The 12th Commandment Posted October 30, 2008 Share Posted October 30, 2008 Admittedly I'm no finance expert, but it seems to me there's a chance we might throw all that money at these sob's and they still might go under. I sure would feel better if we had somebody telling "I don't care if you want to wait to tell us where the money's going, if you want any more spill the beans now." What a freakin' mess.:doh: "The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting. "You don't just suddenly lose $120 billion overnight," said Donn Vickrey of Gradient Analytics, an independent securities research firm in Scottsdale, Arizona. Vickrey says he believes AIG must have already accumulated tens of billions of dollars worth of losses by mid-September, when it came close to collapse and received an $85 billion emergency line of credit by the Fed. That loan was later supplemented by a $38 billion lending facility. But losses on that scale do not show up in the company's financial filings. Instead, AIG replenished its capital by issuing $20 billion in stock and debt in May and reassured investors that it had an ample cushion. It also said that it was making its accounting more precise. Vickery and other analysts are examining the company's disclosures for clues that the cushion was threadbare and that company officials knew they had major losses months before the bailout. Tantalizing support for this argument comes from what appears to have been a behind-the-scenes clash at the company over how to value some of its derivatives contracts. An accountant brought in by the company because of an earlier scandal was pushed to the sidelines on this issue, and the company's outside auditor, PricewaterhouseCoopers, warned of a material weakness months before the government bailout. The internal auditor resigned and is now in seclusion, according to a former colleague. His account, from a prepared text, was read by Representative Henry Waxman, Democrat of California and chairman of the House Committee on Oversight and Government Reform, in a hearing this month. These accounting questions are of interest not only because U.S. taxpayers are footing the bill at AIG but also because the post-mortems may point to a fundamental flaw in the Fed bailout: the money is buoying an insurer — and its trading partners — whose cash needs could easily exceed the existing government backstop if the housing sector continues to deteriorate. Edward Liddy, the insurance executive brought in by the government to restructure AIG, has already said that although he does not want to seek more money from the Fed, he may have to do so." click link for the rest http://www.iht.com/articles/2008/10/30/business/30aig.php Link to comment Share on other sites More sharing options...
Veretax Posted October 30, 2008 Share Posted October 30, 2008 While there is some cause for concern, AIG is a huge, I mean huge company. Link to comment Share on other sites More sharing options...
brianm23 Posted October 30, 2008 Share Posted October 30, 2008 They played us for fools the moment Paulson got to be the Sec. of Treasure. Hey look guys! We can do shady stuff and make like we are banking in tons of money until it hits us in the face, and our boy Paulson will bail us out with tax payer money!! Now, who wanted the 50 million dollar bonus? Link to comment Share on other sites More sharing options...
FanboyOf91 Posted October 30, 2008 Share Posted October 30, 2008 Lehman Brothers went bankrupt with about 600 billion in debt, if I remember correctly. Those derivatives can be a *****... Link to comment Share on other sites More sharing options...
dockeryfan Posted October 30, 2008 Share Posted October 30, 2008 Paulson is a criminal, and he should be tried for treason. Supporting a bailout of AIG was cronyism at it's best. Link to comment Share on other sites More sharing options...
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