A.I.G. Uses $61 Billion of Fed Loan

[grytpype]

Source: New York Times

The American International Group said on Friday that it had already drawn down $61 billion of the $85 billion emergency bridge loan it received from the Federal Reserve two weeks ago, an announcement that startled credit ratings agencies.

The emergency loan was supposed to buy the company time to sell its troubled assets in an orderly manner. But the sell-off has not yet begun, and now the insurer faces the additional pressure of trying to sell the businesses at a time when potential buyers are having trouble borrowing money.

...

It was a series of downgrades in A.I.G.’s credit ratings in mid-September that set off certain contractual provisions requiring the insurer to post billions of dollars of collateral with its trading partners, a catastrophic event that led to the huge federal bailout.

Since then, A.I.G. has not released any information about whether additional ratings downgrades would lead to any additional collateral calls.

Read more: http://www.nytimes.com/2008/10/04/business/04insure.html?ref=business

---

AIG might fail even with the $85 billion federal loan!

Which means the $85 billion is a loss for the treasury!

[Eric J in MN]

1. But we should let Henry Paulson make all decisions on the $700 billion.

(sarcasm)

[Juneboarder]

2. One action comes to mind...

:puke:

[SpiralHawk]

3. "Smirk." - republicon fatcat cronies

[Haole Girl]

4. Fuck AIG

I've been fighting with them for 3 weeks, now, to get my money out of an annuity. Apparently, the surrender fees are not enough for the greedy bastards.

:grr:

[CountAllVotes]

24. wow, that really does suck!

now I know why I've never being particularly impressed with annuities as an investment. Does AIG handle all/most annuities or do you know?

I hope you are able to get something back from these greedy bastards before they go broke AGAIN!

:kick:

[mbperrin]

5. B-b-b-b-b-b-but Herr Hank told me right on the tee-vee that

we'd make money off these LOANS! Soooooooo, therefore, this story must be wrong!

Yeah, that's it, don't worry, Herr Hank knows best, that's the ticket.....



:spank:

What's German for "I told you so, you dumb bastards!"?

[geomon666]

6. We (with the exception of a few) already knew this was going to happen.

This 700 billion dollar bailout was a bandaid on a bullet wound. It wasn't going to fix shit.

[mcollier]

7. How the fuk

does a company blow through $60 billion in 2 weeks?

All I can say is BRACE YOURSELVES.

[ohio2007]

10. Bonus $ being kicked back nt

[customerserviceguy]

16. Yeah, we have yet to hear

about what bonuses are being passed out to congratulate themselves for getting the feds to pony up some dough to keep the Ponzi scheme going.

A.I.G. = P.I.G.

And we're paying for the lipstick.

[tama]

27. Trying to roll debt

when not up to the ankles but to the neck and then two meters on top. It's called "fractional banking". Pretending to have money you never had. In English - fraud.

[Zhade]

32. We sure did, but those here who fell for it won't admit they were wrong.

NT!

[Celeborn Skywalker]

33. I fell for it.

I do admit I was wrong. I thought it might buy enough time for until Obama got in and made some changes in laws involving Wall Street and regulatory guidelines. Apparently I was wrong and the greedy bastards just blew through the money in less than a week.

[ronnie624]

46. Obama can't change laws,

and Congress is too heavily influenced by corporate money. Campaigns are not financed out of any sense of generosity. Corporate executives expect a very specific result for their cash. I wouldn't expect any changes in our legislative process any time soon.

Obama is no doubt a decent human being, but like the rest of us, he is trapped in a system of political power that favors wealth over the will of the people. reforming it will require more than just trudging to the polls in a clueless fog to vote once every four years. Massive organization at a grass roots level will be needed - an end run around the corporate propaganda establishment, essentially - and when I look around at my fellow citizens, and I hear the things they say about American politics and governance, it becomes obvious that it is not going to happen in my lifetime.

During the last several weeks, as the general public has become groggily aware of the current financial news, Ive attempted to coax opinions out of those around me (In my line of work, I see many people every day), and person after person has said things to the effect that our government is becoming more and more socialist. Socialist! When I attempt to explain that a system where corporations exert the greater preponderance of influence over our government is more akin to fascism, and that medicare, medicaid, social security and the VA are literally the embodiment of socialism, they stare blankly, and then scurry away as if I'm trying to shatter reality.

I have little confidence in what the coming years may bring.

[Honeycombe8]

8. Nah. AIG is going to sell parts of its businesses off as sep. cos. I doubt...

there would be any trouble finding buyers.

