Treasury Said to Be Considering AIG Conservatorship

[ozymandius]

Source: Bloomberg

Sept. 16 (Bloomberg) -- The U.S. Treasury is considering taking over American International Group Inc. under a conservatorship as one option to address the insurer's crisis, according to two people briefed on the discussions.

Executives from AIG, bankers and Treasury and Federal Reserve officials are meeting today on the company's situation at the New York Fed. A number of options are under being discussed to fill a shortfall of $75 billion to $100 billion in funding, one of the people said. The talks are continuing, he said.

Goldman Sachs Group Inc. and JPMorgan Chase & Co., which have been leading efforts to find a private-sector solution, informed the Fed that such an effort would be difficult, the person said. Under another option, the Fed would extend a loan to New York-based AIG, according to a person informed of the matter.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a11UW1B8w8uM&refer=home

---

Guess what? Every American taxpayer for generations in the future is about to get a huge bill.

[mike_c]

1. a huge bill for services rendered to keep the wealthiest 1 percent...

...from feeling the pain they've generated for the rest of us. And the red state sheeple will just keep on voting against their own best interests.

[kimmerspixelated]

8. I know!

It just boggles the mind, doesn't it? And furthermore, most people don't realize that the play money used in monopoly is basically just as valuable as what they might carry around in their wallets. It's always been a phoney game anyway, the facade of green!

[whistle]

2. The U.S. Treasury dumped $96 billion into the money supply just during today

...and the Fed left the interest rate unchanged. So in order to conserve AIG they will have to do this every day for god knows how long.

This is insane!

[madrchsod]

3. where`s the rest of the world in this bail out?

this is a world wide corporation. fuck`m, let the world worry about their stake in this company..

http://en.wikipedia.org/wiki/American_International_Group

[mrJJ]

4. conservatorship ?

Legal Standing? I don't think so.

[Hugin]

5. I can almost just barely understand the Fanny/Freddie conservatorship... But, this?

Somebody needs to put their foot down.

[ozymandius]

9. Exactly!

AIG is not a bank. They are an insurance company licensed to do business in New York. They just happen to be a really, really big insurance company that did not know when to say when. Their bad business model centered on bad investments in toxic markets whose transaction records were noted on scraps of paper, cocktail napkins, discarded envelopes, grocery store receipts. Whatever.

And now we, the taxpaying public, living and unborn, are being goaded into covering their brainless hubris. Fuck that noise.

[Hardrada]

20. Fuck that noise! I coudn't agree more. They are trying to

socialize the losses again!

[dysfunctional press]

33. socialize the risk, privatize the profits- it's how american capitalism works.

well- usually works.

the compliant populace is the key.

[Wapsie B]

6. Fire up the money-machines boys!

Those money presses at the Treasury will be glowing red from printing enough paper currency to cover this mess. Amazing things happen when the adults are in charge in D.C. Raid the Treasury indeed. How about for every bailout we seize the assets of every top executive of these financial organizations? Make it hurt where it counts.

[trthnd4jstc]

7. The Federal Reserve Board offering more money weakens the dollar, also...

Everytime our Government bails out a company or places it into conservatorship, where are the stocks that our country should obtain for this taxpayer help? The fascist are all about our taxpayer dollars bailing out their corporations, but they have no sense of fair play. We the people should get something for the taxpayer dollars going out to them.

[denverbill]

10. It's not socialism if it helps the rich and is paid for by the rest of us. n/t

[Hannah Bell]

11. Question: a while back, Warren Buffett (Berkshire Hathaway) was reputed to be one of the big holders

of aig. Is that still the case?

If so, why doesn't he bail it out? Since he's one of the richest men in the world, his net worth dwarfing whole countries & so forth.

[tpsbmam]

21. Info:

http://www.bloomberg.com/apps/news?pid=20601087&sid=asXKpmxEf1.o&refer=home

Buffett `Thought to Be' in AIG Talks, Insurance Insider Says
By Andrew Frye

Sept. 15 (Bloomberg) -- Billionaire investor Warren Buffett's Berkshire Hathaway Inc. ``is thought to be in talks'' with American International Group Inc. about a possible investment, the Insurance Insider reported, citing unidentified sources.

AIG's talks with potential investors, including buyout firms, are ``advanced,'' the publication said.

