AIG: Another Bear Stearns?

American International (AIG) just traded for $34.63, effectively matching its ~10 year low ($34.60) that occurred during the Long Term Capital Management problems. (September 1998.)

[click on chart to enlarge]

Although the shares could bounce off the ~$33-35 price level, such a bounce could prove ephemeral as selling pressure this resolute indicates Wall Street fears AIG could be another Bear Stearns (BSC). All in all, not good, not good at all.

Of course, we all would be remiss if we fail to acknowledge that Wall Street gets things wrong quite often -- which helps create opportunities for investors of all stripes.

Full Disclosure: Not long American International.

Comments

[FIG trader:]

Thanks for the absolutely brilliant insight

2008 May 29 06:51 AM

[helplessobs...:]

It looks like AIG rolled the dice with their insurance reserves backing their issurance of debt swaps. If so the insurance regulators will soon be on their trail.

2008 May 29 04:24 PM