Michelle Malkin » AIG’s reward for failure: Another $30 billion in taxpayer-backing; Update: $61.7b 4th quarter losses

AIG’s reward for failure: Another $30 billion in taxpayer-backing; Update: $61.7b 4th quarter losses

By Michelle Malkin • March 2, 2009 08:56 AM

Screw up, move up. It’s how Obama cabinet officials get ahead. And it’s how Washington’s favored failing businesses get more of your money. The first $85 billion bailout under Bush didn’t work. The second $38 billion under Bush didn’t work. So, hey, how about tossing another $30 billion down the hole?

So much for President Obama taking a stand against Bush’s failed policies, eh? But don’t worry. We’ve got Bozo the VP looking out for us this time, making sure all the money is tracked on the Internets. Oh, wait. Transparency doesn’t apply to the Big Business bailouts. Just trust them:

American International Group Inc., the insurer deemed too important to fail, may get a commitment for as much as $30 billion in new government capital after a record quarterly loss, said two people familiar with the matter.

The insurer may also be allowed to make lower payments on government loans, said the people, who declined to be identified because there was no public announcement. New York-based AIG may forfeit part of stakes in its two largest non-U.S. life insurance divisions to lower the firm’s debt, the people said.

AIG, first saved from collapse in September with a package that grew to $150 billion, had to restructure its bailout after failing to sell enough units to repay the U.S. Firms including banks relied on AIG to back more than $300 billion of assets through derivative contracts as of Sept. 30, making the insurer a “systematically significant failing institution” that has to be propped up, according to the Treasury.

“The government has accepted all the downside with little chance of upside,” said Phillip Phan, professor of management at the Johns Hopkins Carey Business School in Baltimore. “They are trying to protect the global financial system from a complete meltdown.”

AIG, which agreed in September to turn over an 80 percent stake to the government, is set to announce a fourth-quarter loss of about $60 billion tomorrow, according to three people familiar with the matter. The company’s board was scheduled to meet today to vote on the revised bailout, according to two other people familiar with the matter.

***

Update: Down, down, down…

American International Group Inc., once the world’s largest insurer, said Monday it lost $61.7 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history, amid continued financial market turmoil.

The results come as the U.S. government also Monday announced a restructuring of a bailout plan for the troubled insurer, extending $30 billion in additional aid to the company.

New York-based AIG said it lost $22.95 per share in the last three months of 2008. It lost $5.3 billion, or $2.08 per share, in the same quarter a year ago.

Revenue fell to negative $23.8 billion, as the company had to reverse gains it recorded from investments in past quarters.

The latest results include $7.2 billion in unrealized losses and credit valuation adjustments at AIG Financial Products, the source of credit-default swaps, and pretax losses of $21.6 billion tied to the declining value of AIG’s investment portfolio.

AIG’s general insurance business swung to a loss on $2.8 billion in net realized capital losses. General insurance net premiums dropped 16.3 percent to $9.2 billion, and net premiums earned fell 5.9 percent to nearly $11 billion.

Adjusted to exclude certain items, operating losses totaled $37.9 billion, or $14.17 per share, versus a loss of $3.2 billion, or $1.25 per share, last year.

***

Fox Business reporter Cheryl Casone points out that AIG’s losses can be translated to:

$670,652,173/day

$465,730/minute.

Posted in: AIG, Subprime crisis

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#636867

On March 2nd, 2009 at 2:20 pm, happyscrapper said:

On March 2nd, 2009 at 2:09 pm, Pasadena Phil said: There is simply no room for factual arguments in these new Dark Ages.

You got that right. And by the way, Phil, I am starting to understand what you have been talking about with Michael Steele. He definitely needs to grow a pair. He is being way too conciliatory! We need someone with a backbone. I am starting to get an uneasy feeling about him. Did we get someone who is just too nice?
#636881

On March 2nd, 2009 at 2:34 pm, Pasadena Phil said:

happyscrapper: Off subject but I hope you watched “60 Minutes” last night on Bobby Jindal. It was an excellent piece. He does seem to have fire in his belly. Part of his being sold to America may require that we get used to his Indian mannerisms. It’s not that he’s a wuss but that Indians are milder mannered than we are used to.

