AIG To Repay US $183B; Also, Pigs Soon to Fly
“We believe there is an excellent chance that we can repay the government.”
-AIG Chief Executive Officer Edward Liddy
>
I find the above exceedingly hard to believe; Here is the full context:
“American International Group Inc., the insurer bailed out by the U.S., has an “excellent chance” of repaying the government, outgoing Chief Executive Officer Edward Liddy said today at the company’s annual meeting. AIG plans to reduce its debt under a Federal Reserve credit line by $25 billion by handing over stakes in two non-U.S. life insurance units, the insurer said last week. The New York-based company has tapped about $40 billion from the line.
AIG has received four bailouts, totaling $182.5 billion, after agreeing in September to turn over a majority stake to the U.S. when the company was overwhelmed by losses on bets tied to the housing market. In addition to a $60 billion credit line, the rescue includes $52.5 billion to buy mortgage-linked assets owned or insured by the company, and an investment of as much as $70 billion.
Why is that doubtful? Well, in 2006, they had revenues of $113 billion and profits of $14 billion — about 25% of her profits were due to AIG FP.
Now, with their reputation in tatters and their revenues cut in half, their “Enterprise Value” at a mere $91 billion, and a market cap at just over $3 billion, they are going to pay back $182.5 billion?
I’m not holding my breath . . .
>
Source:
AIG Has ‘Excellent Chance’ To Repay U.S., Liddy Says
Hugh Son, Erik Holm, and Tian Huang
Bloomberg, June 30 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=a4rJdEHwyE9E
Tweet
Facebook
Reddit
Digg this!
June 30th, 2009 at 9:12 pm
found this.
http://economistsview.typepad.com/economistsview/2009/06/bankslaughter.html#comments
bankslaughter!
June 30th, 2009 at 9:33 pm
AIG Has ‘Excellent Chance’ To Repay U.S., Liddy Says
And I can eat thunder and crap lightning!!
June 30th, 2009 at 9:38 pm
The odds that AIG (particularly in its current form) will ever be profitable much less able to repay the taxpayers is probably only slightly greater than the odds it will exist at all a few years from now.
June 30th, 2009 at 9:48 pm
Libby’s statement is disingenuous for what it doesn’t say. Let’s give him the benefit of the doubt and suppose that AIG can indeed refund the $183BB out of asset sales and so on. What about the $1.6 trillion of “hard-to-value” assets which he admitted to Congress were still on their books? They just haven’t had get bailed out on those yet, because they are saving the best for last.
June 30th, 2009 at 10:09 pm
AIG has about as much chance of repaying the US $183B as toolbox Dennis Kneale’s “Recession Is Over” call has of coming to pass. Not holding my breath on either.
June 30th, 2009 at 10:12 pm
Libby is selling a product. He should be fined for failing to providing any proof or the slightest bit of support for his statement. Yes, state your projected profit for the upcoming year. Libby has absolutely no idea if AIG will be able to pay daddy back.
June 30th, 2009 at 10:26 pm
The article did mention “the outgoing Chief Executive Officer Edward Liddy”. You can say what you want when you’re not going to be there for follow up questions.
June 30th, 2009 at 10:31 pm
amount spent or committed to bailing out AIG != amount AIG owes government
I have no idea how much AIG actually owes, but some of the $183B is in untapped credit, some used months ago for maiden lane ii and iii, and $25B of debt was just recently exchanged for preferred stakes in AIG’s Asian operations.
June 30th, 2009 at 10:41 pm
Lying with ease is a skill I haven’t been able t0 master (not that I’ve tried) but these guys do it with such alarming alacrity, it’s almost a second language for many of them.
June 30th, 2009 at 10:51 pm
The link below shows that pigs really can fly:
http://tinyurl.com/cb3v9p
In any case, a far more likely event that AIG repaying the money.
June 30th, 2009 at 11:00 pm
BR: i’m sure you saw the story about how AIG failed to sell its two crown jewels (AIA and ALICO) so they just assigned values to them and transferred them to the Fed? (http://fridayinvegas.blogspot.com/2009/06/aig-dumps-toxic-assets-on-fed.html)
that’s how they’ll repay the rest of the money – by assigning their own internal valuations to all the other businesses which they can’t sell and transferring them to the government (even though we already own them!)… Toxic assets all over again
June 30th, 2009 at 11:35 pm
I see their gaming the emini again. Look at the pump at 8:10, 9:40, 9:45 and 10:20 (all times est). Green shoots are a hallucination.
