So says Robert Bolton, managing director at Mendon Capital Advisors Corp:
“If AIG fails and can’t make good on its obligations, forget it,” Bolton said. “It’s as big a wave as you’re going to see.”
American International Group spent Tuesday on a stomach-churning roller coaster ride. As the insurance titan desperately seeks cash to survive, its stock gyrated wildly with more than a billion shares traded hands. Amidst reports ranging from bankruptcy to a government bailout, the shares plunged more than 70%, recovered to a 2% decline before closing down 21%. It sunk another 40% in after-hours trading amid reports the government is considering conservatorship as one option to save the company.
Uh. Oh. Tomorrow should be pretty interesting. And what’s this here? Oh right, more socialization of the risk/losses of the shareholders:
“I don’t think this country, with all we’ve been through right now, where our economy is, can afford it,” New York Gov. David Paterson told CNN.
Great, just what I need – to own a piece of AIG as well as Fannie/Freddie Mac.