=================

http://seattletimes.nwsource.com/html/businesstechnology/2008182116_aig160.html

Also, the insurer was said to be in "rescue" talks with Buffett.

Berkshire Hathaway spokeswoman Jackie Wilson said Buffett was not available to comment on the AIG-rescue reports.

Typically, Berkshire does not comment on any deals before they are completed

[Hannah Bell]

34. ok, so he apparently is one of the big holders. and i repeat, why should

ordinary people bail out people like warren buffett?

They have the wherewithal to eat their losses, and if they wind up a couple of billion poorer - oh well.

[Lone_Star_Dem]

12. They expect our tax dollars to bail out insurance companies now?

An insurance company who ran their business very poorly and as a result of such are on the cusp of filing for bankruptcy. An insurance company that is seen as too risky for the financial sector to even want to loan to? Due to all of that they then somehow become the responsibility of the taxpaying Americans? This is insanity.

[AllentownJake]

15. They always have

If an Insurance company fails the states the policies were written and other insurance companies in those states traditionally and legally pick up the tab.

[Lone_Star_Dem]

26. Outstanding claims are paid from the individual states guaranty funds

I believe that property coverages are canceled and customers have to seek coverage elsewhere. Life, health and annuities policy holders are given a choice of transferring to another company deemed financially stable by the state guaranty group. However, that is in no way the magnitude of the financial burden on taxpayers required to prop up this failing company.

[AllentownJake]

38. 80 year old paying a premium for the past 30 years on a UL 1,000,000

policy.

We will pay that in increased premiums or with state money one way or the other.

[ozymandius]

13. Is Greenberg Making A Play For AIG?

In American International Group's darkest hour, former chairman Maurice Greenberg wants the company's current chieftain to know he's there to help--and maybe a little more.

"I do not know whether or not it is now too late to save AIG (nyse: AIG - news - people )," Greenberg wrote in a letter today to AIG Chief Executive Robert Willumstad, as the firm teetered on the edge of bankruptcy, pleading with Fed bankers for a lifeline. "But we owe it to AIG's shareholders, creditors and our country to try."

Another option: Greenberg might just try to take back the company. In a filing with the Securities and Exchange Commission on Tuesday, he said he continues to retain Perella Weinberg to advise on the business, operations and financial condition of AIG. He also said that C.V. Starr, its affiliates and Greenberg may pursue a variety of options, including acquisitions of assets, loans or other financings, or further investments. Greenberg controls about 12% of AIG's shares through C.V. Starr & Co. and personal holdings.

http://www.forbes.com/business/2008/09/16/aig-insurance-greenberg-biz-wall-cx_lm_0916aigupdate3.html

---

This is not an altruistic move by Mr. Greenberg. It smells like a contest of chutzpah to me.

[AllentownJake]

14. We will have to pay for AIG one way or another

Since they are an insurance company their products are guarenteed by a state corporation and the NAIC. All other insurers in the states they do business and the state itself will have to jump in to cover policies.

The thing I find odd is if they are truly NY based. NY is the strictest state in the union.

[Buttercup McToots]

16. Ozy...read this...it is bad...glad I'm not in EFT's

There were major disruptions today in ETFs and ETCs because AIG is behind them. Topic covered on here:

http://www.greenenergyinvestors.com/...showtopic=4246


See also:
http://www.greenenergyinvestors.com/...ndpost&p=59292

Quote:
Got real gold or fool's gold?

Many will find out the hard way that while they thought they were investing in commodities, they were in reality lending money to AIG.

MUHAHAHAHAHAHHAHAHAHHAHAHAHAHHAHAH

http://www.etfsecurities.com/en/news...ews_080916.asp
Commodity Securities and AIG

16/09/08

ETF Securities Limited (“ETFS”) wishes to clarify a number of matters with respect to various of its listed securities and in particular with respect to Commodity Securities, which are backed by matching contracts from AIG Financial Products Corp. and guaranteed by American International Group, Inc (collectively “AIG”).

....

A number of firms who were making markets in the Commodity Securities stopped doing so yesterday afternoon. The ETFS group is actively working on possible ways of providing investors with liquidity, including:

* Arranging suitable collateral for market-makers; and
* Permitting holders to lodge redemption notices directly with the issuer (currently only Authorised Participants are permitted to do this).

However, we can give no assurance as to whether these or other alternatives can be implemented at this stage.

