fxtrader07

The Greatest Short Sale in History

I bet a lot of people thought the same about Japanese govt bonds back in 1990, 1991, 1992....
ultimately, the treasury bonds will be the greatest short sale ever. But not just yet. and being early on this one by a couple of years means being wrong and getting killed.

Why I Bought AIG Last Week

I agree and went long AIg at 2.50, too.However, I expect those sales that you outlined to generate substantially less - likely just about 55-70 bn $. the reason is that everybody knows that AIg has to sell the stuff asap and that there are plenty of opportunities out there for people with cash.
as I see it, the warrant structure has already been chosen for the fed to have the option to not take AIG over. In any case AIG below $3 looks like obe of the best opportunities in finaical stocks out there because further downside imho is almost non-existant. except, if you expect financial armageddon. But then again, my small, speculative stake in AIG might be the least I will worry about.

Financial Crisis: This Is the Real Deal

Yes. I do. McCain the bum said AIg should be allowed to fail and talked about moral hazard. What a display of utter economic dumbness and ignorance. It's like refusing to let the firebrigade put off the fire in the city centre because the homeowner ther played with fire and should not be encouraged further. heck, who cares if the entire city burns down. I am sure McCain is diversified enough with - how many 5-7?- houses to weather it.
frickin' unbelievable. It seems, the man could even be worse than GWB - and that MEANS something.

AIG: The Cramer Conspiracy Theory

Felix, your irgnorance is telling. Naked shorting IS a huge problem as even the SEC reluctantly admits. Just look at JOSB . 107% of the float is shorted! 107%!!! even for you it should be evident that this is impossible if rules were enforced. But they are not and hence these illegal practices can continue. That Cramer now rants about it, is absurd however, because many of his hedgefund friends have profited enormously exactly by relentless shorting and by taking advantage of the SEC's ignorance and inactivity.

AIG Lives Another Day; Shareholders? Not So Much

sorry for the typos. it should have read
'anyone who claims he is happy to have bought a stock at $5 while it now trades at $3-$4 is deceiving himself and/or others.'

AIG Lives Another Day; Shareholders? Not So Much

@user 260553: anyone who claims he is happy to have bought a stock at $% while it now trades at $3-$4 is deveiving himself and/or others.
while you could make a case for a $8/share book value after dilution this doesn't guarantee you at all that aig will ever trade at $8 again. fire sales and those $17-$18 billion in interest payments on the fed bridge loan will go a long way in destroying book value.
Ihave no idea at what price AIG's shares might trade ayear from now, but my best guess is it will be somewhere between $1 and $5. if another dilutive loan is needed then áll bets are off, of course

AIG Buyout: In the Long Term, We'll Pay For This

The fed makes a 12% loan on 85 billion$ with essentially zero risk (backed by all of AIG's assets) and on top of it gets a 80% stake in AIG.
Go that?? They get 17BILLION $ in interest income from this!!! That#s 17 billion return on an invested capital of zero. If that isn't a bargain for the fed, i don't know what is

America Buys AIG

It's a ridiculous deal robbing AIG's shareholders and giving the fed and the govt. a very very sweet deal. this is not a fannie/freddie with zero equity. this is a giant pürofitable insurance company with temporary liquidity problems and a huge potential for write-ups in the coming years. make no mistake - the fed will make a ton of money from this deal.

The Nationalization of AIG

Actually the u.S. govt got itself a very very sweet deal. For a loan(!!!) they get a 79.9% equity stake(!) in a profitable company that has trouble only in one segment of its operations. And, given sufficient time, these troubles will ease and cause a huge write-up of many billion $ that had been written down on mark-to-market accounting. It#s almost unbelievable that AIG agrred to this deal and rejected others before. C'on, they will be able to repay the loan which is covered by all of AIG's assets anyway. This is no bail-out, this is expropriation of the shareholders of AIG by the govt.

The Nationalization of AIG

i wonder what the ratings agencies will do now. upgrade?
it's all a frace - especially the ratings agencies. They should be abolished alltogether. The continue to add negative value to the markets

BofA, Lehman, AIG: The New Financial Realities

@guilamo: it could be a self-killing, i.e. harakiri. time will tell.

BofA, Lehman, AIG: The New Financial Realities

@paul&Shark: wtf? who cares how much you made or lost?
btw: people who need to brag about their trading success usually lose their money pretty fast. so better watch out

Crunching Numbers: Why I'd Buy AIG

@peter6: things that look similar on the surface might be totally different actually. AIG approaching the Fedv is good news. Regardless what happens to LEH and MER, AIG is extremely important to the real economy due to its insurance products. They will not be allowed to fail. of course another question is how low they hammer AIG's stock price and as the author correctly pointed out, the ratings agencies are a big unknown. Actually, the ratings agencies should be shut down immediately. upgrades and downgrades are by now done opportunistically and reflect more public pressure than rational analysis. The problem is, they can drag down companies by succumbing to the dumb demands of the crowd
Imho AIG's debt is secure and safe and a buy here.

AIG and the Lunacy of GAAP Reporting

thanks Tim travis, for the follow up. That's clarifying some points. However, i have a problem with your assumption that AIG will continue to grow its business (and even if, the rates might be much lower than in the past) and second, that prior RoEs should not be tataken at face value. Lots of these 'returns' were coming from what is now junk and causes all those writedowns. So i think, as for many banks, the 'normalized' (i.e. non-bubble) earnings and RoE numbers might in reality be significantly lower. add to that that the insurance business faces an almost unprecedented glut of money (driving premiums to low and sometimes unreasonably and absurdly low levels) and you have another thing to worry about. because AIG needs cash badly and that might lead to writing new business by sacrificing profitability and underwriting standards.. Imho, ABK and MBI (and in a somewhat different business segment, PRS) are the better plays for exploiting overly hefty GAAP-writedowns. AIG has too many other problems besides those issues for my taste. Won't touch it yet.

AIG and the Lunacy of GAAP Reporting

Well, in principle, the author is right, BUT: Not all GAAP losses can and should be disussed away like that. As it stands, AIG has taken on far more risk at unreasonably low prices than they should have. And the problem is, NOBODY out there has yet a clue what the final outcome will be. If you want to take comfort in AIG's future loss estimates on their portfolio, please do, but I for my part won't. AIG's mgmt has proven time and again that it cannot be trusted. You may as well get another derivatives nuke blowing up.
What is the 'correct' current value of AIg based on their expected normalized earnings, normalized adjusted book value and cash flow? Has anyone figured that out with a reasonable degree of accuracy? Can the author tell us anything about that other than he thinks AIG's stock is 'too cheap'? If not, what is that notion of 'too cheap' based upon?