AIG reportedly near deal on new government bailout

NEW YORK — American International Group Inc. late Sunday was reportedly near a deal for a revised bailout package from the U.S. government that would make borrowing terms easier for the troubled insurer.

A proposed $123 billion bailout package would be replaced with a new $150 billion package, according to the Wall Street Journal.

Details of the arrangement could be announced as early as Monday, when AIG is scheduled to report its third-quarter results, the Journal said. The plan reportedly would replace an $85 billion two-year loan with a $60 billion five-year loan at a lower interest rate.

The government also reportedly would inject $40 billion into AIG in exchange for preferred stock.

AIG representatives were not immediately available for comment.

The government had earmarked $85 billion in September for AIG's rescue. Another $37.8 billion was made available in October.

Comments

[HealthcareAdvocate]

Want to become catatonic?

Read these links:

http://www.google.com/search?sourceid=navclient&ie=UTF-8&rlz=1T4RNWN_enUS215US215&q=AIG+fraud

[GhostNyc]

True or false-

did AIG pay out bonuses to upper management this year?
Has AIG complied with gov't oversight, controlling management of funds?

If not- NO NEW DEAL.

[meede]

There must have been a page inserted on front of the bailout after the draft made available to public to read. Page inserted reads Bailout Agreement between United States of America and AIG.

The longer this goes on -- whole thing appears to have been created for AIG. All the little daily press appearances by Bush and not one time has he made an effort to deal with homeowners. Wall Street/Banks have manipulated the market by holding funds back not allowing loans.

The administration could have been working on changing the bankruptcy law to allow for people to re-negotiate their loan on their primary residence only, protecting taxpayers from being scammed by what I will call 'house flippers' who got caught with numerous mortgages. If they wanted to play, that's their problem, not my responsibility to dig them out. Unfortunately many renters got caught in the cross-fire in that owners of properties were not paying their mortgages but collecting the rent from the people and were totally unaware as the financial institutions did not investigate prior to issuing foreclosure documents. These institutions should be legally responsible and criminally charged for this failure.

Should be a law to check Bush, Cheney, et al and family's accounts including the blind trusts, to see how much this lined their pockets together with Paulson et al as I said from day one there was a conflict of interest of Paulson & Goldman Sachs which I feel is still applicable.

[bbridges1962]

Why don't we have some/any representation on these matters?? What are supposed to do...just watch??

[LeRoyHolt]

Why are we capitalizing these companies without the reinstitution of the regulations that would have prevented this financial nightmare?

At the rate they are giving.... $250,000 per taxpayer would have served the country better.... the mortgage crisis solved... no credit debt problems ... automakers solvent thru the market place.... retailers, large and small, healthy from the bottom up......

[prscnt1]

I like the plan to give out $250K per person. I would also put price freeze on everything (Nixon did that!)

The best way we would make the whole country republican, in a flash!

[devinsbuddy]

When do we get the pitchforks and march on the castle? I'm curious how much of these bailouts goes to line the pockets of the Bush administration and their cronies?

[bbbbmer]

I sure as heck hope Congress is going to prosecute CEO John Fuld for malfeasance, especially after once receiving the first bailout agreement, AIG held that opulent group hug at the Four Seasons resort costing upwards of $500,000... I also hope compensation for senior executives is managed more effectively than when Fuld was head... So much for Harvard Business alums, and corporations being managed better than government agencies...

[Rural Juror]

Who the h3ll are you talking about? John Fuld is not an AIG CEO.

[PT6]

If we do not address the HOMEOWNER Walk-Aways this will happen OVER and OVER and OVER and OVER and OVER and OVER!

Why is Paulson dragging his feet?

[Fight4Freedom2008]

Watch how Paulson treats G. Sachs...?

[thebluecrayon]

So they get more money but the auto industry shouldn't get a bailout? This is getting ridiculous.

[Carolab]

More "Shock Doctrine". Naomi Klein can help you understand it and what to do about it (great interview just before the election):

http://www.phillyimc.org/en/node/76964

[Carolab]

Excerpt:

"We need to stay focused. And, you know, I believe that that sort of confidence in this moment opens up tremendous possibilities. You know, if you can bail out AIG, an insurance company, which has now received more than a hundred billion dollars, right? That could get healthcare to every child in the country. And it’s time to seize this moment. Because, if we don’t seize this moment to make those types of arguments about what’s possible, right, and understand the stakes of actually negotiating a good deal with these banks, right? I mean, I think the banks should be allowed to go bankrupt and they should be taken over by the state on the most favorable terms possible.

