Loan Shark

Why Would Treasury Cut AIG's Interest Payment?

Taking 80% of a publicly traded company without shareholder approval is illegal in the State of Delaware where AIG is Incorporated. There are at least 2 lawsuits that have just been fast tracked by Delaware Judges to deal with the issue. The entire AIG deal was a backroom GS deal because GS had the largest counterparty risk to AIG. AIG would have been better off going into BK..that would have given them time and protected them from the collateral calls.. But that could not be allowed since it would have crippled the global financial services system ..so a deal was agreed to.....but lets be honest the terms have changed at least 2 times since it was originally anounced so why not a 3rd time and make it fair.

The people really being hurt by the loss in share value of AIG are not the Wall Street fat cats...they made their money when the deals where being done...it is the poor average joes that had AIG in their 401k plan or their pension plan... the State of NY pension plan lost roughly $1.2 BILLION ... why should the deal with AIG be any different than that with the bank. AIG issue was a liquidity problem...if they would have been allowed to go to the Fed window they could have just borrowed the money that way. The original deal will not stand up in a court of law nor will does it pass the smell test of fairness....