scaper
Fed squeeze
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...
read moreAIG Shareholders victims of political hurricanes
Talk about predatory lending: even though issuing the preferred still doesn’t guarantee control of the company. Either way new terms ( these are not the same terms AIG initially announced ) are very tough for AIG shareholders.. Where are the shareholder lawsuits ? at the end of the day the Fed will mess up running the company so both taxpayers and shareholders will lose – so at the end of the day the lawyers will make the money… ( so will the private equity funds that pick apart AIG at fire sale prices)
read morePoliticans Fiddle While Wall Street Burns….
In a classic example of the inherent conflict of interest within the government between politicans seeking additional power and doing their job to work FOR the people… If a company was run like the US government it would be long bankrupt… and now they will be running AIG…. The politicians continue to work for themselves and to maintain their own power. Replace the Fiddle with the classic “Press Releases and sound bites” issued by the politicians and you begin to think that good old Nero does not sound so crazy
read moreRepost from March 2008:Man Vs Machine….
Man Vs Machine…. March 13, 2008 by admin. What is a major cause of this economic crunch we are in…. I think a root cause is the technology our banks have created and use to make them more financially sophisticated and to “improve” the way they do business. We are living in a very crazy economic time brought upon ourselves by the ability to slice and dice any security stuff it into a computer and in theory make money. ITs a big game with big stakes and big risk. ITs also a game where the participants ( banks, hedge funds etc)...
read moreAIG Reality- The Super Sizing of Investors..
After listing to various mainstream media outlets it is clear that the many people ( including the reporters reporting the story) believe that the government actually owns AIG . In addition a quick google search will show that many sites believe the same thing see- http://www.newser.com/story/37644/what-is-aig-now-that-we-own-it.html as an example . Besides for the obvious inaccuracy this proves another point : we are a nation of professional investors ( with all the information available to us) but, the grasp of the details on how...
read moreBailout: Typical media response..
Just heard estimate of 2000 per person cost of bailout… Media throwing out that number and also insisting on as the NY Times wrote : “How will Congress balance the bailout of Wall Street and the needs on Main Street? If financial markets stabilize, all Americans will benefit. But Congress must do more to provide direct help to struggling American families. Lawmakers should use the bailout legislation to also extend unemployment benefits, bolster food stamps and provide aid to state and local governments to provide health care and...
read moreAIG changes SEC filing….
did they read my post…..? so I guess it was lawyers errors after all.. either way the main point re shareholder approval seems to be accurate
read moreAIG – Deal Changed – Likely to remain NOT government owned
AIG is really smart or really lucky or Both. As I suspected rules are rules and even the Fed would require a shareholder vote on taking a majority stake in the company. In addition it is unclear as to what the warrant price will be ( or if there will be no price ) – remember AIG is not giving the Fed a stake in the company in exchange for the loan ( and that is NOT what the shareholders will be voting on) Rather they will be issuing a Warrant. The price, time etc are not known. It should be noted that the SEC filing is...
read morePerfect Storm ( reposted from Oct)
Perfect Storm See this article in WSJ re decline in business lending. True it is not definitive but it gives you an idea of what we could be dealing with. http://online.wsj.com/article/SB119301007770066437.html?mod=hpp_us_whats_news We are heading towards a scenerio where we may just have the rug pulled out from under this market. That being said I it is hard to time the market rather, the idea is to limit risk to acceptable levels. For me we are way beyond acceptable levels when it comes to risk. ( mind you I would not have...
read moreAIG: Risk/Reward
AIG seems like a likely buy. Sure the whole investment could be a loss but the risk reward ratio is compelling. Lets see what happens. After all it now fits into my strategy of buying penny stocks when they are penny stocks…not before they become penny stocks ( more on that later)
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