I Guess This Means AIG Stock Will Rise 10% Tomorrow

I'm with Megan Barnett on this one: The time to announce a 10% increase in your dividend is not when you're simultaneously announcing a $7.8 billion loss in a single quarter. Yes, $7.8 billion. I know we're all getting inured to large numbers these days, but that's a loss rate of $120 million per working day. At an insurance company (AIG). That's just ugly.

It's good they're promoting to vice chairman (rather than defenstrating) their CFO, but I'm slowly becoming disillusioned with this company. Not so long ago, they were the best insurance company in the world. Today, that would be Berkshire Hathaway (BRK.A). And I'm not even sure that AIG is in the top five any more.

Comments

[cranky old ...:]

it's guys like AIG getting involved with things they don't understand like insuring mortgages instead of arson, that makes you think that all of business is as full of crap now as ever before.

insurance is a business where you make nickels, millions of them, one at a time. to get destroyed by an act of god is bad. to self-destruct is criminal

2008 May 08 09:04 PM

[venividivici:]

Oh Felix, this market just gets crazier and crazier, if that's possible. But what does it matter? The players in this nuthouse know that Uncle Ben is there to backtop all of this stupidity.

2008 May 08 09:38 PM

[end of the ...:]

Ridiculously bad news should bring down the price of the stock day after day after day. Aig cannot turn around their short tearm future profitibity. The price of the stock should drop 70% until it can be determined the effects of past business is clearly behind them and when new business is shown to provide a possitive earnings. Financial stocks must totally purge all the past before starting over with the new.

2008 May 08 10:14 PM

[TBill:]

Who is next to post big losses? Are there any insurance companies you can feel confident buying these days? Transparency? What transparency?

2008 May 08 10:42 PM

[John Pseudonym:]

Earnings don't matter. Just buy stocks and hold them. Over the long term you will come out ahead...famous last words of the small investor

2008 May 09 12:44 AM

[samspade:]

A lot of AIG's losses are caused by accounting rules requiring the worst possible mark to be placed on securities that AIG intends to hold to maturity. Those "losses" will reverse and be posted as income over time, as the mortgage markets recover. Investors thinking AIG can't earn anything anymore will miss a great opportunity.

2008 May 09 01:27 AM

[buyitcheap:]

Don't worry they have a plan to "make it up on volume!"

2008 May 09 07:03 AM

[CrossProfit_:]

Ouch!
AIG report is awful, we had to update the e-line for 2008.

See: www.crossprofit.com/vi...

What is most troublesome is the apparent need to raise cash. What happened to the 13B cash on hand? We will have to get clarifications on this. It could be that one has nothing to do with the other etc.

CrossProfit

2008 May 09 07:06 AM

[indigo-alien:]

Awful news. Should run the whole market up at least 1%.

Hey, the Citigroup news todays should be good for at least another 1%.

Look for a 2% day today.

2008 May 09 08:08 AM