But what will be left will be a much smaller AIG company, so I guess that will mean layoffs, anyway, and some other businesses failing who were dependent on the BIG AIG company for the bulk of its business.

They said it wouldn't be fast or easy. Sigh. Who the hell is responsible for this mess? Let's take 'em out back and beat the shit out of 'em.

[xchrom]

9. recommend

[kmac3]

11. First visible sign of bad judgment . . . .

SO WHY IS THIS A SURPRISE?

This is exactly why I was against this plan and likewise the 700B bailout plan.

It will not solve the present problem .... this is Bush's way of accomplishing two goals:
1) A method to effectively empty the treasury so if and when the Dems take over they will financially be unable to accomplish any of the programs they based their campaign on.
2) To continue to line the pockets of his rich crony friends . . . the very ones that through greed created this entire mess.

I am so very disappointed in Congress.

[Dover]

12. They are ALSO eligible to partake of the $700 Billion Bailout program just passed.

A.I.G. is required to pay back its borrowings from the Fed within two years. Mr. Clark said that to raise the money, the rapid drawdown of the loan made it likely that A.I.G. would have to sell off more businesses than Standard & Poor’s had expected.

This would leave “a much smaller and less diversified A.I.G.” to pay off a proportionally bigger debt to the Fed, Standard & Poor’s said in a statement.


..snip..

In response to questions, Mr. Liddy said it was impossible to say exactly how much money A.I.G. would have to raise to pay back the Fed and emerge from its crisis as a smaller company with adequate capital.

“It’s kind of a Rubik’s Cube,” he said. “We need to be very flexible” because of the fluid economic environment.

He said that in addition to using the $85 billion Fed loan, A.I.G. would be able to participate in the $700 billion bailout program signed into law by President Bush on Friday. The additional help from the Treasury might ease some of its financial burdens, Mr. Liddy said.

[lonestarnot]

13. Oh Gee am I surprised.

:sarcasm:

[jimmybama]

14. A.I.G. uses 61 Billion of Federal Loan

This 61 Bil was used when Bank of America called its credit default swap from AIG on loans from Lehman Brothers. BOA Bought61 Bil in portfolios from Lehman Bros. The portfolios were junk and they called them on it. Lehman Bros. said they didn't have the money and BOA forced AIG on their credit default. There are trillions of dollars owed on these credit default swaps. I heard this from the Washington Federals savings bank former president who was on the Jim Bohannon show this past week. He expalined that there was enormous criminal activity going on in the regulatory and bank examination sector. These examiners were looking the other way!!!

[mcollier]

15. Spot On!

Jimmy knows best!

[earth mom]

17. Where in the hell did TRILLIONS of dollars go then?

:wtf:

p.s. NO DOUBT AIG will be back SOON asking for more money!!! :grr:

[Dover]

19. Thanks for that info........and WELCOME to DU!

This is just crazy isn't it?

[Lone_Star_Dem]

39. Welcome to DU, jimmybama

:hi:

[Marie26]

45. Great post

These "credit default swaps" are just a sucking black hole of, what, $50 trillion dollars?

[Gregorian]

18. Obama's going to be inheriting a total wreck.

I think we're only seeing the beginning of America's downturn. I hope I'm wrong. But in a way I have seen it coming for thirty years. This specie didn't know when to stop.

We're filling a hole that is full of cracks. The money just falls through. I think Kucinich's plan is how this should be implemented. This bailout feels like Reaganomics all over again.

[Politicalboi]

20. AIG is CIA

I hope they sink.

[ronnie624]

21. For what?

To "buy" more "insurance" from its own subsidiary in the Cayman Islands or The Isle of Man?

[Haole Girl]

22. Or partying in style at the posh St. Regis Monarch Beach Resort

:grr:

link: http://www.nowpublic.com/tech-biz/aig-bailout-spending-spree-execs-party-california

AIG bailout spending spree, execs party in California

by Tina Kells

October 3, 2008 at 01:44 pm

The OC Watchdog Blog has reported that American International Group corporate executives, and representatives of various AIG subsidiaries, were partying in style at the posh St. Regis Monarch Beach Resort (see attached YouTube videos for a look at the hotel), in Southern California, just 2 weeks after taxpayers bailed out the insurance corporation for $85 billion. Was this really an effective use of taxpayer money?

Last Friday, as the rest of America was in financial crisis overload, preparing to watch the Presidential debates, and reeling from the aftershocks of Congress rejecting the first bailout plan; executives and insurance representatives from AIG subsidiaries were living it up with champagne and caviar in a swanky ocean front hotel.

