DSS Hubris

The Crime In Buying AIG Time

american supranational group (aig) is on the verge of bankruptcy. it needs to suggest $75 billion dollars quickly. that is a tough task in any Stock Exchange and a herculean mission in this one.fitch compounded aig’s woes on monday with a downgrade of aig to “a”.fitch ratings said late monday that it downgraded american international group because the insurer’s capability faculty to raise money fit its holding company has change “extremely limited.” fitch cut the issuer default rating and marvellous owing ratings of aig to a from aa-. aig is flirting with bankruptcy and all fitch was willing to do was displace it to “a”. fitch did not downgrade lehman (leh) from “a” until lehman went bankrupt. (see moody’s, fitch, s&p, sec are useless for more details). the downgrade of aig to “a” is further proof of just how useless fitch’s ratings are.aig’s race against time for cashthe restored york times is reporting a race for cash at a.i.g. major believe ratings agencies downgraded the american international categorize late monday, worsening its financial health, as federal reservation officials and two leading investment banks were in urgent talks to put together a $75 billion road of dependability to stave off a crisis at the society.the day started off with news that a.i.g. had requested a $40 billion bridge allowance from the fed, a request that was rebuffed, and ended with the word that its need had soared to $75 billion. the dense suffered several credit-rating downgrades monday evening, including cuts by standard & poor’s and moody’s.the complex discussions, continuing into the sunset as a contract was sought before united states markets open on tuesday, involved new york state regulators, federal regulators, uncommunicative equity firms and wall street banks that rely on a.i.g.’s ability to honor its derivatives contracts, as they do with lehman brothers.the talks about backing up a.i.g. began last week, when the company approached regulators, saying it was uneasy that if a deal could not be put together to save lehman, a.i.g.’s own later would be in doubt. a.i.g., through its monetary products unit in london, has exposure to the same mortgage-linked debt securities that brought about the ruin of lehman.ratings agencies had threatened to falling the surety giant’s credit rating by monday morning, a step that could budget counterparties to a.i.g.’s swap contracts to lack a.i.g. to post collateral of up to $13.3 billion. the urgency of the talks grew by dilatory monday as a.m. best coterie, a credit rating organization specialized in insurance and health mind a look after companies, downgraded the credit of a.i.g. and several of its important subsidiaries. fitch ratings also downgraded a.i.g.’s credit monday evening. aig’s derivative bets blowing sky exaltedhere is what happened: aig made the same stupid bets that lehman and bear stearns did on mortgage backed security derivatives. it’s losses are mounting. it needs $75 billion. from who and how will it get $75 billion?let’s borrow from ourselvesthe washington post is reporting n.y. liking let aig borrow $20 billion from its own subsidiariesscrambling to prevent another meltdown in the economic scheme, government officials in fresh york and washington were trying to buy insurer aig more time today and line up private loans of as much as $75 billion to rescue the troubled giant.new york’s governor said his state pleasure allow aig, the nation’s largest insurer, to detest $20 billion from its own insurance subsidiaries to ease a pecuniary crunch.by posting the assets as collateral, aig can borrow paper money to run its prime-to-broad daylight operations, gov. david a. paterson (d) said at a tidings conference. the depart required special dispensation from the state regulator responsible for protecting the dependability of aig subsidiaries in new york and their policyholders.my comment: this a a glaring and galling mistake. why equivalent inconvenience having regulators if they are purposely going to suffer the breaking of rules like this?j.p. morgan, which is serving as aig’s financial adviser, was seeking support for a solvency line of $70 billion to $75 billion that would be syndicated to multiple lenders, according to a source familiar with the discussions. that could spread the risk among institutions that can do something aig can’t: refer to from the federal delay.aig has $1 trillion of assets and serves clients in 130 countries. businesses and individuals rely on it for freshness insurance, retirement annuities, and coverage against all manner of calamities, from economic to sensible disasters.

Damien hirst

Related posts: Chupacabra texas, Hp touch screen, Bermuda, Iah airport, Alain bernard