mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Mon Feb 23, 2009 5:10 pm Post subject: AIG Set to Report $60 Billion Loss |
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| Quote: |
| CNBC has reported that American International Group (AIG), the insurer previously rescued by the government, may report a loss of as much as $60 billion when it releases earnings on Monday. The loss could threaten the 80% stake that the U.S. Federal Government bought in the company. As such, the Treasury may be forced to yet again add to its current $150 stake in the enterprise. When asked about the matter, Treasury Spokeswoman Stephanie Cutter told reporters �no comment.� |
http://www.dailyfx.com/story/market_alerts/fundamental_alert/AIG_Set_to_Report__60_1235433106290.html
This will be the largest loss in the history of the United States. A half a trillion in credit default swaps were held by AIG when they blew up, and we have no idea how those CDS contracts are preforming. The 150b dumped into this company could potentially be doubled and will still not save the company.
Confidence has been totally lost in the markets. The DOW is at May 97 levels. Yuck.
http://www.calculatedriskblog.com/2009/02/party-like-its-1997.html
http://www.calculatedriskblog.com/2009/02/cnbc-aig-asking-for-more-government.html
Institutional investors (about 97% of all trading in the markets) are selling heavily because they don't know how to value assets. There is to much uncertainty in the markets because the Obama administration is issuing muddled proposal one after the other. This isn't working. |
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