And then they become the revenue generation stream rather than a sap on public resources that prevent us from meeting the climate crisis, for meeting healthcare crisis, and all of the other challenges before us. Abandon the original plan completely. This is just, you know, at this point, this is just pride and cronyism that it’s still alive. There, there have…Every economist, every, even the conservative Wall Street Journal and FT Editorial Page has said that the equity plan is a far better plan than the toxic debt. Now why are they spending hundreds of billions of dollars buying these toxic debts still? They should abandon that plan along with the crony contracts that they’re handing out to administer the plan. "

[HealthcareAdvocate]

This is wonderful news!

Before the Paulson forks over the cash ... perhaps the media and Congress will Google 'AIG Fraud' ... and ... change course:
http://www.google.com/search?sourceid=navclient&ie=UTF-8&rlz=1T4RNWN_enUS215US215&q=AIG+fraud

[23000Days]

There simply is no way to save the imaginary wealth created by derivatives and CDSs that AIG and the banks have created and are now trying desperately to hold onto. The figure being bandied about is 65 trillion globally, but Dennis Kucinich says the total value of the deal is much higher, around 455 trillion.
That said, even if we could or would produce that size bailout, it would only bring us back up to yesterday. What about today and tomorrow? These people are too entrenced in perpetuating this sham, and they will continue.

It would be far better to let their chips fall where they may, then reorganize from the ground up, using the bottom up strategy.

[rbarry647]

If it is too big to fail, can't the pieces be broken up and sold off - the Property Casualty side is still profitable

[bmxking28]

They are trying to sell off the P&C portion of the business, problem is that nobody wants or needs the structures or employees that come with it and the policys that are written are all stored on a disasterously outdated program that still runs on DOS. So the purchasing company would have to spend a fortune to update all the policy information to work on any new program.

I know all this is fact, I work for AIG P&C division. Even though I would lose my job I say let them fail, their own mismanagement of funds and extravagence should be their down fall. As employees could see back in march and april that the company was moving money around ENRON style.

[HamletsMill]

WOW! Could you tell me what that DOS program is using for a database? Are you telling be AIG is running on Clipper and dBase III ? It was a great system for it's time, but I am a little shocked if they are carrying 2008 CDO and CDS obligations in 1986-1992 technology? The Indian guys I have worked with at times have been amazed at what I can do in DOS Commands to manipulate a file system at a DOS prompt. Is AIG P&C hiring?

[Fight4Freedom2008]

Thank you for your courage and honesty. I'll let ya cut in front of me in the soup line :-P

[SELIZABETH1forAIG]

bmxking28,

I am also an AIG employee on the P&C side and believe you are misinformed. As respects your analysis of the company's failed attempts to sell the P&C arm, to the contrary, Ed Liddy announced awhile ago that the intent is to, and I quote, "focus on its global property and casualty insurance businesses...” Why sell the profit center? And do you really believe that a system or program issue would turn away potential buyers?

Regarding employees, do you think firing everyone would lead to the success or failure of a company? I 've personally observed much smaller deals go down and almost 100% of the workforce stayed intact - it's the smart thing to do. If you are so willing to sit back and watch AIG fail irrespective of your employment, then why not quit now? Your type of attitudes is what leads to the low profitability and downfall of companies worldwide.

Having experienced the broker side of the business, I can personally attest to having participated in a number of events sponsored by insurance companies, some of which cost well into the millions - none were AIG sponsored.

To those who think AIG should simply be allowed to fail, in October Lexington Insurance Company, a member of AIGCI, had already advanced $130M in claim payments on nearly 2,300 claims for customers devastated by Hurricanes Ike and Gustav. So while you may not care about we employees, what about the other casualties?

[vincefango]

So...what is the real loss? Put this company under for good vs. the loss of jobs. If we don't socialize healthcare soon...I think I'm gonna be sick because I can't take another story about how taxpayers are bailing out every big corp in the US.