NEW YORK (CNNMoney.com) - Insurance giant American International Group reported a stunning $62 billion quarterly loss on Monday, while government officials unveiled their latest efforts aimed at preventing the collapse of the firm.
Overwhelmed by ongoing deterioration in the credit markets and charges related to its restructuring, AIG's losses overwhelmed the firm during the fourth quarter. Its $61.7 billion loss amounted to $22.95 per share.
AIG's loss for the full year was even more dramatic - $99 billion. In 2007, the company reported a profit of $9.3 billion.
To keep the company from cratering and causing broader fallout across the financial system, the government said it would overhaul its bailout, which is aimed at helping the besieged firm unwind in an orderly way.
"Given the systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high," Treasury said in its announcement.
One main goal of the revamped rescue plan - now totaling $162.5 billion - is to help boost AIG's financial position by, among other things, reducing the interest it pays the government on its loans.
Key components of the plan included the government's decision to commit another $30 billion to the firm in exchange for cumulative preferred stock. The payment, which will come from the second half of the $700 billion rescue package enacted last fall, will not be a one-time payment but AIG will able to draw down the funds as needed to help strengthen its capital base.
Are the CEOs and upper management still getting their bonuses? That's all that matters.
I know it gets people fired up and whatnot, but please let's not keep talking about Ann Coulter and Rush Limbaugh. That is just smoke and mirrors and distraction to the real problems we face in this country. We have a huge spending bill that was rammed through that is going to hang around our necks for a decade or better. And the details of the bill are stomach-turning.
Did you know that there was $50 million allocated to cleaning up old mines out West? 50 MILLION. Did you know the "tax cut" is not a tax cut? It's a tax CREDIT. There is no change to the tax RATE you are subject to – meaning that you are actually TAXED on the additional 13 dollars in your paycheck. This was set up this way so that Obama could claim he cut taxes. It's smoke and mirrors.
when is the government going to get it?? we will never start spending and help dig out the economy as long as these crooks are being bailed out everytime you turn on the news. we are sinking like a rock and yet big banks stay afloat with billions being given to them by the government....where is our money to help us pay our debts?? my bills are due....where is my stimulus check?
ANOTHER REASON FOR UNIVERSAL HEALTH CARE!
Corporate welfare? Socialism for the wealthy to get the rest of our taxes?
My ONLY comment on this offer for another bail out:
..................... you got to be kidding?
I believe it's time to let these companies fail, because they already have, they have shown that they ARE NOT going to change the way they do business, they need to have to start over the way so many Americans are having to do because of them.
Sure why not? Another 30 Billion for executive bonuses, and don't forget golf season is close they will need this extra amount of taxpayer money to pay for all of those golf tournaments and parties.
What to do....???
Yes! Let's keep throwing good money at bad companies!
This is why Chapter 11 was created. Instead of giving these companies (AIG, GM), they should be forced to go into Chapter 11 and restructure. Until then, the bad business practices will continue.
Obama is in control and the economy is tanking worse than ever. Some say give him time, but I say what ever happened to his promise of hitting the ground running on day one? I guess that went the way of so many of his campaign promises or pledges. The Democratic party backed the wrong horse for certain. I hope we can weather these next 4 years.
What is so wrong with the republican party that they use someone like Rush Limbaugh as their keynote speaker for their big pow-wow? Rush Limbaugh!! Take away the drug use, the shameless self promotion, the hope of failure to rebuild this country, and his nastiness and he is still a do nothing, complainer, windbag to the enth degree! Why do republicans insist and shooting themselves in the foot, and various other appendages to run down an attempt to fix what's ailing this country? Next thing you know they will further employ the likes of Newt Gingrich and George W. to spread further hate of change. What's next? David Dukes?
AIG is a cancer that needs radiation – nothing less.
