NY Times: "A Question for A.I.G.: Where Did the Cash Go?"

[Marie26]

NY Times, October 29, 2008

The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.

Donn Vickrey, a forensic analyst, is skeptical of A.I.G.’s past reports. “You don’t just suddenly lose $120 billion overnight,” he said. Mr. Vickrey says he believes A.I.G. must have already accumulated tens of billions of dollars worth of losses by mid-September, when it came close to collapse and received an $85 billion emergency line of credit by the Fed. That loan was later supplemented by a $38 billion lending facility.

But losses on that scale do not show up in the company’s financial filings. Instead, A.I.G. replenished its capital by issuing $20 billion in stock and debt in May and reassured investors that it had an ample cushion. It also said that it was making its accounting more precise.

Mr. Vickrey and other analysts are examining the company’s disclosures for clues that the cushion was threadbare and that company officials knew they had major losses months before the bailout.

Bail-out or cover-up? Or a little of both?

[dkofos]

1. Both!!

[gratuitous]

2. Where did the cash go? What are you, some kind of socialist?

What business is it of anyone's what AIG did with that $123 billion? They're not answerable to the ultra-liberal New York Times or the ultra-liberal hippies or anyone else! Tell 'em, Dick Cheney.

[Marie26]

5. True

The free market corrects all - why should AIG be forced to file those pesky accounting reports at all? Do you know how much valuable time they wasted creating those fake profits & fraudulent reports? Accounting is just a drag on the market & should be done away with. Luckily Paulson is leading the charge & giving banks money w/o any requirements at all.

[Marrah_G]

3. Someone has some 'splainin' to do!

[RainDog]

4. guillotine!!!!!!! - stop looting the treasury - or this should be their fates

[Romulox]

6. Doesn't Speaker Pelosi have a large position in AIG herself?

Yes. Yes she does.

Which puts her bailout boosterism in a new light...