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Has the AIG CEO Robert Benmosche, just three months into the job, had enough? The Wall Street Journal scoops the field this morning with news from inside the AIG board room that Benmosche has informed the board "he is considering stepping down as chief executive of the government-controlled insurer." Benmosche dropped the bomb last week, saying he was "done." According to the Journal's sources, Benmosche "is chafing under constraints imposed by AIG's government overseers, particularly a recent compensation review by the Obama administration's pay czar, Kenneth Feinberg." He's not quite out the door yet, though. He agreed to think over...

Goldman wasn’t the only contributor to the systemic risk that nearly toppled the global financial markets, but it was the key contributor to the systemic risk posed by AIG’s near bankruptcy. When it came to the credit derivatives, American International Group, Inc. (AIG) was required to mark-to-market, Goldman was the 800-pound gorilla. Calls for billions of dollars in collateral pushed AIG to the edge of disaster. The entire financial system was imperiled, and Goldman Sachs would have been exposed to billions in devastating losses. A Goldman spokesman told me its involvement in AIG’s trades was only as an “intermediary,” but...

Second straight quarterly gain for insurer. merican International Group, the insurance giant whose near-collapse last year prompted a massive federal bailout, on Friday posted its second consecutive quarterly profit as some of its units continued to stabilize and improved financial markets boosted the company's bottom line. The New York-based insurer reported a third-quarter profit of $455 million, or 68 cents a share, compared with a $24.47 billion loss, or $181.02 a share, during the same period last year, according to a regulatory filing. For the second straight quarter, AIG elected not to hold an investor call to discuss its results....

Following on previous posts by Janet Tavakoli and Dylan Ratigan, which both reference the need to uncover how and why it is that AIG counterparties received such generous taxpayer funded bailout terms, it is critical to present the letter penned by California Congressman Darrell Issa to New York Fed President Bill Dudley, demanding much more information on the Fed's decision regarding AIG. Issa's quote that "behind closed doors and with no approval from Congress, the FRBNY may have added an additional $13 billion of debt on the backs of taxpayers. These allegations, if true, amount to nothing less than a...

A much clearer picture is developing of what went on during the middle of the financial crisis, when AIG was bailed out by the government and Goldman Sachs ended up receiving 100 cents on the dollar from AIG on various instruments. The clearer picture is the result of Janet Tavakoli's provocative article, Goldman’s Lies of Omission. In the article, she claims that GS CFO David Viniar lied when he said GS's exposure to AIG would be insignificant. A anonymous Goldman apologist who writes at Economics of Contempt responded to Tavakoli's article, calling the article part of a, "ridiculous conspiracy about...

When the historians finally finish sorting through the appalling decisions that have been made in the past two years, this one will probably be at the top of the heap. Last fall, as AIG began to realize how screwed it was, it started negotiating with the counterparties to all the credit default swaps it had written. One of the AIG's goals was to persuade these counterparties- These sorts of negotiations are exactly what should happen when a company gets in trouble. It goes to its creditors and says, look, we can't pay you everything, so here's your choice: Take something,...

http://www.bloomberg.com/apps/news?pid=20601109&sid=a7T5HaOgYHpE

It is by now well known that the banks on the other side of credit default swaps sold by AIG got paid out at par when the government bailed out the insurance giant. But what isn't as well known is that by deciding to pay AIG's counter-party in full, the Federal Reserve was reversing months of work AIG executives had done to convince the banks to take a haircut on their positions Bloomberg reports that the documents were similar to those drafted by AIG, except for one crucial detail. Part of a sentence in the document was crossed out. It...

Ex-A.I.G. Chief Is Back, Luring Talent From Rescued Firm By MARY WILLIAMS WALSH Maurice R. Greenberg, who built the American International Group into an insurance behemoth with an impenetrable maze of on- and offshore companies, is at it again. Even as he has been lambasting the government for its handling of A.I.G. after its near collapse, Mr. Greenberg has been quietly building up a family of insurance companies that could compete with A.I.G. To fill the ranks of his venture, C.V. Starr & Company, he has been hiring some people he once employed. Now, Mr. Greenberg may have received some...