The fact that SOMEONE (bush) just let this country stick it's slimy tentacles in so many different business ventures with no oversight is ridiculous. Our economy should not be running solely on one cooperation so we should technically be able to cut them loose and not feel one pinch.
But we can't. Because all the people that ran it...lobbied the republicans that ran our country into the ground to look the other way, while they bought million dollar spa trips with other people's money and got 14,000.00 trash cans from shady business deals.
Any company in our economy that is too big to fail must be restructured into smaller pieces. We cannot be held hostage by corporate irresponsibility and mismanagement. It is time to start Chapter 11 for these companies to restructure and regain profitability. The bailouts have lasted much too long as we are now bailing out the bailed out!!!
To say any company is too big to fail is nothing but a big lie. This is nothing more than another story of how the rich and wealthy hates to depart from their MONEY! This is too SAD! People are truly starving to death in America but TARP is more important.
Obama will sign a budget today to run thru september that will have 8600 earmarks totaling 8.6 billion dollars. So much for change. This may turn out to be the most corrupt administration and congress in history.
Yeah, go ahead AIG, keep wasting the taxpayer money you get on ridiculous bonuses and vacations.. technically, US currency hasn't been worth anything since 1913 anyhow..
They've had their chance. Time to show people what it means to take responsiblity. Don't bail them out, don't nationalize them. Let AIG go already and spend the money on the people.
Just keep handing over my hard earned. I don't mind. They can just keep loosing money and we will just keep handing it over.
@ HAD IT....... Well said! I agree!
TO CONGRESS & PRESIDENT OBAMA:
PLEASE LET AIG FAIL......... WE ARE SICK OF HELPING THESE GREEDY-CROOKS!
Last night, on "60 Minutes" one of the segments was about Maddoff (sp?). The man who blew the whistle did so in ........2000....... 2001..... 2005 and in 2008!
THE SEC DID NOTHING........ NOTHING! THE WHOLE LOT OF THEM ARE IN BED TOGETHER!
COME ONE ATTORNEY GENERAL THE SEC & WALL STREET NEED TO BE INVESTIGATED AND CLEANED UP!!
OUR NATION HAS LOST CONFIDENCE, IN WALL STREET HOW CAN WE TRUST THESE CROOKS???????????????????????
As Rush would say,"let them fail,we need a total collapse of our monotary system,thats good old Capitalism at its best".I wont be affected,all my money is hidden in offshore accts,plus a own an island getaway.
The CEOs, the officers, the ones who are making the bad decisions and getting the big bonuses - they should pay for the problems, not the taxpayer.
It's one thing for us to try to keep companies going in rough times so people keep their jobs (I don't want to stand in line at a soup kitchen either), but this is putting more money after bad.
Who cares if the CEO's and upper management are still getting their bonuses! You guys just don't get it. You can't save poorly run companies by giving them money, you let them fail and take the hit rather than throw good money after bad again and again and again. (and before you say "well GWB did it, first that's not excuse to do it again and second BO voted for the bailouts!!!)
Banks, slighly different issue as they were forced by the Clinton administration to give the poor loans, (no wonder the economy boomed under Clinton and tanked under Bush), so how can you say no to their bailout when the only reason they need one is congress forced them into this situation. True they exploited it on the promise that the government would back them.
Just examples of when congress gets involved, the economy tanks.
And you want more government involvement?
Please people read up on the issues before commenting based on the latest dimocratic story, (and I mean story) line.
Since Obama has it in for big business, let AIG fail and give those billions that would otherwise be wasted on a AIG bailout, back to us the American people.
Too big to let fail = too big to not break up under anti-trust
These gigantic corporations grow to their titanic sizes, and during the good times they keep all the profit. They take huge risks and operate in such a way that their smaller competitors can't keep up.
Then the companies start to fall apart, and the risk to the market is too great that it has to be bailed out. And once again, the smaller competitors can't compete with a federally subsidized behemoth.
The solution is simple, once a company gets to the point that its too big to let fail, it has to be broken up.