No word yet as to what the conference was about, or why it wasn't canceled after the taxpayer funded bailout went through, but AIG did offer a weak explanation that the event was "not what it seems." Now that the American taxpayer is effectively footing the bill for these types of questionable corporate decisions, an off-the-cuff answer is as insulting as the event was inappropriate.

[ronnie624]

23. Absolutely outrageous! Thanks for the link. n/t

[Marrah_G]

34. Sorry this is not what you think

This conference was a trip that independent agents earned over an 18 month period. AIG had a contractual agreement with the agents and the trip is part of the independent agents commissions.

Had AIG canceled the trip they would have had to compensate the agents for the full value of the trip.

The agents are independent contractors with AIG.

We do not do enough business with AIG to qualify for the trip. But we do work with another company that does the same thing. Most of our agents will be heading to Europe in next year on the same sort of vacation bonus.

[Haole Girl]

35. Oh, it's never what it looks like, is it?

Explain, also, if it is simply not what is looks like that they will not cash in my annuity. I've been fighting for the remaining balance back since Sept. 16th.

:grr:

[Marrah_G]

36. I am no fan of AIG

But frankly the trip and your annuity are two very different things. They have nothing to do with each other.

I will explain again that the trip is part of the commissions that independent insurance agents get when they do a certain amount of business with a company over a period of 8 months. All the companies I know do this. It is an incentive for an agent to use one company more then another's.

Since this particular trip was put in place 2 years ago (or more)AIG had a contractual agreement with those agents. To break that agreement would have resulted in lawsuits.

This was part of the pay agreement with the agents.

As for your annuity, there isn't much I can do to help you on that one. Just keep asking for the next higher up person. Bitch alot. Eventually they will fix their error. What is their reason for not cashing it in?

[Haole Girl]

37. I certainly hope - frankly - the posh party and my annuity are 2 different things.

What is their reason for not cashing it in? THAT is the question I am asking!!! :grr:

[Marrah_G]

38. Have you spoken to them on the phone?

If so, what did they say to you?

I am just trying to help here.

[Haole Girl]

40. Tried to. Lines are busy. Have the investment banker at Wells Fargo....

supposedly trying to get through to them. He sent the fax on Sept. 16th. Still no response.

I think they (A.I.G.) are probably stalling at giving anybody their money back. :-(

[Marrah_G]

41. okay

I'm on the aig agent site right now trying to find you a better number to call.

[Haole Girl]

42. The banker at Wells Fargo said he had "internal numbers"

Thanks, though. Kind of you to offer.

The bottom line is: they are a crappy company that gives crappy customer service.

[Marrah_G]

44. I agree- I hate dealing with them.

I much prefer the customer service of Americo or Fidelity and Guarantee.

[Marrah_G]

43. Try this one

800-487-5433
Policyowner Call Center Number

or

1-800-424-4990
Hours of Operation: 8:00 a.m. and 6:00 p.m. Central Time, Monday through Friday.

Let me know how it goes.

[Haole Girl]

47. I tried all of their 800 numbers

But I'll double-check, when I get home, and make sure I haven't tried these too.

Thank you!

[tama]

25. When will they learn

"Buying" something with loaned money is not buying, it's debt.

[Tutonic]

26. Gonna go through it like it's flavored water.

N/T

[dothemath]

28. Not to worry .................

What you talking about, Willis?

We, the taxpayers, will simply demand that AIG take another 85 billion, or a number of their choosing, and remind them we can keep this up forever. After all, it is not real assets we are giving them, it is simply paper. Debt.

So far, it would seem, only a few lousy 'furriners' and a handful of capitalists in this country know what is in store for this nation. We will be gone in less than a generation. Oh, the land will be here and a few natives will survive.

Just look at Zimbabwe, et. al. of their ilk. They have been doing this for thousands of years. What are you complaining about, again?

Never been under martial law, might be fun. Our leaders are smarter than us, let them handle things. Yada, yada, yada.

[Haole Girl]

29. Sunday kick

Because I want everyone to see what AIG is all about.

:kick:

[rcsl1998]

30. Plan = Drain Treasury Before Inauguration Day nt

[pa28]

31. Wall street has already taken a trillion.

Soon they'll be coming back for more. This time the argument will be the previous trillion will go to waste unless we double down - the hook is set.

I know we're all working on different assumptions but mine is that throwing money at the problem without really understanding it won't solve anything. This reaction to cough up the money was mostly fear based with very little analysis.

Once again the Bush administration frightened Congress and the public into consent and once again we the wrong decision was made. Enough please!