dtrader

AIG: An Attractive Buy, If...

Not so quick...AIG has gotten itself into a horrendous mess and just because the gov't has advanced them enough money to keep them afloat for now doesn't mean this company can pay off it's debt and resurrect itself again as a substantial insurance company.

Why? For one reason I am skeptical that the non-insurance assets that they want to sell to pay off their losses in CDO's and the loans from the gov't will not be enough. This would lead to the selling of their prize assets that u r relying on in ur argument to resurrect AIG as a viable insurance entity.

U have seemed to buy into managements argument which on the surface can be a compelling story. The trouble is that new management is trying to put a positive spin on their actions to right the ship which is predictable but not always as accurate as they would have one believe.

U and I really do not have the access to see inside this company to see how deep their money problems go. It is possible that management itself still cannot figure it out so I'm not so sure u should be painting a rosy picture at the end of the tunnel until it is clearer on how deep their financial problems go.

Another indicator is that all private equity that could buy AIG as a whole if they believed what you do have shown no interest in the firm as a whole just cherry picking some of better assets at fire sale prices.

Good luck with ur speculation but my instinct tells me to wait until I see more evidence that those insurance assets will be there in the longer run.

AIG Downgrades Should Create an Endgame

Sliman...I bought some cheap OTM Sept options yesterday but 4 the most part i'm not interested in playing the market this way. It was more 4 fun than a gamble to make a killing if AIG finds the capital and the stock jumps up

AIG Downgrades Should Create an Endgame

Tom...The new use of mark to the market accounting on the assets of these financial institutions has probably been a major contributing factor to the rapid disintegration of the valuing of these companies.

The ineptitude of the CEO's and the Board of Directors should also be looked into. Some of it borders criminal if u ask me.

AIG Downgrades Should Create an Endgame

Gabe..with all do respect the short rule is like a fly in ointment with this systemic meltdown. If by the short rule u r referring to threshold securities then I also do not understand why AIG and LEH were not put on this list as was done by the SEC with ABK and MBI. That does help to slow or stop the panic short selling when there is a major crisis occuring. I also agree that there should be no naked short selling allowed. The uptick rule is another story and actually is not good for the market.

But I didn't want to get hung up talking about short rules when today the the country will be facing a financial catastrophy of unkown proportions that could bring our financial systems and the worlds to a halt if no solution is found today and AIG declares bankrupcy on Wednesday. The $75 billion AIG is looking for as a bridge loan is just small potatos if AIG goes into bankrupcy and their credit rating is downgraded again forcing trillions of dollars of swaps held by AIG to be unwound and virtually bringing the financial system to a halt.

Kinda sounds like the day the world stood still. Let's hope it doesn't come to that.

Should be an interesting next couple of days.