tshk1221

How We Could Let AIG Fail, Sort Of

1. The government must lay off all the employees of AIG and replace them with new government employees. Pay for each employee must not be over $30,000 to $50,000 a year with no bonuses, 401(k)s, insurances or any type of fringe benefits whatsoever to save costs (tax payers' money).

2. The government must set insurance sales goals to these new government employees such as generation of $10,000,000 new life insurance policies a month per employee.

3. If any of the employee cannot meet this sales goal, the government must lay off under-performing employees one by one again to save more costs.

4. When there is no employee left other than a security guard, the government must declare itself Chapter 7 bankruptcy for AIG.

5. The politicians will handle the effects, good or bad, by blaming others and pinpointing scapegoats.

Outing AIG's Bonus Babies: What's the Point?

The government must lay off all the employees of AIG including Edward Liddy and have them replaced with new government employees with a pay of $30,000 to $100,000 a year with no bonuses and have them run AIG until the loan gets paid off.

Outing AIG's Bonus Babies: What's the Point?

These government bureaucrats who do not know how insurance industry works in terms of compensation and bonuses are driving the public insane for these little bonuses. How can a for-profit insurance company be operated properly without employees who receive monetary compensations based on sales-driven performances? AIG is not a non-profit government entity which can be operated for a compensation of $50k a year for an employee.

How come these bureaucrats do not rage against the bonuses to be paid to the employees of Fannie Mae? Fannie Fae's historic recklessness in accepting absurd and exotic mortgage loans from banks and churning out below-junk-bond like MBSs played a major role for this mortgage crisis, too. These bonuses for Fannie Mae execs must be stopped immediately, too. In addition, Fannie Mae employees officially belong to the government. Therefore, they just need only $50,000 to $90,000 annual flat pay with no annual performance bonuses. Why do the government employees need those huge bonuses?

Once the government gave Edward Liddy general right to restructure and operate tangled AIG as CEO, the government including the bureaucrats must trust him unconditionally until this mess in AIG is resolved. Edward Liddy is not one of the Wall Street greed-trapped CEOs or incentive-crazy mortgage bankers and lenders. All he wants to do is to finish his job for his honor and duty given by the government for $1 a year.

I just feel so sorry for Edward Liddy who could have been paid more than $5 million a year in a different company as CEO.

It's better for AIG to just declare Chapter 7 bankrutcy. Edward Liddy needs rest home.

AIG Bonus Imbroglio: $165 Million vs. $165 Billion

We all now know what happened with AIG and the numerous financial institutions including the State of California thanks to Edward Liddy's brave statement telling us all the details of the use of the $165 billion tax payers' money.

Instead of lashing out at AIG, we have to think of good solutions to help AIG stand up again since our billions of dollars at stake now, and AIG must pay back the money to us. Since getting on board of AIG as CEO right after this crisis, Edward Liddy has been showing us the strongest tenacity, courage and commitment to restructure this complex company into a smaller but nimbler insurance company, trying all of his best and ideas to sell other AIG units in the midst of this historic credit-cruched market. News say AIG generated about 45 billion dollars from asset sales and is ready to pay down the bail-out loan by that much. We have to applaud Edward Liddy for these tremendous jobs done to finish his responsibilities given as CEO. I've never seen this strong tenacity and commitment to his or her responsibilities in any other CEOs.

For $1 compensation a year, Edward Liddy must be struggling by himself every day and ever hour to restructure and get this company stand up again and pay the loan back to the government and go home to take a real rest. He graduated from a catholic university. He must be praying every night to God to give him the courage to finish this daunting task given to him in the midst of criticisms being poured on AIG. Instead of bashing out at him and AIG, we have to at least pray together for him to finish his job good, real good so that he can go home and take a real good rest and so that we get our tax money back.

Rage at the AIG Machine

The government must choose a softer approach when dealing with AIG. The government and the public should not drive this time-bomb like company into a corner to explode. If it explodes, we can't get our tax money back. The fact that even the State of California got the bail-out money through AIG signifies that the whole thing entangling AIG and world's financial institutions is a matter of problem solving, not the matter of criticizing. We must calm ourselves and must be cooled down.

The single most important thing we have to think of is how we are going to get our billions of dollars of tax money back from AIG, not the bonuses paid already. If we can get the billions of dollars back from AIG, it wouldn't be a big deal to get the bonuses back. Reduction of future bonuses will do. We must help AIG stand up again as one of the economic engines of the US to get our tax money back. If not, we will just end up with pennies for billions of dollars poured in.

AIG Giftwraps $450M

If bonuses are not paid as agreed or promised, key employees of AIG will leave for competitors and companies. And, there will be no employee left to work for AIG. If this ever happens, it will make it harder for AIG to do its business on a normal basis and, therefore, harder to pay back our taxpayers' money. I can understand the public fury if Edward Liddy, the CEO who is working in AIG for only $1 a year as compensation, got any part of these bonuses. I'm sure he did not get a penny of these bonuses.