But he comes across as a stud when he is himself in front of the locals and talking to reporters. That’s the Jindal we need to see more often, not the over-rehearsed oddity we saw last Tuesday.
#636883

On March 2nd, 2009 at 2:36 pm, swede said:

There is simply no room for factual arguments in these new Dark Ages.

Phil
Understood but I tend to disagree. Factual argument is exactly whats needed, and people are hungry for. Its just trying to separate fact from the crap.

“Facts are stubborn things, but statistics are more pliable.” Mark Twain

I guess I’m hesitate to buy into the dark ages scenario. People said conservatism was dead when LBJ, Jimmy Peanut and Billy Jeff were elected. It’s not dead now either. I’m not a big Rush fan, but he hit some great shots the other night.
#636897

On March 2nd, 2009 at 2:58 pm, Pasadena Phil said:

swede: you missed my point. My very career is predicated on living in a world of facts. What I am saying is that facts are no longer allowed to steer discussions. The scientific community itself is being cowed into signing off on global warming by political funding pressure.

And it works both ways. As scary as the Global Warming crowd may be, the Intelligent Design crowd is pretty scary too. Try getting into a logical discussion about evolution with the Huckleberries. Religion is NOT science!

We all need to stop and think. Truth matters and arriving at truth is hard enough when everyone is devoted to pursuing it with integrity. It is impossible once our elites merely tell us what to believe “just because”.

Our “fourth estate” has become a propaganda organ for the most leftist element of the Democratic Party. Our colleges and universities are becoming centers of political indoctrination. If this isn’t reversed soon in America, what hope is there for freedom and democracy anywhere?
#636902

On March 2nd, 2009 at 3:04 pm, Pasadena Phil said:

swede: I don’t have any qualms with what Rush says, it’s where he plants his feet that bothers me. He needs to avoid the trap that has been set for him by assuming the mantle of “speaking for the Republican Party”. He fell into that trap last election and to this day, still insults people like me who voted “none of the above” by saying that we voted for Obama. He either speaks for conservates or the Republican Party. Until he clarifies that, I consider him to be a useful tool for the “other Democratic Party”, the GOP.

We need friends who won’t abandon us while we are fighting in the trenches. At the moment, Michelle Malkin seems to be the only one.
#636909

On March 2nd, 2009 at 3:11 pm, Pasadena Phil said:

swede: I need to restate one of my statements in my last comment:

“He [Rush] fell into that trap last election and to this day, still insults people like me who voted “none of the above” when we voted for Bob Barr by saying that amounted to voting for Obama.”

I would also add that had those 6-7 million Republicans who stayed home also voted “none of the above”, Obama would have no basis for claiming a mandate.

The Dark Ages were dark for a very good reason. Reason had to bow to myth and superstition… just like today.
#636916

On March 2nd, 2009 at 3:19 pm, AmericanPatriot said:

I think this says it way better than I can

I just read this by my favorite copywriting coach.
#636924

On March 2nd, 2009 at 3:22 pm, sonofdy said:

I am number 100!!! waahooo!!!
#636930

On March 2nd, 2009 at 3:27 pm, happyscrapper said:

On March 2nd, 2009 at 3:22 pm, sonofdy said:
I am number 100!!! waahooo!!!

Oh, get over yourself! (kidding!!)
#637011

On March 2nd, 2009 at 4:10 pm, Salt said:

On March 2nd, 2009 at 3:22 pm, sonofdy said:
I am number 100!!! waahooo!!!

The rollover comment that is often missed is a sad place to be.
#637044

On March 2nd, 2009 at 4:29 pm, RabbidSquirrel said:

How do I change my name to ‘RS – one of the most influential blog posters in the entire political movement‘ ???

—————

Back on topic: How does one LOSE THIS MUCH MONEY????? Someone please give me 30 billion dollars and I will take down Google AND Microsoft AND IBM AND start my own automobile company that only builds cars for ME.