Pay Czar Feinberg, Not Obama, Behind Decision to Slash Executive Pay White House pay czar Kenneth Feinberg did not seek President Obama's approval to order steep pay cuts from bailed-out executives. Thursday, October 22, 2009 White House pay czar Kenneth Feinberg was the driving force behind the move to order steep pay cuts from bailed-out executives, and did not even seek the president's approval before making his decision. The Treasury Department is expected to formally announce in the next few days a plan to slash annual salaries by about 90 percent from last year for the 25 highest-paid executives at...

NEW YORK – Get over it, America. Wall Street bankers make too much money. The latest example: Goldman Sachs says it has set aside $16.7 billion so far this year for compensation — or about $530,000 per employee. Not bad for a company that a year ago received $10 billion in federal money as well as $12.9 billion from the government's bailout of American International Group Inc. Maddening? Sure. But forcing Goldman or any other Wall Street firm to pay employees less won't help a single unemployed American find a job. It won't help a single homeowner who can't afford...

Per: Peter Barnes of Fox News!

The latest Quinnipiac Poll is out and it’s more bad news for Sen. Chris Dodd. Despite a public relations blitz that had him returning to Connecticut for what seems like the first time in years, and a statewide email and choreographed “shout out” from President Obama in the Rose Garden, (Rob Simmons) is still leading Dodd 45%-39%.

WASHINGTON - Mitt Romney had already sent out invitations for his Phoenix fund-raiser, offering supporters the chance to meet him in a Chase Field luxury box over a $300-per-person lunch or a $3,000 VIP reception. But when former rival John McCain called with an offer to be listed as host for the event in his hometown, Romney happily went back to the printer for a new invitation with McCain’s name emblazoned on it. Yesterday, McCain’s gesture helped Romney’s political action committee raise about $80,000. It also consummated an 18-month rapprochement between two competitors who battled for the 2008 GOP presidential...

The federal government’s $180 billion effort to prop up American International Group has worked, averting an even bigger financial catastrophe. Now it’s time for the Obama administration to oversee the dismantling of the failed insurance giant with all due speed. A report this week from the Government Accountability Office makes clear that AIG would crumble and likely reignite financial fears around the world without the government’s massive support. And the report says it’s “unclear” whether AIG will ever pay back the $121 billion in government assistance still coursing through its balance sheet. The GAO report should provide the administration with...

The financial system and economy are coming back to life. So who's going to pay TARP back and who isn't? As the first anniversary of the government's $700 billion Troubled Asset Relief Program approaches, Treasury Secretary Timothy Geithner has a lot to be happy about. Thursday, facing the congressional panel charged with overseeing the TARP funds, Geithner reminded them that when he took office, the Treasury had given $240 billion to banks. Since then, $70 billion has come back as the healthiest banks have begun to repay taxpayers. He estimates banks will repay another $50 billion over the next 12...

Regulators today won't define 'systemic risk,' unlike 25 years ago. With Congress back in session and the anniversary of the Lehman Brothers failure upon us, the Obama Administration is resuming its quest for greatly expanded authority to bail out American businesses. Under the Treasury reform blueprint, any financial company, whether a regulated bank or not, could be rescued or seized by the Federal Deposit Insurance Corporation if regulators believe it poses a systemic risk. If recent history is any guide, when the feds stage their next intervention, they will not define "systemic risk" and they will refuse to release the...

Korean Consortium Buys AIG Building for Bargain Price SEPTEMBER 11, 2009 08:03 Korean capital has advanced into Wall Street for the first time by purchasing a high-rise commercial building in the U.S. financial center. A consortium led by Kumho Investment Bank last week paid in full 150 million U.S. dollars to buy the AIG headquarters building after being selected as the preferred bidder. The consortium beat out 30 other consortia from 17 countries in June. The Kumho-led consortium held a housewarming party by inviting dignitaries the day when it received ownership rights to the skyscraper. Attending the event were Elizabeth...

Insurer AIG's shares slide on analyst downgrade1 hour, 35 minutes ago (AP:NEW YORK) The near-term sale of American International Group Inc.'s assets will leave little value for common equity holders, a Credit Suisse analyst said Tuesday, downgrading the troubled insurance giant and slashing his price target for the stock in half. Shares slid $3.58, or 8.9 percent, to $36.47 in late trading. Analyst Thomas Gallagher downgraded his AIG rating to "underperform" from "neutral" and wrote in a research note that the government's plan to be a bridge rather than a permanent stakeholder suggests meaningful asset sales or initial pubic offers...

