If AIG Fails And Can’t Make Good On Its Obligations, Forget It.

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.

Like this article? Please consider subscribing to my full feed RSS. Or, if you would prefer, you can subscribe by Email and have new posts sent directly to your inbox by entering your email address in the box below. Your email will only be used to deliver a daily email and you can unsubscribe at any time.

Comments (5)

Trackback URL | Comments RSS Feed

  1. AIG is a small issue when you consider that the federal government is already the largest casualty insurance company in the country. Bush was in Texas today making all kinds of committments to rebuild Galveston AND pay for housing their residents while it happens. Want a free generator? Call FEMA! It won’t be long before they start handing out debit cards – no questions asked – just like they did in New Orleans. Of course, no real insurance company would be that cavalier with money but the feds are playing with our money and in an election year, money buys votes.

  2. You and I definitely agree here.
    Try reading one of the Libertarian think tanks on “Don’t Bail Them Out.”

  3. david says:

    Interesting Ron…

  4. Yeah, I have some serious Libertarian leanings… 😉

    My take is: Why do we continue to reward bad behavior, poor judgment, and horrendous performance with bailouts, golden parachutes, and billions of taxpayer dollars?

    You know, a couple of billion here, a couple of billion there, after a while you’re talking serious money…

  5. david says:

    Its all printed on worthless paper anyway, so… lol