Posted on 09/12/2008 11:02:09 PM PDT by TigerLikesRooster
AIG shares slump, says 'everything on the table'
Insurer may sell Transatlantic stake, other businesses to raise capital
By Alistair Barr & John Spence, MarketWatch
Last update: 5:42 p.m. EDT Sept. 12, 2008
SAN FRANCISCO (MarketWatch) -- Insurance giant American International Group, beset by a record stock slump and a possible cut from ratings agency Standard & Poor's, said Friday it was reviewing its businesses and that "everything was on the table," suggesting it might sell assets to raise capital and avoid a crippling downgrade.
The company had been preparing for a major reorganization announcement on Sept. 25, but on Friday the Wall Street Journal reported on its Web site that the company may hold a conference call for analysts on Monday during which it could announce asset sales.
AIG shares slumped a record 31% Friday on concern the world's largest insurer may be downgraded by ratings agencies, triggering billions of dollars in new capital needs.
Standard & Poor's put AIG's ratings on CreditWatch with negative implications, suggesting the agency may downgrade the insurer in the future.
"Additional market value losses will place some strain on the company's resources," Standard & Poor's credit analyst Rodney Clark said in a statement. "AIG's potential access to the capital market may be more restricted in the short term."
AIG stock lost 31% to close at $12.14. More than 300 million shares traded, another record, according to FactSet Research. The shares lost another 5.6% to $11.46 in after-hours action.
(Excerpt) Read more at marketwatch.com ...
They ain’t making any more land! Real estate is the best investment you can make. The price of real estate has never gone down!
They ain’t making any more land! Real estate is the best investment you can make. The price of real estate has never gone down!
They ain’t making any more land! Real estate is the best investment you can make. The price of real estate has never gone down!
Given everything that has transpired since then, to call the debt-mongers on FR ignorant would be a compliment.
It's hard to pin down the prices on the components that total out house prices. Building materials and methods the last 20 years have become very productive by twice, at least.
On the other hand, modest and useful size houses and lots have been made illegal due to snob, environmental and self dealing zoning. Featherbedding on electrical, plumbing, septic, storm windows, architects and lawyers have all, IMHO, doubled the cost of housing.
Half of the mortgage problem was from outside the US. That is where can you, if you are a foreigner, park tens of billions, instantly, with a good chance of getting repaid and at a good rate. In a way, we were dumbed imported cash. Maybe nanny Congress should of made investing in the US illegal and saved ourselves from ourselves.
No, the mortgage problem was a direct result of liar or Option ARM loans made to people who have no chance of paying them back, good OR bad credit score notwithstanding.
This began with unsustainable housing prices due to easy credit, and it will end with housing bottoming, my guess being that will be in 3-4 years when the majority of mortgage underwriting will return to the historically feasible norm of 20% down, 36% DTI backend ratio, no down payment assistance.
If credit card companies make money sending high school kids cards, backed up only by their signature, I see know reason that home mortgages backed up by only signature can not work at the proper rate.
Anyways, just as there are new car sign and drive deals, so too will there be homes. Only the government needs to get out of the way. If one adult wants to give money to another adult with a signature, fine by me. We wouldn't have any of this if it wasn't for government tying us all together.
PS.
If we had a good free market in housing, housing would lose value every year, just like all cars. How do you think conservatives would like that? They wouldn't. They would run to the government to intervene to prop up house prices.
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