Black Hole AIG Needs Another $10 Billion

[formercia]

http://finance.yahoo.com/tech-ticker/article/142790/Black-Hole-AIG-Needs-Another-10-Billion


Posted Dec 10, 2008 09:02am EST by Joseph Weisenthal in Investing, Newsmakers, Recession
Related: aig, gs

From ClusterStock, Dec. 10, 2008:

After all the money AIG's had shoveled at it, why does it need another $10 billion? Because, as the Wall Street Journal reports, the money its gotten from the government are supposed to pay off its bad CDS bets -- essentially, the money went to retiring the underlying CDO --- but it's also stuck $10 billion on what were just bad bets, not necessarily designed to help clients manage risk.

The $10 billion in other IOUs stems from market wagers that weren't contracts to protect securities held by banks or other investors against default. Rather, they are from AIG's exposures to speculative investments, which were essentially bets on the performance of bundles of derivatives linked to subprime mortgages, commercial real-estate bonds and corporate bonds.

These bets aren't covered by the pool to buy troubled securities, and many of these bets have lost value during the past few weeks, triggering more collateral calls from its counterparties. Some of AIG's speculative bets were tied to a group of collateralized debt obligations named "Abacus," created by Goldman Sachs.


OY!

[ailsagirl]

1. Those bastards!! Do they want to go on another pricey junket???

:mad:

[Ganja Ninja]

2. Not another cent for these bastards.

Let them go into bankruptcy and then deal with them.

[Marie26]

3. I don't understand

why the Big Three had to get down on their hands & knees & beg for a measly $15 billion, while AIG gets $100 billion+ w/no questions asked & no end in sight. Have they even had a hearing about the AIG bailout?

[TexasObserver]

4. Next they'll want a monthly allowance of $10 billion.

[Initech]

15. Now with your monthly gift of $10 Billion you will recieve a photo of an AIG exec in need.

The $10 billion will help them live extravagantly and plan huge getaways in Costa Mesa, California. Please help the executives, will you?

[SammyWinstonJack]

5. The nerve!

:grr:

[brentspeak]

6. Take the money out of the AIG exec's own pockets

This is a joke that we're bailing out these crooks.

[formercia]

7. "Abacus," created by Goldman Sachs.

Give AIG $10 Billion to make sure Goldman Sachs gets paid.

[Bozita]

8. I wanna know how many executive jets are owned/leased by AIG. ... And why is nobody asking?

[FarCenter]

9. The money may not be owed to Goldman

The article doesn't say whether the money is owed to Goldman. It just says that the bets were "tied" to Abacus CDOs.

Most likely the counter party is not Goldman. More likely it is a hedge fund, probably in London, with foreign investors.

[QueenOfCalifornia]

10. How do I

get in on this? I need way less than AIG "needs" - I could pay off everything for about $200 grand....

[Bake]

11. Someone, please remind me why we HAD to bail out AIG?

I seem to have forgotten.

Bake

[natrat]

12. and barney the street walking congressional whore will do his best to accomodate

along with the rest of the dem enablers

[dixiegrrrrl]

13. Inflation...money just doesn't go as far as it used to.

[OhioChick]

14. Screw them...

Let the bastards go bankrupt.

[justabob]

16. NO NO NO NO NO NO

This shit makes me physically ill. When does it stop?

[Omaha Steve]

17. I don't like to use bad language when kids might be reading but....

^#)^!&##$** x 5!

[spanone]

18. congress will hand it over with a smile while fucking detroit up the arse

[Ichingcarpenter]

19. They are handing out bonuses and calling them retention pay

I thought is was important enough to start a thread on it
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4633900


Dec. 9 (Bloomberg) -- American International Group Inc., the insurer whose bonuses and perks are under fire from U.S. lawmakers, offered cash awards to another 38 executives in a retention program with payments of as much as $4 million.

The incentives range from $92,500 to $4 million for employees earning salaries between $160,000 and $1 million, Chief Executive Officer Edward Liddy said in a letter dated Dec. 5 to Representative Elijah Cummings. The New York-based insurer had previously disclosed that 130 managers would get the awards and that one executive would get $3 million.

“I remain concerned, as do many American taxpayers, that these retention payments are simply bonuses by another name,” Cummings said in letter responding to Liddy.

AIG, which received a U.S. rescue package of more than $152 billion, has been criticized for saying it will eliminate bonuses for senior executives while still planning to hand out “cash awards” that double or triple the salaries of some managers. The payments are designed to keep top employees at AIG while Liddy seeks to sell units and pay back the federal government, which owns 79.9 percent of AIG.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKI...

[Octafish]

20. AIG ''invested'' a measley $100 million in Manchester United. Berezovsky likes UK soccer, too.

AIG in $100 Million Deal to Sponsor Manchester United

Usmanov Gunning for Bigger Arsenal Share

Small world. And very, very bad.

[tabbycat31]

21. what, to take another vacation?

Seriously, don't ask for any more.