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AIG sells Asian unit in bid to pay back bailout

March 1st, 2010 . by TexasFred

AIG sells Asian unit in bid to pay back bailout

LONDON - British insurer Prudential PLC said Monday it will buy the Asian unit of bailed out American International Group Inc. in a deal worth $35.5 billion that will allow AIG to pay back some of the money it owes U.S. taxpayers.

AIG, which was kept alive by a $182.5 billion rescue by the U.S. government in September 2008, will get $25 billion in cash — $20 billion of that from a Prudential rights issue — and $10.5 billion in new shares and securities for the sale of AIA Group Ltd.

The combined group will be the leading life insurer in Hong Kong, Singapore, Malaysia, Indonesia, Vietnam, Thailand and the Philippines, as well as the biggest foreign life insurer in China and India, Prudential said.

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AIG sells Asian unit in bid to pay back bailout

Paying back some is good, paying back ALL is a lot better. But ALL will NEVER happen. AIG is a losing proposition. I don’t care how you look at it, AIG is bankrupting the American economy.

Don’t take me wrong, $35 Billion is a lot of money, but it’s only a stop-gap in the grand scheme of things. AIG is still bleeding money.

AIG, which is now 80 percent owned by the U.S. government, said Friday it lost $8.87 billion in the fourth quarter as its general insurance business remained weak.

As of Dec. 31, AIG’s outstanding assistance from the U.S. government totaled $129.26 billion, up 5.7 percent from the end of the third quarter due to accrued interest.

That total includes $94.76 billion in loans and interest, and $34.5 billion tied to the value of investments the government bought from AIG. As those investments pay off or rise in value, the government recoups more money.

No matter how you look at it, AIG is killing the American economy. When Obama and Company decided that AIG was ‘too big to fail’ they bought AIG, and all the accrued debt OF AIG.

These other companies buying AIG, part and/or parcel, that’s a good thing, right?

If these companies assume the debt of AIG, how do you suppose they are going to pay that debt off? Do you think they may pass the costs along to their customers with higher rates, higher costs of doing business with their particular company?

That’s how business works, if MY costs go up, I pass those increases off to MY customers with an increase in the price of MY goods and/or services.

Last month, MetLife Inc. confirmed that it is in talks with AIG to buy one of AIG’s insurance units. Media reports price the deal at as much as $15 billion. The two companies have been in discussions for months about a potential deal for AIG’s American Life Insurance Co., known as Alico.

Here’s the deal, if you are insured by MetLife, you’re going to pay a lot more money to watch Ol’ Snoopy fly along in the MetLife blimp!

Prudential estimated pretax savings of $340 million per year within three years.

To recoup their $35 BILLION investment in AIG, at this rate, Prudential should break even, if their three year estimate is correct, in something like, what? 300 years maybe?

Long term investment is one thing, but that’s a bit of a stretch in MY opinion.

AIG is, according to the financial whiz kids in the Obama administration, just too big to let fail. Those are their words.

If AIG had been allowed to fail, or do a full reorganization, not as government bailout or buyout, and IF the U.S. taxpayer hadn’t been raped for the $182.5 billion rescue by the U.S. government in September 2008, under George W. Bush, and HIS financial whiz kids, wouldn’t the American economy have been, at least, NO worse off?

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AIG struggles to survive financial tsunami

September 15th, 2008 . by TexasFred

AIG struggles to survive financial tsunami

NEW YORK (Reuters) - Insurer American International Group struggled for survival a day after a financial tsunami overtook investment bank Lehman and forced the sale of rival Merrill Lynch in the biggest financial industry shake-up since the Great Depression.

AIG’s struggles followed the failure of frantic attempts to find a rescuer for investment bank Lehman Brothers Holdings Inc, and Merrill Lynch & Co’s agreement to be taken over by Bank of America Corp.

The U.S. Federal Reserve has hired investment bank Morgan Stanley to review options for AIG, which has lost some 90 percent of its value so far this year, a person familiar with the situation said on Monday.

Fearing a meltdown on Wall Street, the U.S. presidential candidates sparred Monday over who could best restore financial health, with John McCain pledging reform and Barack Obama saying hands-off Republican policies were the problem.

Full Story Here:
AIG struggles to survive financial tsunami

I have been watching the ebb and flow of the market for quite some time now. And I haven’t been very happy with the return I am seeing on my investments.

Today the market went on a panic march based on the near certain demise of Lehman Brothers Holdings and Merrill Lynch. The problem for me is, MY money is tied up in AIG through my wealth management broker. They are his investment of choice, and have, traditionally, returned a nice profit to the investor.

I don’t blame my investment guy, he has his money tied up in the same money markets, but there have been some terribly shady dealings on Wall St. and the recent bust in the mortgage market, combined with the hysterics of oil investments during the recent hurricanes, has greatly contributed to a highly volatile market that is on the verge of doing an *Enron* to everyone that has money tied up in it.

The only bright side to this is the drop in oil prices, as go oil therefore goes the market, and prices are on the way down. If that trend holds it’s bound to give some relief to the financial markets.

I certainly hope it does, many folks are living week to week and have to budget closely. Many are in the same situation I am in, with a fixed retirement income, the luxury in life come from our investments and their returns, not to mention the fact that these investments are the backup for many retirement funds. I can’t rely on the federal government to send me my check every month, not 100% rely on it, just as the others today can’t rely on Social Security as a viable and survivable income either.

It’s going to get bumpy folks, the politicians are pointing fingers, that’s never a good sign. But politics didn’t cause this, unscrupulous business did. Obama is a fool, he is saying “hands-off Republican policies are the problem”, and that only reinforces my belief that we do NOT need so-called leadership from the Dems. I want the government to keep their hands OFF of my money!

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