helplessobserver

Does AIG Still Have a Pulse?

I agree there is little hope for this puppy and you can take it to the bank that the taxpayers will get back little of their money. Most of the fed funds went to fat cat counter parties to make their insurance on their bad bet loans good. The USA is a loser, 11B in WWI debt remains unpaid, never a thanks for the 11B Marshall plan gift, more billions to crush Japan in WWII without any help. $500B squandered in Viet Nam, and the list goes own. While all this is going on we maintain peace with our 24 Trident ballistic missile submarines ready to vaporize any significant military threat.

Unwinding AIG’s Derivatives Exposure: Loomis and Buffett

In the coming financial "emergency" all swap derivatives contract settlements will be handled like the Tulip Bubble option. All contracts will simply revert to their initial conditions where premiums will be returned to buyers and collateral will be returned to the sellers and all contracts are cancelled. A super Force Majur will be declared.

One Easy CDS Fix

Wow, GS has liabilities that exceed its ability to pay by 1056%. It had better not return the TARP equity injection. Such lunacy demands correction.

After AIG: Which Insurer Is Next in Line for a Federal Handout?

Excellent article.

Leave AIG to Its Own Devices, Including Bankruptcy

My view is that the AIG Holding Company is toast now that the public has seen where the taxpayer bailout money has gone. If Congress puts up more money the simmering revolt will explode in its face. The Fed Chairman "worries about political resolve" as his main concern. Well, the resolve is gone and so will AIG Holdings before the year is out.

How We Could Let AIG Fail, Sort Of

The bonus issue has stirred up the taxpayer and from now on he cannot be ignored when spending issues come up. The AIG Holding Company is toast and will be in bankruptcy court by year's end and the taxpayers will be then seeking more blood. Someone has to pay for all this trouble - I for one can see the beginnings with the threats on AIG employees, good and bad.

AIG Infographic: Where the Money Went

Gentlemen,
The game is over. The American taxpayer has finally snapped to attention and will have a say in the future of AIG and all the other future financial disasters. Yes, we have passed the tipping point.
Bernake's worst fear are about to be realized, "the loss of political will to see this thing thru". I predict the ground work(telling all the existing counter parties they have lost) is already being laid to have the AIG holding company in bankruptcy proceedings at the end of the year. The "free" taxpayer money will dry up under the wrath of taxpayers incense. This bonus thing they dreamed up has cooked the goose but good.

Why AIG Wasn't Allowed to Fail

Felix,
The same arguments apply to Lehman, but the CDS portfolios were unwound with an insignificant $5 billion loss. Also lots of collateral backed up all these contracts that could take the hit. In the end I think the regulators will step in and say the only valid CDS contracts are those where the buyer holds the bonds. All the others are like commodities futures and other than providing liquidity have no economic value, in other words a casino bet.

The Citigroup Rescue: Exit Financials Under State Capitalism

The obvious pairs trade here is long GLD and long UDN. The US balance sheet is about $64T. Saving it will require more than the $7T already allocated. As the dollar collapses UDN will rise and so will GLD. Things look bleak for our grandchildren.

Financials Continue To Feel the Hurt

I agree. A quiet stealth bear market is depressing the whole sector.

AIG and the Free Lunch Myth

1 of 4 is right, all contracts, that is the side bets, should be cancelled and premiums returned. Bond holders on the other hand need to be paid off if they have lost on their bonds.

Will Insurance Companies Be Part of the Bailout?

Today Loews(L) stock is being slammed because of troubles with its flagship holding CNA Financial Corp. If James Tisch has to inject $1B into CNA, then we had better hunker down for a long financial storm.

The $60 Trillion Nightmare of Credit Default Swaps

I can guarantee you if we get out of this mess, a)margin will be required by all writers, and b)buyers will have to own the the bonds they insure, and c)these contracts will be traded on transparent exchanges. As it started out, if you are a big bank no margin is required, others put up margin as required by the banks. Settling the LEH CDS obligations in a day or two may cause financial chaos, maybe this is why BA is trembling.

Lehman's Lies

If the charges of lies, misrepresentation etc. can be proven these executives will wind up in federal prison with the Enron and WorldComm liars. LEH issued $114 million of debt shortly before declaring bankruptcy so these holders along with a host of other victims will go to court and demand redress. Such fraud cannot be ignored, but the wheels of justice move slowly.

How Banks Hedge Counterparty Risk

Another advantage to a bank is if the bond it holds is insured it can be claimed at a higher tier in list of capital assets. This one reason the debt insurance companies were propped up so long as the walking dead.