It will make sense if the government reaches a deal with AIG to reduce future compensations or bonuses for the AIG employees. However, if the government tries to take away bonuses that were paid already, I can't help but think that the US government under Obama's leadership is turning into dictatorship that no one had ever imagined. Forciful take-away of the bonuses must never be done by the government. If this happens, the only resort for AIG to rely on is calling for bankrupcy, and US taxpayers and the government will just end up with nothing but pennies.

Great Depression Not Imminent, But Inevitable

Reduction in the size of the risk insurance businesses will not erode credit quality. Credit quality will actually improve since the protection from risk insurance is gone or less. One of the reasons for the widespread rampant, irresponsible and reckless consumer lending, especially mortgage in the US for the last 5 years was due to this unquantifiable protection from risk insurance. Credit quality will definitely improve, and credit quantity will decrease or erode due to less risk insurance businesses.

AIG: An Attractive Buy, If...

Dear president_war_pig

There is a huge misunderstanding of the investment vehicle opted by the government for AIG.

Let's not forget about the fact that the goverment aid was a loan. It was not common stock or preferred stock. A loan was extended to AIG (=> borrower) by the goverment (=> lender). As of today, the government has no preferred stocks outstanding with AIG even though the loan money is outstanding. More correctly, it is preferred convertible bond, not convertible preferred stock. It is a loan to be converted into preferred stocks that guarantee 79.9% ownership IF AIG cannot pay off the loan. Paying off the loan or not is the trigger for issuance of the preferred stocks with 79.9% ownership. Right now, the government does not have any ownership of AIG since it is a loan. The goverment is just a lien holder as lender, and AIG is a borrower who is paying 11% annual interests to the lender. I hope it makes better sense to you.


On Oct 15 07:36 AM president_wa r_pig wrote:

> There's also no guarantee that even if the AIG as a business survives,
> the holding company in which common shareholders own equity will.
> AIGs insurance operations could be reorganized into a new, separate,
> debt-free entity, leaving existing common shares worthless.
>
> It's happened before. Look into the demise of Penncorp Financial
> a few years back. All the insurance subsidiaries survived in tact,
> but PFG, the holding company, was gutted. There was not a thing common
> shareholders could do.
>
> Note that the government made a point of buying equity in AIG through
> **preferred shares,** not common shares.

How the U.S. Saved Europe's Banking System

Dear Linguistics,

Thanks for the advise. But, that was the easiest and best way I could understand the whole situation happening in the US financial system.


On Sep 30 06:39 PM Linguistics wrote:

> tshk1221 I hope you are a bit more eloquent in your day-to-day interactions.

How the U.S. Saved Europe's Banking System

Dear gman 310,

We did not detroy it. It is the greatest diarrhea in US history from rotten yolk which were created by the cost-overstated MBS and the freakiest financing derivative known as CDS. This diarrhea spreaded like crazy to those fallen banks and investment banks including AIG. If the financial system gets re-filled with fresh cash and gold (yellow yolk) by US citizens while Uncle Sam is using $700 billion Diarrhea (Dollar) Pan (Plan) to receive and hold the greatest diarrhea in US history, our system will get back on its feet soon, very soon. We need to put in our cash and gold into US stock market now before our Uncle Sam falls. Uncle Sam has its limit. Compare US stock market's current problem to the structure of egg.

On Sep 30 04:34 PM gman310 wrote:

> We saved it after we destroyed it. Kind of like Iraq.

3 Things America Needs to Do to Get the Economy Back on Track

Dear Everyone here..

Dear US citizens

Do not run away from this FEAR of LOSS from yesterday's historical drop of Dow in a single day in US history. Shortly, you guys will experience the biggest gain in US history If you guys overcome the FEAR of LOSS like the Oracle did, buy the long-surviving Down Jones jewels now and hold them for your life, we can achieve our dream in 30 to 50 years. BUY AMERICA NOW. OWN YOUR AMERICA NOW. Pumping our own cash into our system is the only solution to fix our problem - Regaining self-confidence in ourselves. This problem happened because we lost confidence in ourselves and our strongest system. GOD will help America stand up again in less than 2 - 3 years. BUY AMERICA NOW. OWN YOUR AMERICA NOW before the super rich gobble up all these low-priced jewels of Dow.