Equities broke their winning streak on Friday and now they may be looking to start a new streak. All three major indices are down between one half and three quarters of a percent. That's not that bad. One major index in China was off by 6% this morning on price to earnings "fears". Stocks retreated from Shanghai to Frankfurt on speculation the six-month rally has outpaced prospects for earnings growth.

Wearing flip-flops, khaki shorts and a green polo shirt, the new chief executive of bailed-out insurer American International Group Inc says he's getting a lot of work done from his massive villa overlooking the Adriatic. "People criticize me for being on vacation. I actually started work a week before I was actually supposed to," Robert Benmosche told Reuters in an interview. "I do have conference calls every day, I have all my information sent here. I can work here as well as in the office in New York." Benmosche, 65, previously the CEO of MetLife Inc, the largest U.S. life...

Up 27% just this month. The company took a beating but look now at over 47.00/share. Someone is making money.

The bankruptcy of Colonial Bank (CNB) was the largest bank-bankruptcy in the U.S. since several large, U.S. financial institutions collapsed last year – with the most recent being Washington Mutual, last fall. However, there is one huge difference between the mega-bankruptcies of last year and the collapse of Colonial Bank a week ago. During the large bank-failures of 2008, the acquiring institutions wrote-down the “assets” on the books of these banks by an average of 18% - according to a Bloomberg article. However, when BB&T Corp purchased Colonial, it immediately wrote-down Colonial's assets by 37%, double the amount of discounting...

Should the Fed Get Into the CDS Business? Exotic financial instruments known as credit default swaps played a central role in the crisis that brought the U.S. economy to its knees last year. Ricardo Caballero and Pablo Kurlat, two M.I.T. economists, have an audacious response: The Federal Reserve itself should get into the credit default swap business to prevent the next crisis. Their proposal will be debated today at the Fed’s annual Jackson Hole, Wyo., symposium by the world’s leading central bankers and economists. Harvard’s Kenneth Rogoff, former chief International Monetary Fund economist, will present a critique. A credit default...

In the late 1970s, as the federal government arranged to bail out Chrysler, not-yet-famous economist Alan Greenspan warned the problem “was not that it would fail, but that it would succeed.” And it did, thus paving the way for more bailouts, including (again) Chrysler. But the first Chrysler bailout was just one company, one time. The rolling series of financial bailouts over the past year -- Fannie Mae and Freddie Mac, AIG and Citibank, General Motors and Chrysler, etc. -- have not yet succeeded or failed. But they’ve raised a new moral hazard. These days, having invested so much in...

Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has uncovered documents from the Treasury Department related to the government's bailout of insurance giant American International Group (AIG). The documents, obtained through the Freedom of Information Act, include internal Treasury Department emails and a series of outlines, presentation slides and articles outlining the details of the government's "investment" in AIG, which at the time totaled as much $152 billion. Following are highlights from the documents: A series of presentation slides detailing the terms of the AIG bailout. Included among the items is a...

<p>American International Group said Friday that it's spending $1.1 billion in bonuses to retain key staff members to help the troubled insurer wind down businesses and keep other parts of the company competitive.</p> <p>AIG said it has already incurred $824 million of expenses from a retention plan that was set up in 2008 and runs through 2011. Another $249 million will be spent during the second half of 2009, the insurer estimated in a regulatory filing.</p>

Public Discourse: The candidate who told his supporters "to argue with them and get in their face" now finds the shoe on the other foot. So they're taking names and encouraging you to turn in your neighbors.So this is hope and change — telling American citizens who in a democracy disagree with you that they are mind-numbed robots participating in mob action and expressing "manufactured" outrage. Considering that upward of 80% of those hooligans like their doctors, like their insurance and like their care, anger over your government-run health care was not that hard to assemble. It was not that...

Gee, was this just a "simple" short squeeze, or was AIG's surprise profit announcement this morning leaked? Hmmmm..... Not that it would be anything new, of course. We know from past experience that only rumors (or leaked facts!) that make stocks go down are ever investigated by the SEC, and then only when the persons doing the leaking (or rumoring) are not big broker/dealers and their crony hedge funds. This sort of nonsense is nothing new; it is in fact as old as the stock market. But the blatant level of inside baseball during this crisis (and now the rally)...