(I only ask one billion for my own mansion, F-22, Navy warship and Hooters franchise)
#637054

On March 2nd, 2009 at 4:35 pm, RabbidSquirrel said:

Published: March 2 2009 18:14 | Last updated: March 2 2009 18:14

Bank of America’s request for $20bn of government money to prop up its acquisition of Merrill Lynch was a “tactical mistake” that made the bank appear as weak as Citigroup, Ken Lewis, BofA’s chief executive told the Financial Times on Monday.

YA THINK?!?!?!?!?!?!?!??!!?

!@##$!@#$!@#$!@%@!$%#@$% We didnt even go to grad school OR to an Ivy League university and WE KNEW THAT

Where the @#$$%@#%@%#@%#@ have you been????

Here….. I’ll clue you in one better:

Bank of America’s request for $20bn of government money to prop up its acquisition of Merrill Lynch was a “STRATEGIC mistake”

(I seriously want someones bonus now… I think I just earned a 1/2 mil just from that little piece of consulting work)
#637079

On March 2nd, 2009 at 4:50 pm, ScottyDog said:

More Grand Theft by the Government!

Maybe we all should refuse to pay our taxes and see how the Governmet likes that…they cannot throw all of us jail but it sure would make the point that We the People have had enough.
#637436

On March 2nd, 2009 at 9:21 pm, happy2behere said:

#90 They say “breaking even is the new gain.” Sad.
#637443

On March 2nd, 2009 at 9:27 pm, robert537 said:

If you’ve ever wondered how silk purses were made from sows’ ears, a good lesson here:

http://www.nytimes.com/2009/02/28/business/28nocera.html?_r=1&em
#637657

On March 3rd, 2009 at 9:08 am, McCloud9 said:

Bank of America buys Merrill Lynch, Wells Fargo Buys Wachovia… And Paulson or Bernake wont tell the American people where the 700 Billion went? And AIG getting ANOTHER 30 Billion for a total of 152 BILLION!!!
I just heard on a newsbreak, the Whitehouse said “AIG is to Importand to collapse”… WHY? WHY? WHY?…
I have a theory (no I’m not a tinfoiler) AIG,Bank of America,Wells Fargo,Merrill Lynch and Wachovia are ALL Corporate Members of The Council on Foreign Relations. So, in a way all our Taxdollars are going to a PRIVATE Organization. Go to thier website and see who belongs to the CFR, its Damn scary.
#638324

On March 3rd, 2009 at 4:55 pm, ScottyDog said:

Most of companies are controlled by the Rockefellers. Rockefeller founded both the CFR and the Trilateral Commission.

Both orgainzations want to transform this country(destroy) by forming a One World Government.

Obama picked Trilateral Commission wonder boy Timothy Geithner to be Secretary of the Treasury. The rest of the team are protégés of Robert Rubin, also a Trilateral and former Treasury Secretary under Clinton.

Obama’s top foreign policy advisor has been Zbigniew Brzezinski, the co-founder of the Trilateral Commission with David Rockefeller.

Obama has packed his cabinet with either CFR members or Trilateral Commission members. I find this fact to be Treason since the members of these groups seek to overthrow the USA.

Dr. Robert A. Pastor, the principal visionary of the North American Union, stated in 2007,

“What I’m saying is that a crisis is an event which can force democratic governments to make difficult decisions like those that will be required to create a North American Community,” he said. “It’s not that I want another 9/11 crisis, but having a crisis would force decisions that otherwise might not get made.”

So, now we have the mother of all crises and on a global scale at that: Financial, political, religious (remember Islam?).

And socialistic solutions are being railroaded through on a daily basis.

If the New World Order baby is about to be delivered, wouldn’t you expect the fathers (Kissinger, Brzezinski, Scowcroft, Volker, Rockefeller, et al) to show up and pace the floor?

Everybody figures that these guys are just crusty and harmless old men, but I will guarantee that when the baby is finally born the screaming will begin.
Source:August Review