may get their money back? Delusion my friend. The money is gone, forever.

The best return taxpayers can get out of AIG is complete liquidation just like Enron. Forget about the money. The benefit of a devastating liquidation of the company, along with criminal fraud indictment of a dozen former top AIG executives, is that it clears the smell of a decomposing corpse.

That will do wonder with regaining confidence. With that the money will return.

Take all the records of AIG and open them to the public. That will produce dozens of books each will sell a million copies. The records will become the raw information for case studies in business schools around the world. The dead corpse of AIG is more useful than the rotting zombie now.

Posted by The Real Deal | Report as abusive
 

Bailing out AIG was a huge mistake because it showed the world that we were just kidding about letting the problem financial institutions die to purge the rot from our system.
now we have given them so much more than they are worth that we can guarantee we lose most if not all of our investment in them.

Posted by steve | Report as abusive
 

They should have left all of those failing financial companies go under. The pain would have been educating and immensely useful going forward. That’s how capitalism works in the long term.

Posted by Jim Beam | Report as abusive
 

The pile of money they wasted should have been made available as seed money to anybody with a business plan.

Posted by Jim Beam 2 | Report as abusive
 

AIG rubbish must go! It is capitalism. Let’s the fail one fail and let’s the market truly decides the real winner. Bear, Lehman, Merrill, Countrywide…. all gone, why AIG can still have the privileges to stay independent and alive?

Given the AIG management repeatedly claimed they would repay the loan they owed US taxpayer, who can prove? Who can make sure that AIG can or is willing to pay back us. The reputation of AIG is close to nothing and who should still care its “claim.

Unless we still naively think the financial industry has the only men and women who do real work in America and this industry should be given special privileges, we must be fair to all fail companies, including AIG.

Posted by Rose Eli | Report as abusive
 

I do find it ironic, that during the accounting scandals earlier in the decade, Enron, Worldcom, Tyco, etc… heads rolled. This time, not so much. Where are the big indictments, jail time, etc? Except for Bernie Madoff and some other Ponzis, none of the corporate financial executives have even been touched. It smells of a cover-up. Are we to assume that no one was liable for this mess?

Now regarding AIG, I hope people realize that the taxpayer funds being funneled into AIG are going to cover their counter-parties. AIG is like a clearinghouse for successive bailouts to banks worldwide. This is similar to the current role of Fannie & Freddie. They have become repositories of bad debt, clearinghouses for bad loans, to get them off the books of other companies, so that their capital bases appear stronger.

Therefore, we are not just funding AIG, but all the banks/finance institutions. The taxpayer will never be completely made whole by AIG. However, the funds will work through the system, coming back through fees to the FDIC & Fed, increased loan activity, higher capital ratios, etc… It is unfortunate that this is not emphasized more often, maybe people would be more understanding if it was.

Posted by Greg | Report as abusive
 

AIG is NOT a clearing house!

More than half of the bailout money, fraudulently called ‘loan’, is intended for the counter-parties of AIG. These are US and foreign big banks who have bought credit-default swaps (a type gambling contract) from AIG, and who have ‘won’ their gambles.

Either AIG or the US government pay them off or else lawsuits will follow, which will surely liquidate AIG. The biggest counter-party of these gang is Goldman Sachs. (The counter-parties of the AIG bailout money, and the amount they received, have been released to the public.) The only reason $85 billion was ‘loan’ of AIG is Paulson (ex-Goldman CEO) want to use taxpayer’s money to bailout his gang of cronies foremost of which is Goldman.

Enron is the prime example of a corporate executive team gone criminally insane from an overdose of casino capitalism. The AIG bailout is the most profound corporate-government corruption in US history. It is a shining example of the deep degeneration of American big power elites into a bunch of rotting rats.

Posted by The Real Deal | Report as abusive
 

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