Wall Street banks and lawyers could collect nearly $1 billion in fees from the Federal Reserve Bank of New York and American International Group Inc. to help manage and break apart the insurer, according to a Wall Street Journal analysis. That would represent one of Wall Street's biggest paydays -- four times the fees paid to break up AT&T Corp. in 1996, and nearly double those paid for Visa USA's 2008 initial public offering, the largest U.S. IPO ever. The federal government's bailout of AIG has left it with a nearly 80% ownership stake. Wall Street banks and lawyers could...

Remember the fairy tale about AIG being an otherwise healthy insurance company that just got a little crazy selling credit default swaps? Well, it's time to put that one to rest. The New York Times has reviewed state regulatory filings and discovered that "AIG's individual insurance companies have been doing an unusual volume of business with each other for many years — investing in each other’s stocks; borrowing from each other’s investment portfolios; and guaranteeing each other’s insurance policies, even when they have lacked the means to make good. Insurance examiners working for the states have occasionally flagged these activities,...

Corruption: Chris Dodd's teetering re-election chances weren't helped by news that the senator may have lied about not knowing he got preferential treatment as one of Countrywide Financial's Friends of Angelo program.Can you foreclose on a house of cards? Dodd, D-Conn., may soon find out after the official who handled his mortgages testified before both the House Government Reform and Oversight Committee and the Senate Ethics Committee that Dodd did in fact know he got sweetheart deals from a company that went on to lose billions of dollars on home loans to credit-strapped borrowers. As the No. 1 recipient of...

see link in post below

No wonder The Fed was threatening Congress when asked about audits - it might expose the underlying realities of something like this: European banks including Societe Generale SA and BNP Paribas SA hold almost $200 billion in guarantees sold by New York-based AIG allowing the lenders to reduce the capital required for loss reserves. The firms may keep the contracts to hedge against declining assets rather than canceling them as AIG said it expects the banks to do, according to David Havens, managing director at investment bank Hexagon Securities LLC. $200 billion dollars for foreign banks that we, the taxpayer,...

Remember the AIG firestorm? The company's Financial Products division, based in Weston, Conn., was to blame for the business practices that sent the company south. The feds stepped in with a $180 billion bailout. And then we figured out that the company had to give out $450 million in bonus payments to those same employees who may have caused the mess? Now, hoping to stem any further public outrage, the company is asking the Obama administration (basically, its financial consigliere) for permission to go ahead and make those bonus payments. The retention incentives, as the company puts it, are an...

American International Group is preparing to pay next week millions of dollars more in bonuses to dozens of corporate executives, a source familiar with the development said. AIG [AIG 9.48 --- UNCH (0) ] has been talking with Washington's newly-appointed compensation czar Kenneth Feinberg about the bonuses, which are due to be paid on July 15, said the source. The company is reviewing its compensation plans with Washington as it tries to avoid the national furor set off by $165 million in retention bonuses paid to employees of a financial products unit in March. Much of AIG's $99 billion in...

American International Group is preparing to pay millions of dollars more in bonuses to several dozen top corporate executives after an earlier round of payments four months ago set off a national furor. The troubled insurance giant has been pressing the federal government to bless the payments in hopes of shielding itself from renewed public outrage. The request puts the administration's new compensation czar on the spot by seeking his opinion about bonuses that were promised long before he took his post. AIG doesn't actually need the permission of Kenneth R. Feinberg, who President Obama appointed last month to oversee...

American International Group Inc (AIG.N), the insurer rescued by a series of federal bailouts, may have zero equity value due to the risk of more credit default swap losses and the disposal of key assets at low valuations, Citigroup said. Shares of the company fell 22 percent to $10.22 in early trade Thursday on the New York Stock Exchange. The shares have lost more than 90 percent of their value in the last year. Potential markdowns in AIG Financial Product unit's regulatory CDS portfolio may result in collateral calls that would again put pressure on AIG's liquidity, "Such collateral calls...

When Wall Street imploded last year, the Fed and Treasury took "some of the right moves" in order to revive the financial system, says William Cohan, author of House of Cards. But the government blew at least one crucial act of the saga, Cohan says: The backdoor bailout of AIG’s counterparties, notably Goldman Sachs, which received $13 billion of TARP funds via the AIG conduit last fall. Adding insult to taxpayer injury, Goldman Sachs is primed to benefit should AIG ultimately file for bankruptcy and default on its debt, Cohan reports, having invested about $200 million in related credit default...

