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.
This bailout insanity has to stop. It is not working folks, and it will not work later. We have to change the fundamentals on how we look at our financial system and how we cater to the plutocrats on wall street. Leave them in the lurch and cater to the millions of working men and women in this country.
So AIG insured:
Geese that lay golden eggs–failed
Big bonus golden parachutes– oops
"yes, we can insure New Orleans Levy for a Cat 5 hurricaine, why not"
So, now it can't fail?!!!!????
Let it fail, spend the money elsewhere making some jobs and a better system of insurance!!!
I have an idea..........tax cuts for the rich. lol
Just further evidence that this administration has no clue on what to do.
Too angry, frustrated with our past and some of those present politicians, and disgusted to speak---–
The political definition of wasteful spending is - " Someone ELSE is getting the money--not ME."
We the people want things to work in our favor, not just big business, the lobbyists and the special interest. They too are a part of the people but we need that everyone's interest be taken into account.
The President should resort to "Face Book Politics" if that will help him to deal with the mess as well as getting his policies through the Congress.
We the People want the crooks out of business.
How in the hell do insurance companies fail? They fabricate reasons not to pay, and when they do it is always disappointing. They devise our premium based on risk; when that risk is realized they cancel our policies or raise our rates.
I do wonder though–is it because insurance executives are the highest paid executives in the country.
Wow...Coulter and LImbaugh really got to you eh? They're like LSD for the GOP...keeping you all in a completely paranoid-delusional dream land...a kalideoscopic managerie of hate, fear and disproven ideology...while they giggle backstage and count their money. You think they really care about the GOP? They're fully aware the party is going down in flames and are just trying to suck you dry before it's over, rather than do anything constructive. Wake up, "my friend"!!! It pays to have facts and evidence to support what you say and accusations you make. The "intertubez" are the GOP's worst enemy.
Looks like the financial markets have lost ALL confindence in the obama administration's policies. Stocks are down (%) about as much from election day to today as from the peak of the markets to election day. This is a COMPLETE vote of NO CONFIDENCE from the smartest business minds in the world.
Markets forecast what is expected to happen in the future of the economy. Obama has done an excellent job of talking the economy right down the drain.
Bob March 2nd, 2009 10:29 am ET
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.
I understand your frustration Bob, but the bottom line is that many of those earmarks will create jobs in the states being allocated these funds. Bridges, roads, etc. I'm not saying ALL are good, but many of them are worth their price. We need to create jobs to get our nation going once again.
I don't mind the money being spent in our country, but am opposed to constant bailouts for the likes of AIG.
I'm am MORE opposed to 60 million going to FIX infrastructure in Gaza. 30 million is going to humanitarian aid – well, OK, but many need humanitarian aid in this country. Total of that package = 90 million. We should keep the 60 million to help pay for our own problems.
To: Lotta Muni
Read carefully: fourth quarter losses (October, November and December of 2008)–who was in charge of things then?
if AIG fails ,do you people know the amount of jobs that will go with it? it's not as easy as letting AIG FAIL!
I love Obama, he can do no wrong..
Let it all fail.I own an island gettaway and moved all my money to offshore accts. and Dubai.My plane is always on standby,and while you are rioting and standing in bread lines I will be drinking margaritas.
some poster to a blog on this site said that all of us posters need to mariate on the fact that China may not load us money if we let Citi fail
I say that is a false argument and we have lots to offer and the finance banks are a dime a dozen, trade etc
none are SOOOOOOOO important, some other bank will rise us and be rewarded for their good business practices
LET THEM FAIL
do not reward Citi, AIG, etc for their bad decisions
do not put good money after bad, let the bastard go down
they are NOT so important
Greed is what is destroying capitalism in this country........it is a shame that the government has to get involved in private business because some greedy executives mismanaged company funds. It is a shame that it has come to this and i wonder how may other parties they will throw with this bailout........
Bush's defecit was 3.0 Trillion for the year of 2008. So what did he spend it on? Don't know because you didn't ask then. President's Obama's defecit is 3.4 Trillion and he will spend in on Health Care, unemeployment for the many displace from the economic crisis, housing for foreclosure, spending on Bush's Iraq war, and for the failed insurance companies as well as the banks. So where was your outrage when Bush spent 3.0 Trillon on nothing and President has to spend 3.4 Trillion cleaning up his mess.
ENOUGH OF THIS BAILOUTS!!!!!!
People in Congress and Senate has investment with AIG that's the reason they wanted to bail them out at the EXPENSE OF THE AMERICAN PEOPLE!
Lotta Muni> Um. The man's been in office a little over a month now. He's not a magician. And he DID hit the ground running! Are you kidding me?? He's accomplished more in a little over 30 days than W. did his entire 8 yrs in office! You guys just always want something to whine about.
For several more years, we'll be seeing the results of Bush's servitude to the rich and powerful. I'm all for raising taxes on the rich in order to return to the American people some of what was stolen from them with the help of the neocons.
SAID THE FIRST BAILOUT WOULD NOT WORK. ACTUALLY NONE OF THE BAIL OUTS WILL WORK WAY TO MUCH GREED
To put the money in perspective.
AIG loss in one quarter is equal to the amount of silver above ground that exists PLUS 8 years of mining.
Break AIG up and sell it off. That is what is done with other mismanaged companies. Make them file bankruptcy and divest them. Why should we continue to pay executives to drain companies for their own enrichment? If Mr. Small Business ran his company like an AIG executive, would he be bailed out? No he would not. He would be jailed for misuse of funds and embezzlement.