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Author Topic: Government Announces $85 Billion Bailout of AIG  (Read 1133 times)

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Offline Wretched Excess

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Government Announces $85 Billion Bailout of AIG
« on: September 16, 2008, 08:28:33 PM »
jeez.  mccain couldn't have had the rug pulled out from under him quite as abruptly as this. 

Quote
Fed takes over AIG - $85B loan
Federal officials will take 80% stake in the nation's largest insurer in an $85 billion rescue plan to prevent financial chaos worldwide.

NEW YORK (CNNMoney.com) -- In a stunning turn, the Federal Reserve Board is taking over crumbling insurer American International Group in an $85 billion rescue plan, officials announced Tuesday evening.

The Fed authorized the Federal Reserve Bank of New York to lend AIG (AIG, Fortune 500) up to $85 billion. In return, the federal government will receive a 79.9% stake in the company.

Officials decided they must act lest the nation's largest insurer file bankruptcy. Such a move would roil world markets since AIG (AIG, Fortune 500) has $1.1 trillion in assets and 74 million clients in 130 countries.

"The Board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance," the Fed said in a statement.

A bailout of AIG would mark the most dramatic turn yet in an expanding crisis that started more than a year ago in the mortgage meltdown. The resulting credit crunch is now toppling not only mainstay Wall Street players, but others in the wider financial industry .

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« Last Edit: September 16, 2008, 08:33:34 PM by Wretched Excess »
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Offline Flame

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Re: Government Announces $85 Billion Bailout of AIG
« Reply #1 on: September 16, 2008, 08:37:33 PM »
Holy Crap.
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Offline Chris

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Re: Government Announces $85 Billion Bailout of AIG
« Reply #2 on: September 16, 2008, 08:41:22 PM »
Bear-Stearns, Fannie/Freddie, $85 billion for AIG, another $50 billion "stimulus" package.  When does it end?   :banghead:
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Offline Zeus

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Re: Government Announces $85 Billion Bailout of AIG
« Reply #3 on: September 16, 2008, 08:41:48 PM »
Hell of a deal for the Fed. They Loan AIG 85 Billion and get a 80% stake in a trillion plus asset. wonder what the terms on the 85 billion are.
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Offline Baruch Menachem

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Re: Government Announces $85 Billion Bailout of AIG
« Reply #4 on: September 17, 2008, 07:50:05 AM »
It's Tulip time in Wall street.

You can check my bank's stock price during the day on the intranet, and I have been watching it since the weekend on  an hourly basis.   I guess I like train wrecks.   Anyway, we were down 11% on monday, and up 9% yesterday.

Our management has sent memos on a regular basis that our bank has limited exposure to all this, as our bank had avoided the derivatives that caused most of the problem.

Of course, we did take a small hit on Monday because the bank had a small stake (for a bank) in Lehman Bros and Merrill Lynch.

I think the real reason the rescued AIG is because it is so big in Workers comp.  The last thing the Bush people wanted was the media going on about disabled workers not getting their checks right now.
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Offline Hawkgirl

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Re: Government Announces $85 Billion Bailout of AIG
« Reply #5 on: September 17, 2008, 06:31:46 PM »
If we're in a financial mess now...can you imagine an incompetent Barack Obama making it better..NO.
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