[Buttercup McToots]

17. This is called a "OH, SHYTE!" moment...

"...ETFS Livestock, which has plunged 81.06% since yesterday's close, while ETFS precious metals and ETFS petroleum have dropped 50.68% and 51.01% respectively..."
http://www.citywire.co.uk/adviser/-/...aspx?ID=314454

:puke:

This is why the Feds will save AIG...betcha

[jdog]

35. Holy cr!!!! n/t

[ozymandius]

19. Sounds like a matter for bankruptcy court.

In receivership these buyers probably have useless pieces of paper. Securities fraud? I'll bet lawsuits will be filed saying so. Does the government really want to get involved in this?

Hank Greenberg wants his old company back except for the nasty bits.

AIG has hired a law firm to start drawing up bankruptcy papers.

AIG may be worth more dead.

[Buttercup McToots]

22. Bingo moment...

There is another thread just started by UIA, I think...

[Buttercup McToots]

23. Ooops

Ir was Dj13

[Buttercup McToots]

24. Barclays Stockbrokers are displaying this announcement:

Barclays Stockbrokers are displaying this announcement:

Important Information in trading of Exchange Traded Commodities (ETCs)
Please be aware that following an LSE announcement a number of ETCs have been placed into an ongoing auction period and, as a result, are not available for trading. This is a market wide issue.
Should you be placing an order online for an ETC, please ensure you monitor the status of your order as affected ETCs will be rejected as pricing is not currently available.
Barclays Stockbrokers will continue to work closely with the LSE to monitor the situation and will provide updates on our Message Centre

[ozymandius]

27. So the whole market is frozen.

If Barclay's cannot deal in ETCs then who can? Now what? Any knowledge to predict about this is above my grade level.

[Buttercup McToots]

29. AIG Likely to Get Loan, Avoid Bankruptcy: Faber

AIG Likely to Get Loan, Avoid Bankruptcy: Faber

--------------------------------------------------------------------------------

AIG Likely to Get Loan, Avoid Bankruptcy: Faber

Can it be? And, more importantly, is it dollar positive??

http://www.cnbc.com/id/26743248
__________________

I wish I could collect a bunch of cowboys so we could round up all of the Washington politicians, hogtie them and brand their foreheads with the words "America First."
- Charley Reese (2008)

“As the global financial crisis unfolds, one thing is certain: The major investment and commercial banks who have wrecked our economy and financial system are now successfully sucking unlimited amounts of money from the people's Treasury to bail themselves out.”

[tpsbmam]

18. I'm so glad I'm not young, I wish I were older and I'm worried as hell about the

welfare of younger generations. This is a nightmare now -- what will the future look like?

[Buttercup McToots]

25. Here is comes...

Money market fund breaks the buck!

--------------------------------------------------------------------------------

Here is comes...

http://www.marketwatch.com/news/stor...%7D&dist=msr_1


Quote:
NEW YORK (MarketWatch) -- One of the first and largest money market funds has put a seven-day freeze on investor redemptions after the net asset value of its shares fell below $1, in a rare instance in the fund industry of what is called "breaking the buck."
Primary Fund (RFIXX: ) , a $64 billion fund managed by money market fund inventor The Reserve, said late Tuesday that its $785 million holding of Lehman Brothers Holdings debt has been valued at zero.

As of 4 p.m., the value of the fund's share was 97 cents. The Reserve said that redemption requests received before 3 p.m. will be paid out at $1 a share.

While Primary Fund's Lehman holding was small compared to the fund's overall size, the fact that it froze redemptions reflects a surge in redemption requests by investors.

"Effective today and until further notice, the proceeds of redemptions from The Primary Fund will not be transmitted to the redeeming investor for a period of up to seven calendar days after the redemption," The Reserve said in a statement. Officials at the company declined to comment further.

Money market funds pride themselves on their liquidity and the safety of their investments. All money market shares are priced at $1 -- a figure so important to the industry that fund companies take losses to keep the share price from dipping below $1, which is known as breaking the buck.

"They didn't just break the buck, they shattered it," said Don Phillips, managing director at investment research firm Morningstar Inc. (MORN: 59.28, -0.78, -1.3%) .

[ozymandius]

28. Jeebus!

The money's gone.

