US: GOVT TO 'WIND DOWN' AIG 'IN ORDERLY WAY'

[bigworld]

Source: France24

In a letter to Congress, US Treasury secretary Timothy Geithner said the Treasury was working with the Justice department to liquidate insurer AIG and require the troubled company to pay back the bailout cash it just used for bonuses.


No link yet.

[DireStrike]

1. What the hell does that mean?

They will pay back $160-odd million? Meaningless.

They will give back the whole bailout? They will un-pay the bonuses? Ridiculously unlikely.

[nadinbrzezinski]

4. The IRS will take care of the bonuses

this is cutting your and my losses, period

Oh and it is akin to the bad bank of the 1930s

The bad bank worked, I'm not sure this will not create a panic by tomorrow afternoon

Problem is, choices are anywhere from a hard rock and a hard place

[Demeter]

10. The Pieces of AIG May Be Worth More Than the Whole

(if buyers can be found. There are some sovereign funds that have expressed interest in pieces, I believe).

[Sen. Walter Sobchak]

14. Four letters: ILFC - $50 billion in assets

International Lease Finance Corporation is the worlds largest lessor of commercial aircraft, unfortunately just try finding anybody with $50 billion kicking around to buy ILFC.

[caseymoz]

35. Liquidation means a lot-- and it's a real change in policy

They should have done this in the first place, though. I'm glad Geithner finally realized that. If they follow it up with a court case, they might recover lot of money from AIG recipients. In the ballpark, I'd say it could be $200 billion. That's significant.

[annabanana]

2. liquidate? really?

I suppose that since we own the place we can liquidate it if we want to..

[Pirate Smile]

3. Liddy has a column at Wash Post on what AIG is doing.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/17/AR2009031703019.html?hpid=opinionsbox1

Our Mission at AIG: Repairs, and Repayment

By Edward M. Liddy
Wednesday, March 18, 2009; Page A13

The government rescue of American International Group (AIG) and other financial firms has produced a palpable wave of anger on the part of Americans and a rising public demand for accountability from corporate and government leaders.

The anger is understandable, and I share it. I have been fortunate in more than three decades in business to see firsthand the wealth creation that well-managed American companies bring to their employees and their communities. I have seen the good side of capitalism. But over the past six months, since agreeing to take the reins of AIG and reviewing how it was run in prior years, I have also seen instances of the bad side of capitalism.

Mistakes were made at AIG, and on a scale that few could have imagined possible. The most egregious of those began in 1987, when the company strayed from its core insurance competencies to launch a credit-default-swaps portfolio, which eventually became subject to massive collateral calls that created a liquidity crisis for AIG. Its missteps have exacted a high price, not only for the company and its employees but for the American taxpayer, the federal government's finances and the global economy. These missteps brought AIG to the brink of collapse and to the government for help.

When I answered the call for help and joined AIG in September 2008, one thing quickly became apparent: The company's overall structure is too complex, too unwieldy and too opaque for its component businesses to be well managed as one entity. So the strategy we continue to pursue, in close cooperation with the Federal Reserve and the U.S. Treasury, is to isolate the value in the company's component parts, capture that value to pay back money owed to the government, and allow AIG's healthy insurance companies to continue to prosper for the benefit of policyholders and taxpayers.

What also became clear is that once AIG's relationship with the government and taxpayers changed, our behavior as a company needed to change. So, of our own initiative, we suspended our federal lobbying activities and halted corporate political contributions. We also restricted executive compensation. In all, total 2008 compensation for the top 47 executives is 56 percent lower than their total 2007 compensation. My annual salary is $1. My only stake is my reputation.

[aquart]

21. Balls of bright shiny brass.

[bread_and_roses]

27. I am struck by the term "wealth creation"

The more I think about it, the odder and more telling it seems. What exactly was "created" at AIG other than a lot of paper money that evaporated into the same thin air it was conjured from? Oh, and by the way there, Mr. Liddy? There were damn few of "the community" that shared in any of your mythical "wealth" - whatever that is.

[Pirate Smile]

28. Obama calls it "the illusion of prosperity".

[hatrack]

29. "Mistakes were made" . . . uh huh. Passive voice - what a shocker!

Mistakes were made . . . by someone, but I'm sure it wasn't us!

Fuck you, Liddy, and fuck you, AIG.

