Posted on 09/16/2008 3:50:40 AM PDT by TigerLikesRooster
THE OTHER SHOE
By MARK DeCAMBRE
September 16, 2008 --
Insurance giant American International got whacked with downgrades from all three major ratings companies last night even as it huddled in intense negotiations with state and federal regulators trying to raise tens of billions of dollars in capital.
Standard & Poor's, Moody's and Fitch leveled downgrades on AIG - an event that could mean the ailing insurer must raise at least $12 billion in additional capital to appease skittish companies known as counterparties that do trades with the insurer.
S&P downgraded the insurer's long- and short-term rating to A- from AA- noting that it is undercapitalized due, in part, to its deteriorating balance sheet.
The downgrade could trigger a failure for the world's largest insurer that some speculate would make Lehman's downfall look puny in comparison, sources said.
On a day when Wall Street was rocked to its core following the bankruptcy of Lehman Brothers and the quickie marriage of Merrill Lynch and Bank of America, AIG feverishly tried to buy itself more time from the downgrade by negotiating with banks to provide the insurer a whopping $75 billion loan from JPMorgan Chase and Goldman Sachs.
(Excerpt) Read more at nypost.com ...
Ping!
Ok, 75 billion. But will this really do it? If they get the money will this solve the problem and allow the economy to resume growth? No more surprises?
I just want to be sure before I write the check.
Well, it's a good thing they are not "officially" bankrupt or else could get an A minus /sarc
Is it just me or does anyone else find this absurd thay they still have an "A" rating? Sounds like C,D, or F are more in line here.
” a whopping $75 billion loan from JPMorgan Chase and Goldman Sachs. “
The FED refused to loan AIG the money, so JPM and GS will pony up — any bets as to where *they* are gonna get the money??
(Hint — mentioned almost in passing yesterday that the FED is now taking securities as collateral for loans...)
If you make it out to ovrtaxt, everything will be fine.
Trust me.
I guess that AIG is just gonna hafta get one of them sub-prime loans.
It’s scary how many people have life insurance policies underwritten by AIG, these policy holders could lose all their cash value and the after death benefits will vanish.
Based on what I’ve heard lately, I’d say that it sounds like all these ratings are pulled out of the air.
All those fancy Ivy League edumications, yet all they needed to know about the situation they've gotten themselves into, they could have learned from a four-hour hang-gliding class. Don't fly higher than you are willing to fall.
Hee hee hee.
LLS
You may have wanted to elaborate on that hint by adding the statement that this is a really, really, bad idea.
Yesterday it was only 40 billion. Today its 75 billion. How do they ever expect to pay back 75 billion dollars? They are going down, I’m afraid.
“How do they ever expect to pay back 75 billion dollars?”
A series of bake sales.
Send me your bank account and routing numbers, and I’ll wire you the money to cover the check to overtaxt.
From Lagos,
"They are not insured by the FDIC, but at least $100k per person is insured through your State's National Organization of Life and Health Insurance Guaranty Association."
"Some states insure higher amounts, like NY at $500k."
sw
There was a good article on the WSJ yesterday. Said they have assets to cover their insurance accounts, as required, but they aren’t allowed to touch those.
I'd go further than that and give them a frowney face with a circle around it.:(
I guess AIG won’t be able to donate as much money now to the DNC, Obama and other democrats running for office like they usually do every year....how sad. /sarcasm
John and Terreza Heinz Kerry use to have alot of stock in AIG...wonder if they ‘bailed’ out in time?
let’s see........2 years ago AIG doubled my insurance rates, so i called my agent and said to dump them and find another insurer. My agent told me that they had doubled everyone’s rates, and everyone of his customers had dropped them...this year they lowered their rates to the cheapest they have ever been...did someone get greedy, try to pull a comcast and lost?
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