[Buttercup McToots]

30. new link

http://www.marketwatch.com/news/story/money-market-fund-breaks-buck/story.aspx?guid=%7B56A2CEE5-5A53-4A27-A4BA-585CFBE173A4%7D&dist=msr_1

[wordpix]

36. Sen. Chris Dodd (D-CT) looking into BushCo involvement

He is head of the Senate Banking Comm. From his website:

" September 15, 2008

The economic crisis facing our country is deepening, as we saw over the weekend with the failure of Lehman Brothers and the sale of Merrill Lynch. To fully understand the implications of these events, we need to learn more about the Administration’s involvement, and its plans going forward. At the Treasury Secretary’s request, I have postponed tomorrow’s hearing."

Hmm, "its plans going forward..." Break the bank, take the money and run?

[Buttercup McToots]

31. From kpetes thread

kpete (1000+ posts) Tue Sep-16-08 07:51 PM
Original message
Money Mkt Busts the Dollar: A Major Shoe Has Just Fallen Updated (Bloomberg)
Advertisements Edited on Tue Sep-16-08 07:59 PM by kpete
``This is uncharted territory,'' said Peter Crane, president of Crane Data LLC in Westborough, Massachusetts, which tracks money-market funds. ``That's certainly a stunner.''
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5O...

http://www.dailykos.com/storyonly/2008/9/16/182843/496/...

Money Mkt Busts the Dollar: A Major Shoe Has Just Fallen Updated
by mikeypaw
Tue Sep 16, 2008 at 03:56:10 PM PDT

A major shoe in the financial industry has just fallen that may have far reaching impact for every day Americans. The Sacred $1.00 share value for money funds has just been breached. This is being reported by Bloomberg News and has the potential to rile the markets even more than they already are.

....................

Money Market funds are a staple of the financial industry and are the place where most people park their funds when they are looking for a safe return. These funds are routinely considered to be the same as cash. That is to say that you can get to your money at anytime without penalty and without delay.

***********************


Sept. 16 (Bloomberg) -- Reserve Primary Fund, a money-market mutual fund with $64.8 billion in assets as of Aug. 31, fell below $1 a share in net asset value because of losses on debt issued by Lehman Brothers Holdings Inc.

...................

Unable to Prop Up Fund

Spokeswoman Ming Lee Hatch said she couldn't immediately comment on whether the company planned to secure credit to support the fund or wind it down.

Carl Lantz, an interest-rate strategist in New York at Credit Suisse Securities USA, said the fund's failure ``exacerbates some of the flight-to-quality into Treasuries.''

Crane said Reserve Management probably was unable to prop up the fund before halting redemptions because it lacked the backing of a large institutional owner.

``Reserve just didn't have the deep pockets to buy troubled securities out,'' he said.

Boston-based Evergreen Investment Management Co. said yesterday it had secured support from Wachovia Corp., its parent, to protect three money-market funds from losses linked to debt issued by Lehman. The funds' Lehman holdings totaled $494 million.

more at:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a5O...

[Politicalboi]

32. AIG=CIA

Why get it right when the government will bail you out. I think they are laundering this money. It's all up for grabs at this point. USA Going out of business sale. Everything MUST GO!

[Demeter]

37. Ozy, I Think We Need a 24/7 Economics Alert Thread

If they keep pulling stunts like this it won't be safe to sleeep at night.

I am having a hard time believing it. I'll be having a worse time sleeping.

[krkaufman]

39. Time for a return to the progressive income tax rates of the mid-1900s

Obviously, the rich benefit the most from the government, and so need to start paying their way.

[Buttercup McToots]

40. K & R

!!

[mia]

41. K & R

Lots of good information on this thread.

[Snazzy]

42. Government steps in again, bails out AIG with $85B

WASHINGTON (AP) - Another day, another bailout. The U.S. government stepped in Tuesday to rescue American International Group Inc. (AIG) (AIG), one of the world's largest insurers, with an $85 billion injection of taxpayer money.

It was the second time this month the feds put taxpayer money on the hook to rescue a private financial company, saying its failure would further disrupt markets and threaten the already fragile economy.

AIG said it will repay the money in full with proceeds from the sales of some of its assets.

....

http://apnews.myway.com/article/20080917/D938DK8G0.html

[Liberalynn]

43. An Aspect that is Begining to Worry Me

Is any one else worried that when it comes down to it, we are starting to in essence "federalize" the financial market.

Where can I buy a :tinfoilhat: