AIG bailout so far: $123.5 billion. Total value of all AIG stock: $7.4 billion.

[JackRiddler]

This is just getting crazier and crazier.

Why does this company still exist as a private entity soaking public funds? Why wasn't it bought outright?

Or are is AIG hiding another half-trillion in bad bets they're going to need bailed?

October 9, 2008
When Money Flies
Beyond Boondoggles

By DAVE LINDORFF

Critics of government get all worked up when Washington spends money stupidly, or does something manifestly stupid. There was a even senator from Wisconsin, William Proxmire, who used to hand out "Golden Fleece" awards for such things.

The Pentagon's notorious $600 payments for toilet seats that were $12 in local discount stores, or $434 paments for hammers that were $10 in the local hardware store were good examples of this.

But nobody seems to be screaming about the incredibly wasteful rescue of AIG, on which the government has spent first $85 billion and now another $37.5 billion.

Bad enough that the Treasury Department is pumping an astonishing $123.5 billion into a private company to prop it up, but what no one has mentioned is that at the time of the initial announcement of an $85-billion bailout, the insurance giant's stock had crashed so far that it could have been bought outright by the government for a scant $7 billion! That's small change by today's standards. (Today, after all the bailout money, the company’s total market capitalization—the value of all its shares combined--is still only $7.37 billion.)

For $123.5 billion, the taxpayers have gotten warrants that could, if exercised, end up giving "us" 80 percent of the company, but if the government had just gone ahead and bought 100 percent of AIG right away, it would have only cost about five percent of that amount.

MORE

Again, two possibilities: boondoggle. Or fear of what the actual AIG liabilities are.

Credit default swaps need to be phased out as quickly as they were phased in (to present volumes). Anyone knows how it's done?

[JackRiddler]

1. kick for readers - wish recs would also kick.

[Karenina]

2. AIG is all up in that "black budget" stuff.

Tentacles everywhere, each holding a glass of pricey champagne. ;-)

[slipslidingaway]

3. Kick, interesting, what is the value of the CDS contracts written

by AIG? Guess we do not have any right to know.

:shrug:

[trotsky]

4. Wow, sounds like AIG execs need another half-million-dollar spa day

to figure out how they're going to fix everything! Poor babies! :sarcasm:

[seemslikeadream]

5. AIG liabilities

[slipslidingaway]

6. Linking this thread...

which I have only given a quick glance.

What was AIG "insuring" for all those black budget networks?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4169766&mesg_id=4169766

[Leopolds Ghost]

8. Scary. Was that 100 billion money for washed-out execs to "keep quiet"?

[slipslidingaway]

12. I only glanced at the thread so I cannot answer your question...

but maybe someone can in the other thread.

[lostnotforgotten]

7. Does Anyone Wonder Why The American Public Is So Outraged!

eom

[seemslikeadream]

9. It is not good to feed a stray cat

[SammyWinstonJack]

10. Such a deal, for them, that is. Party on AIG! You rat bastards!

[Celebration]

11. for one thing Citi was into them big time

So the Saudi ownership insisted that we save AIG.

But supposedly they are trying to keep the whole house of cards from falling over. But if we just let them fail and go into a depression, at least we would have less debt to pay off coming out of it.

[jazzjunkysue]

13. All I know is, I am voting out any incumbent I can. Period.

And I don't contribute to anything.

[mhatrw]

14. Can you smell the scam?

AIG needs to be in bankruptcy court ASAP.

[DrDebug]

15. Jack, the bailout thus far is $143.5B

They first borrowed $20 billion from their subsidiaries as an emergency loan on the monday prior to the bailout because they didn't have any cash left ( http://wvgazette.com/News/200809170018 ), so the total amount of short term loans in three weeks is $143,500,000,000,000.00