Fed squeeze

Oct 2, 2008 by Sam

The Fed would have been far better off taking a smaller stake in AIG ( 20-30 percent) . It would have given the remaining shareholders some upside and would have allowed the market to value AIG like any  publicly traded entity company with a rock solid financial backing. Now, the government has outdid itself by taking away employee incentive ( believe it or not- many people do not want to work for Uncle Sam) and not allowing AIG to be valued on the markets as it should. (Given it’s lousy trackrecord on creating “taxpayer wealth” No one really knows what the government will do with it’s “investment” on AIG ) It’s a Pity. Everyone could have made some good money. Now, it it likely that no one will. AIG Shareholders, AIG employees and all taxpayers all lose- strangely enough I am not sure who actually wins…..