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.
I think this must be a good thing, our government is in the middle of fixing it and it is probably the fault of that idiot Bush. By the way, can i get a caculator with some more zero's so I can follow this as it unfolds?
AIG is a money pit....we need to cut our losses
Amazing how all these nimwits can bash Rush, yet their 'Golden Child', the false prophet who they rant can do no wrong is going to break his first promise (not even 90 days after taking office) and sign a budget with over 8,500 earmarks in it. And since Pelosi and Reid are the idiots running (and ruining) Congress, you know most of those earmarks are for Dems. And then they sit and say, "It's because of Bush." B.S.!!!! You know if it was a Republican president all you freaks would be on here saying he broke a promise. Here's the truth – the economy didn't start tanking until the Dems took Congress – THEY ARE THE ONES AT FAULT.
Yet we're supposed to listen to all you dolts who have no idea of how economics of business is run, telling us how to fix the economy? Yeah, right!
The Dem Congress – FAILURE
The False Prophet – FAILURE
But on the plus side, the Dems are well on their way to making themselves irrelevant.
President Obama, let this company fail! Make an example out of them! This will put the others in corporate America on notice that you just can't keep coming back to the well everytime you mismanage your funds. If anyone deserves more money it's the teachers in our schools.
Let AIG Go under.........they partied enough and have poor management.........if you want to help someone that is scrambling to make a difference..............Focus on the Auto Industry...........they are bending over backwards to make changes
Can I buy stock in the fedreserve bank,the worlds largest privately owned bank.They will make trillions in a complete meltdown?
Our country is being run by idiots. Does the term "black hole" mean anything to anyone? If the goverment had stayed out of the mortgage business to begin with (in other words if it had not pressured banks to lend to certain demographics), we would not be in this mess. Now just what we need is more government intervention. It needs to butt out and let the free market rein.
Not again. Look, I'm all for gvt spending and am very Democrat but there comes a time when you just have to let a company fail if its going to rather than continue to try to breath life into it.
Its dying, let the company pay for what its done.
let aig go bankrupt we need to keep captilism
Does anyone, anywhere, outside of AIG have any idea how the bailout money has been, will be, should be spent??? Can the Obama Administration force AIG's hand and require absolute detailed accountability for all dollars? This is a product of the Paulson/Bush debacle. We need to know NOW before anymore handouts!!!!
Yay! Obama! George Bush's bailouts were horrendous and didn't work and Obama's are more expensive and will fail just as quickly as W's did. Obama is a joke – but this is what you get when you elect someone with a whole three years of experience (that's counting the year and a half he was on his campaign trail). I hope this country can survive this storm and stop spending money we don't have. Obama's first few months are a dismal failure. He would also fail Economics 101.
How in the world does an insurance company go belly up? GREED! Let them fail they are doing damage to the Stock Market, Our wallets, and future companies that actually need help. This is a publicly traded company that should not be... They need to ceast to exist. They CANNOT HANDLE THEIR COMPANY. Plus they had a lavish vacation with the last funds. This proves they are not serious. LEt them fail!
It's about time for AIG to die a natural death!!!!
What do the S&L scandal, the dot com bust and our current problems have in common? The period of "prosperity" preceding them was based on futures, derivatives and other imaginary commodities. Nothing of real value was produced. The current recession is just a return to a more realistic notion of what has value and what does not. Instead of investing in imaginary commodities, we should be investing in things that actually have value like education, healthcare, infrastructure, technology, you know, stuff that benefits us all and not just the wealthy. But that would be socialism, right?
AIG, like GM and Citi, are a "moral hazard" that are holding this country – and the rest of the world – hostage while extracting ransoms couched out bailouts.
The hard truth – and I mean hard truth – is we have to take our lumps now and let these companies fail. If they are so big that our economy along with our society "needs" them to function then they are to big, period. For the sake of our nation and our future generations our goverment must take them over, break them up, clean them up and sell them to the highest bidder.
Just like the railroads, steel and big oil of long ago they have to be busted up into smaller, more managable and far less dangerous companies...
Obviously something is seriously wrong if after two bailouts the company is still failing. It's time to put AIG out of our misery. Let the government liquidate it and get our taxpayer infusions back. After all, I think we pretty much bought the company. There appears to be no hope to save AIG.
Wish people would stop placing the blame on Bush for everything. The housing issue started back when Clinton, et al made it possible for everyone to buy a home even if they weren't qualified. Bush's mistake is he allowed this to continue to happen. Both parties share the responsibility of our issues. No one party or President is clean.
With all this socialist talk, People complaining about handouts. This is corporate welfare. They have plenty of money already. This is a gold mine. None of these Republicans complain when they are getting the money but oh my a person who recently lost his/or her job, or is disabled. They cry welfare! WOW,
Since Obama took office 40 days ago we have seen one program after another rolled out. These programs are nothing but confusing and very unclear as to what their purpose and goals are. Hillary Clinton was absolutely correct when she stated that Obama is only good for delivering a good speech and has no substance. One only has to look at the State of Illinois, and see the mayhem occuring there. Everytime an african-american politician has been put in charge of something it turns into a complete failure. All you have to do is look at Washington D.C., Detroit, Cleveland, New Orleans, and Philadelphia. Why would you expect anything different from Obama. This country and the economy will be in shambles by 2012. Sen. Burris has been in office for less that two months and look at the chaos in Illinois.
Hey, get it right, AIG's new name is 21st Century, that way when we the taxpayers lose another half-trillion or so we won't feel as if we've been totally raped and left for dead.
Have a heart already!
Everyone is saying "let them fail". What you don't realize but can verify from goverment data is that Obama took Big Money from Big Finance corporations. There is no way he is going to stop the payback.
This is another example of how the DNC (bailout) and the RNC (tax break) are alike. They give money to corporations! One way or another.
AIG IS D.O.A!! But protect their bonuses and golden parachutes.
Vote for change? The only thing happening is Obama is spending the last of the taxpayers change! It will take decades to clean up the mess the dumocrats are putting us in. STOP THE BAILOUTS.
I am so sick of AIG asking for more money and then squandering it on un-neccessary expenses and then coming back and asking for more. How about us? Can we have some of this money? Why don't they just give us the money and divide it up among us? All these hotshots at AIG seem to do with it is waste it and spend it on themselves and then ask for more.
If these people couldn't get themselves on track with the 1st bailout money they got, what makes the American people think they will get on track this time around. NO MORE BAILOUTS – get these companies to write out there own PLAN OF ACTION to get themselves back on track! Use that action plan as a their own guideline to see if they really are making the changes we the TAXPAYERS want to see made. If I have to balance my own checkbook without TAXPAYER money, so should others!