Opher BanarieAIG Gets $30 Billion More
March 2nd 2009 04:31
Fox News is reporting that
Just last week we learned that the Treasury has taken a 36% ownership position in Citibank. The White House insists this is not nationalization because they have not replaced the management or board of directors. So what? The government is the largest shareholder and can easily vote to replace management on a whim. And that's (a) exactly why Citibank stock is selling for $1.50 and (b) what investors are afrad of. That is how politics is done in the US now - on a whim.
So what will happen to AIG? Why are they needed to stay in business? After all, there are many other insurance companies. And insurance is a global business. Where does this end?
The situation will only get worse from here. What limits are there on these government programs? How can anyone object to ANY government spending when we are allowing billions to be spent on every dubious program possible?
American International Group (AIG: 0.4299, -0.0721, -14.36%) and the federal government will announce a major restructuring of the insurance giant’s government bailout Monday morning that will commit the Treasury Department to invest up to $30 billion in new equity in the company if it needs it, a person familiar with the negotiations told FOX Business.
AIG has gone from being the largest insurance company in the world to the largest sink hole. At what point does the taxpayers' responsibility to "bail out" a company whose management is completely in the dark end?Just last week we learned that the Treasury has taken a 36% ownership position in Citibank. The White House insists this is not nationalization because they have not replaced the management or board of directors. So what? The government is the largest shareholder and can easily vote to replace management on a whim. And that's (a) exactly why Citibank stock is selling for $1.50 and (b) what investors are afrad of. That is how politics is done in the US now - on a whim.
So what will happen to AIG? Why are they needed to stay in business? After all, there are many other insurance companies. And insurance is a global business. Where does this end?
The situation will only get worse from here. What limits are there on these government programs? How can anyone object to ANY government spending when we are allowing billions to be spent on every dubious program possible?
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