On Sep 30 01:38 PM tshk1221 wrote:

> Dear sdcougar:
>
> Three things America should do to fix this situation are:
>
> 1. Cowards holding gold in their home should invest in stocks now.
>
> 2. Cowards holding cash in bank CDs should invest in stocks now.
>
> 3. BUY AMERICA now with $500, $1,000 and $2,000.
>
> If US citizens do not have confidence in the strongest financial
> system in the world, who the heck in the world would have confidence
> in our system? If you do not have confidence in yourself, who the
> heck will have confidence in you? We, as US citizens, must have confidence
> in our system first by BUY AMERICA NOW. Only after this self-confidence
> will come back the world's confidence in us!

3 Things America Needs to Do to Get the Economy Back on Track

Dear sdcougar:

Three things America should do to fix this situation are:

1. Cowards holding gold in their home should invest in stocks now.
2. Cowards holding cash in bank CDs should invest in stocks now.
3. BUY AMERICA now with $500, $1,000 and $2,000.

If US citizens do not have confidence in the strongest financial system in the world, who the heck in the world would have confidence in our system? If you do not have confidence in yourself, who the heck will have confidence in you? We, as US citizens, must have confidence in our system first by BUY AMERICA NOW. Only after this self-confidence will come back the world's confidence in us!


On Sep 30 09:46 AM sdcougar wrote:

> "America needs to curb its oil imports by encouraging automakers
> and consumers to make and buy radically more fuel efficient vehicles."
>
>
> Yes, BUT you need the WHOLE PACKAGE here...INCLUDING drilling at
> home, and an alternative energy push.
>
> But speaking of fuel efficient cars, Ford has a great one they sell
> in Europe (and maybe others too) BUT THEY CANNOT SELL IT HERE because
> of fed. regulations!

Is AIG a Buy Following the Government Bailout?

James Kar is absolutely correct. I did my first stock investment through AIG a few days ago due to the following reasoning:

1. Mr. Greenspan said this financial crisis is the one that wouldn't come in 100 years. If you reverse it, it means the greatest investment opportunity has come in US history. Right beside the greatest fear sits the greatest hope. In the recent market turmoil, the only private sector company that's got hit the most but dramatically saved by the US government is AIG. I've never seen a private-sector company being saved at this grand scale. As you all know, this is the first case of saving an insurance-related company by the US government. Probably, that's why I'm riding and enjoying this turmoil even if I'm a newbie in stock investment.

2. AIG is way too big and too influential to let it fall. You can see the difference of US government's attitude from Lehman and AIG. If AIG fails, even Boeing will be hit hard, and the ripple effect will spread like crazy to other areas. The media will definitely act a huge role in spreading this ripple effects.

3. Primary purpose of the 2-year maturity commercial line of credit is to help the giant walk and run again, not to liquidate the business assets and wipe out the shareholder value. The line is not to control and kill the giant. Rather, its purpose is to preserve the shareholder value of the giant and to stabilize this unseen, crazy market in US history.

4. The US government absolutely has no interest or intention of owing the giant. Not a single penny of the giant. Nationalization? What a great non-sense it is! As soon as the outstanding principal balance of the commercial line of credit including accrued interests and late charges, if any, gets paid as agreed in two years, the US government will say, "You are ready. Go ahead and walk alone now, giant!" The media which has no idea as to how commercial line of credit works is creating this unnecessary commotion all over the US, saying things like, "if the line is not paid off in 2 years, US government will seize control of AIG and wipe out shareholder values". This type of non-sense is driving people and investors into more panic and fear of loss, driving down the stock prices of strong US companies more and more. I wonder if the media including some of the opinion writers of this web site knows how commercial line works. I know the terms and conditions of the bailout loan must have their own peculiar provisions specifically tailored for this peculiar situation, but in general, they will also follow general lending practices of US because it is a commercial line of credit extended by bank. If the situation of AIG or the overall market does not improve, AIG has the right, as borrower, to request extension of maturity of the line by additional one or two years .Even if the line cannot be paid off by the additional maturity, AIG has the right, as borrower, to request to term out the line balance into 5 years, 7 years or even 10 years so that monthy principal and interest can be paid until the loan gets paid off. This dramatic event will not happen in 100 years. Why term-out of the line balance into a 10-year maturity loan be unthinkable in this type of market meltdown that the Oracle compared to the breakout of WWII?

5. The new CEO, Edward Liddy, as you all know, will restructure the giant. He has the extensive and professional knowledge and experience through Sears and its spinoff back in 1990s. I reviewed AIG's corporate structure. I've never seen that type of messy structure. If the new CEO establishes transparency through simplification of all those holding and business units which include weird and absurd skii resort investment, real state investments all over the world, sports sponsorship and other non-sense investment units I don't have knowledge of, AIG will walk and run again in less than 2 years. It appears that the US government wants to see a new AIG that focuses and concentrates on one primary business field, whether it is insurance or airplane leasing business, to survive and thrive.

Let's see if AIG becomes a total loss in two to five years just like all media is saying.