AIG's Bailout Total Rises To $144 Billion

New York Times:

The company said it would be able to borrow up to $20.9 billion under the new program, raising its maximum available credit from the Fed to $144 billion under three different programs. The credit includes an earlier emergency loan of $85 billion from the Fed that carries a much higher interest rate.

A.I.G.'s big borrowings underscore the company's bewilderingly rapid decline. When it suddenly faced a cash crisis in mid-September, the original estimate of the amount it needed was just $20 billion. A few days later, the Fed stepped forward with its $85 billion credit line. And now, the stunning size of that original bailout has grown by almost 70 percent.

A.I.G.'s cash needs could grow even further. Much of the cash it needs is being used to meet collateral calls from its derivatives counterparties, and the precise collateral triggers and amounts are not public information. In general, the derivative contracts cost A.I.G. more as the real estate markets decline. The company's financial products division did a lot of business in that type of derivative, called credit-default swaps.

Read the whole story: New York Times

Comments

[Maschine]

To late, no one cares anymore...for some reason the US is the darling of the investment world. Imagine, people want to buy worthless yankee dollars more than gold to hedge.

Relax, open up your wallets, let the kids know that their kids will be paying and life will go on.

[montemalone]

Gosh, that's only about $472 for each man, woman, and child in the good ole USofA.
I'm sure we can all afford to give up $472 to make sure that the dipsticks that ran their company into the ground get to keep up the good work!

[jbach]

I thought golden parachute packages were not to be awarded to employees of AIG, but I hear that some who have retired early are getting just that.

[iPolitics]

Bush Makes A Last Push To Deregulate

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/30/AR2008103004749.html?hpid=topnews

[MakeAWish]

Why are we putting money on this horse with broken legs to make it to the finish line?

[nogimmicks]

Giving these huge amounts of money to the banks on top of what they have made over the last 10 years is a crime of gargantuan magnitude. The money must to be TAKEN from the execs and owners that cashed in before. Also, clearly the private FED with their license to print dollars, reduce its value, and solicit unprecedented transfers of the taxpayers money to the bankers, must be abolished as soon as possible.

[ErnestineBass]

There is nothing "bewildering" about AIG's decline.

They rashly bet on a doped-up horse called Wall Street and they lost.

End of story.

[darthdarcy]

Remember this $144 billion to AIG is to cover Gambling Debts, when it comes down to it, nothing other than gambling debts, from which they required immunity from not only The SEC, but also The Gaming Commission to run up this high..!

[blood1]

Just business as usual for how the GOP Gov't likes to manipulate the people...follow me here:

1. We the American People were forced to purchase an 80% stock in AIG. at a cost of $85Billion..and they would repay us with 10% interest.
2. So we feel a little better.
3. AIG want's more money (and who doesn't) as the Gov't put $700billion out for stealing at a 5% interest rate....
4. So they ask and receive more money at a lower interest rate...which dilutes the price of our stock.
5. And now, they can pay us back with some of the original money(10%) with cheaper money (5%)...and it will be put in the NEWS that we are getting our money back.
6. Opps, we are getting OUR MONEY back from the additional money of ours borrowed at a cheaper interest rate.
7. So the American People are getting a good return on investment????
8. This is the biggest "Smoke and Mirror" job I have seen recently....but stay tuned...I am sure we will get to see this again.

Here in lies the reason to vote GOP....and maybe we will all get some Vasoline with their next "economic stimulus package".

[mrblubitz]

Only if the vaseline has sand in it for "traction"

[worldtraveller]

Not one penny will be paid back. AIG is finished!

Keep digging a hole for every American.

[KCFreedom]

I'm sure they'll need another bailout.

Does anyone else hear a giant sucking sound?

[WIpatriot]

What? I can't hear you over the roar.