[Pirate Smile]

30. You do know that Liddy was brought in after AIG essentially failed and took it over at the

request of the government.

He wasn't in charge of AIG while they were racking up the problems. He is supposed to help clean up the mess.

[skooooo]

5. Amazing.

We are living in amazing times.

[aquart]

22. No. We are living in "interesting times."

May you live in interesting times is an international curse.

[No Elephants]

33. A Chinese curse.

[truthisfreedom]

6. So it's possible there will be bank runs tomorrow?

Everywhere?

[Demeter]

12. No. Why Would You Think That?

AIG isn't a bank, first of all.

[truthisfreedom]

16. Misunderstood post #4. Wasn't sure if AIG was mixed into banking as well as insurance.

[Bolo Boffin]

7. Here's your link, but the story doesn't say what France24 says it says

http://www.france24.com/en/20090318-us-govt-wind-down-aig-orderly-way-

The story they quote doesn't say anything about liquidating AIG. It just says AIG has to pay that cash back as a condition of getting the next $30 billion from the Treasury.

And Geithner's letter is here. The first place I found it on the Google was Fox News, sorry.

http://www.foxnews.com/projects/pdf/geithner_letter.pdf (pdf)

[dipsydoodle]

11. Can't use your link direct : maybe flawed. However.....

I did find this as a result of your link. So ta :

Reuters - U.S. Treasury Secretary Timothy Geithner on Tuesday said taxpayer bailout recipient AIG would be forced to pay the government to compensate taxpayers for $165 million in employee bonuses as a condition for receiving a further $30 billion in government funds.

“We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the retention awards just paid,” Geithner said in a letter to congressional leaders.

He also said the Treasury would deduct $165 million from the already planned $30 billion increase in insurer American International Group’s <AIG.N> federal bailout.

http://www.france24.com/en/20090318-us-govt-wind-down-aig-orderly-way- AND THAT LINK DON'T WORK EITHER !

As may be seen the origin is Reuters. :shrug:

[No Elephants]

32. What a joke.

[natrat]

8. who cares about the bonus cash--what about the billions it's scamming?fuck you geitner you fuck

[wackywaggin]

13. Agreed!!

What is Geitner talking about? Deducting from the next 30 billion, is simply ridiculous and unacceptable.

[Psephos]

15. It's all about closing the barn door after the horses bolted. n/t

[ozone_man]

17. Really!

Talking about millions going for bonuses is a distraction, when it's the $170 billion that's the issue here. Take that money back Giethner.

[Downwinder]

9. If there is no Company, there is no need for retention bonuses. n/n

[No Elephants]

34. Especially for people who have already left.

[lonestarnot]

18. R. Just in case you're right!

[gratuitous]

19. A bankruptcy court could do that quite well

And for significantly less money.

[aquart]

20. Bernanke said that on Sixty Minutes, didn't he?

[Frank Booth]

23. Here's a link:

Geithner Says ‘Wind Down’ of AIG May Accelerate
Treasury Secretary Timothy Geithner told leaders in Congress he will ensure taxpayers aren’t footing the bill for American International Group Inc.’s employee bonuses and indicated the firm’s “wind down” may accelerate.

“We will continue our aggressive efforts to resolve the future status of AIG in a manner that will reduce systemic risks to our financial system while minimizing the loss to taxpayers,” Geithner wrote in a letter today to House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and other top lawmakers.

“We will explore any and all responsible ways to accelerate this wind-down process,” he said, referring to the restructuring that is already taking place at the insurer.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCr02b8ce6B8&refer=home

This basically sounds like nationalization. It sounds like they're going to break it up, and sell off what assets remain.

[w4rma]

24. Very good. It's exactly what needs to be done. (nt)

[bluestateguy]

25. Who is France24?

Is that legit, or some nut website?

[dipsydoodle]

26. It's the French 24/7 news channel

broadcast via cable, satellite and the internet. Their equivalent of the UK's BBC 24 Hour News or Sky News for example. They'd re-reported a Reuters new item which was later reported elsewhere above on Bloomberg.

So no - they're not nut jobs. Fair question though given the content.

[No Elephants]

31. The AIG ship has sailed. What is Congress doing about not letting any other

organization get "too big to fail?" Can we reinstate the merger and acquisition regs that were in place before De-Regulatin' Ronnie started us down this miserable path?