June 30th, 2009 at 11:35 pm
AIG Discloses New Risk on Derivatives Sold to Banks (Update3): “American International Group Inc., the insurer bailed out by the U.S., said that valuation declines on credit-default swaps sold to European banks could have a “material adverse effect” on the company’s results.”
Sounds like AIG won’t repay the $183B anytime soon.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a3c4Dhbj8JYM
July 1st, 2009 at 12:19 am
He knows about the side letter agreement with the FED to devalue the dollar by 50% over the next five years or so.
July 1st, 2009 at 12:21 am
On another note, Dennis Kneale getting a full fledged blog beat-down on Tyler Durden’s and Denninger’s sites.
July 1st, 2009 at 12:41 am
@Manwich
Kneale asked sometime last year “What is the VIX?” The traders read the financial blogs (the good ones like TBP, ZH, NC, CR) and have enough views to garner their attention. Think about it. If people are reading blogs and getting better information then they are not watching us.
July 1st, 2009 at 12:51 am
@AmenRa: Exactly. CNBC and other MSM outlets clearly feel threatened and are getting worried, and rightfully so. I no longer watch anything on CNBC or Bloomberg. Ditto for the other “news” channels. Never watch any of them anymore. Sometimes I’ll listen to Bloomie radio while in the car via XM but that’s it. I don’t even have it on at home anymore during the day, and I have to say, I’m not nearly as aggravated every day. I also didn’t re-up my WSJ and Economist subscriptions (although I may change my mind on the Economist at some point). I still get our local paper here in Minny and the Sunday NYTimes, but I’m getting close to cancelling one or both of those as well in order to pay for an Economist subscription. The mainstream media as we know it is slowly dying a painful death and will be irrelevant in the near future if they do not substantively change their ways. I’m enjoying every second of it.
July 1st, 2009 at 2:06 am
@AmenRa, what’s ZN?
July 1st, 2009 at 4:16 am
AIG… Bush’s magnum opus of Slaveowner Socialism… er… a… Compassionate Conservatism.
July 1st, 2009 at 4:36 am
ZH stands for Zero Hedge by Tyla Durden.
http://zerohedge.blogspot.com/2009/06/dennis-lets-zero-hedge-have-it.html
http://en.wikipedia.org/wiki/Fight_Club
July 1st, 2009 at 5:30 am
I just feel like the fox (Wall Street) is having its way with the chickens (taxpayers). We are being plucked, fucked, stuffed and eaten alive.
It’s all just Madoff Madness. Bernie Knock-offs running around doing basically the same thing who aren’t going to turn themselves in. (The whole damn thing is out of control.)
July 1st, 2009 at 6:50 am
hmm . . . let’s see . . .what country does this remind me of-
Federal Reserve Bank of San Francisco President Janet Yellen said the prospect that policy makers will leave the benchmark U.S. interest rate near zero for the next several years is “not outside the realm of possibility.”
July 1st, 2009 at 6:59 am
hmmm . . . I wonder where they will be exporting to? A bit optimistic I would say-
“China’s recovery will be U-shaped, with export growth returning to “normal” by the end of this year or the start of 2010, central bank adviser Fan Gang said at a forum in Beijing today. The economy will revive “faster or earlier” than elsewhere because China limited the development of asset bubbles, including in housing, Fan said.”
July 1st, 2009 at 10:27 am
I take this to mean that AIG has put all its chips on “red 42″ in the CDS roulette game, with zillion-to-one odds against them, but with the smiling assurances from the casino owners that the wheel is fixed and they’re gonna be a big winner.
Hope springs eternal …
July 1st, 2009 at 11:03 pm
Pigs will fly!
http://benbittrolff.blogspot.com/2009/06/aig-ready-to-blow-up-again.html
Have you seen this article?
http://market-ticker.org/archives/1177-BOOM!-More-Obfuscation.html