See what happens when Congress refuses to enforce The Federal Reserve Act's provisions that require that equity ownership be taken only in instruments that have the full faith and credit of the US Government behind them? Under the agreement, AIG will split off AIA and Alico into separate company-owned entities called "special purpose vehicles," or SPVs. The New York Fed will receive preferred shares now valued at $25 billion -- $16 billion in AIA and $9 billion in Alico -- and in exchange will forgive an equal amount of AIG debt. So now The Federal Reserve (actually the NY Fed)...

Quietly and almost unnoticed by most Americans, the US Federal Government introduced a fourth branch to its political structure in 2006. As you know we already had three branches; they are: § The Judicial: the Supreme Court § The Executive: the President § The Legislative: Congress This pretty much has us covered in terms of political strategy… but what about financial issues? Everyone knows Congress has no clue how to allocate capital. And the Executive Branch doesn’t exactly have a great track record when it comes to financial matters either (we’ve run a deficit virtually every year since 1970). Shouldn’t...

As I reported earlier, back in March I noted that DC Metro train money was frozen by some banks caught up in the AIG crisis. This frozen money likely caused slowdowns in some maintenance...

Obama and IG Gate: It is 1972 all over again, only this time it isn’t Nixon coordinating the cover up, it is President B. Hussein Obama and possibly Michelle too (echoes of Hillary Clinton and Travelgate). There is a stifling of transparency by the White House, with no pretense whatsoever, Obama simply lies one more time. And, too ensure that no one dares question what he does, any Inspector General (IG) who challenges he or Biden (Joe and his incestuous relationship with Amtrak are in on this too) is either forced to resign, fired, or has their contract non-renewed. Kind...

Well, kind of. Goldman Sachs (GS) Group Inc. and Societe Generale SA extracted about $11.4 billion from American International Group Inc. before the insurer’s collapse as the firms demanded to hold cash against losses on mortgage-linked securities, according to regulatory filings. Goldman Sachs got $5.9 billion and Societe Generale received $5.5 billion of about $18.5 billion in collateral paid by AIG in the 15 months before the September bailout. The payments helped settle AIG’s obligations on $62.1 billion of credit-default swaps that the Federal Reserve later removed from the New York-based insurer as part of the rescue. Officials at AIG,...

Goldman to make record bonus payout Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms. A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm. Staff in London were briefed last week on the banking and securities company's prospects and told they could look forward to...

Obama Demands Sweeping New Powers By Matthew Vadum Tuesday, June 16, 2009 President Obama is demanding dangerous, sweeping new powers to seize financial services companies. According to the Los Angeles Times, the proposal expected to be unveiled Wednesday will be “the most significant new regulation of the financial industry since the Great Depression, including a new watchdog agency to look out for consumers’ interests.” The plan would give the government "new powers to seize key companies—such as insurance giant American International Group Inc.—whose failure jeopardizes the financial system." The news report notes that “[c]urrently, the government’s authority to seize companies...

The former top executive of American International Group Inc. plundered an AIG retirement program of billions of dollars because he was angry at being forced out of the company, a lawyer for AIG told jurors Monday at the start of a civil trial.

AIG lawyer: Ex-top exec plundered retirement plan By MADLEN READ The Associated Press Monday, June 15, 2009; 9:35 PM NEW YORK -- The former top executive of American International Group Inc. plundered an AIG retirement program of billions of dollars because he was angry at being forced out of the company, a lawyer for AIG told jurors Monday at the start of a civil trial. Attorney Theodore Wells told the jury in Manhattan that former AIG Chief Executive Officer Maurice "Hank" Greenberg improperly took $4.3 billion in stock from the company in 2005, after he was ousted by the company...

*snip*A.I.G. agents have told her that for therapy she should use her own health insurance, but it has a $3,000 deductible for mental health care. "Why should we be paying out of pocket?" she said. "That's why they're there. They're the insurer."

SKorean-led consortium to buy AIG headquarters AFP - Thursday, June 11 SEOUL (AFP) - - A South Korean-led consortium said Thursday it has reached a deal to buy the New York headquarters of troubled US insurance giant AIG, the first major purchase by a Korean firm of a Wall Street property. American International Group has agreed to sell its 66-storey headquarters and an adjacent building to the consortium led by Kumho Investment Bank, Kumho said in a statement. Kumho said it signed a contract and made a down-payment on June 2 and the remainder of the purchase price would soon...