Why AIG can't fail...just yet.
As is reported in here in Reuters.
(if you can call it that).
....
So until the mess is sufficient cleaned up, AIG will continue
to suck money from the treasury. After that, it' will be just a bad
footnote in history.
C
The Wall Street Journal reported onAnd this is the main reason for it's continued existance
Friday that about $50 billion of more
than $173 billion that the U.S.
government has poured into American
International Group Inc (AIG.N) since
last fall has been paid to at least
two dozen U.S. and foreign financial
institutions.
The newspaper reported that some of
the banks paid by AIG since the
insurer started getting taxpayer
funds were: Goldman Sachs Group Inc
(GS.N), Deutsche Bank AG (DBKGn.DE),
Merrill Lynch, Societe Generale
(SOGN.PA), Calyon, Barclays Plc
(BARC.L), Rabobank, Danske
(DANSKE.CO), HSBC (HSBA.L), Royal
Bank of Scotland (RBS.L), Banco
Santander (SAN.MC), Morgan Stanley
(MS.N), Wachovia, Bank of America
(BAC.N), and Lloyds Banking Group
(LLOY.L).
(if you can call it that).
Bankruptcy for AIG would have led toEuropean and probably Asian, Middle Eastern, Austral Asian
complications and losses for
financial institutions around the
world doing business with the company
and policy holders that AIG insured
against losses.
Representative Paul Kanjorski told
Reuters on Thursday that he had been
informed that a large number of AIG's
counterparties were European.
"That's why we could not allow AIG to
fail as we allowed Lehman to fail,
because that would have precipitated
the failure of the European banking
system," said Kanjorski, a Democrat
from Pennsylvania who chairs the
House Insurance Subcommittee.
....
So until the mess is sufficient cleaned up, AIG will continue
to suck money from the treasury. After that, it' will be just a bad
footnote in history.
C
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I'm curious about how much out of the U.S. Treasury is going to Asia--Industrial & Commercial Bank of China, ICBC, China Construction, Bank of China, and Mitsubishi UFJ Financial
Or to Saudi Arabia's National Commercial Bank.
It's likely that all these institutions greatly reduced their exposure to the U.S. dollar as its value sunk during the Bush regime.
I'm also curious about who we borrow from the most.
March 7, 2009 9:03 PM | Reply | Permalink
"That's why we could not allow AIG to
fail as we allowed Lehman to fail,
because that would have precipitated
the failure of the European banking
system,"
I'm not buying that.
March 8, 2009 6:01 AM | Reply | Permalink
It does sound suspect. The whole topic is troubling. I've never read so much about one subject and been able to synthesize so little.
Politics can make government so blurry.
March 8, 2009 7:16 PM | Reply | Permalink
There is an evident attempt to keep any discussion or information superficial. At some point that makes sense, like true trade secrets should not be discussed publicly. But Geithner and Bernanke seem to have a conspiracy of silence beyond the superficial lip service.
I'm concerned that Obama has caught the disease. He had promised to listen and tell us the truth. Well, the truth is not simplistic sound bites or vague ressurances.
March 9, 2009 12:53 AM | Reply | Permalink