How to lose $61.7 Billion in 92 days
Breakdown of AIG losses, alot of stuff that does make much sense.
One example is $4.4 billion as a result of a credit valuation adjustment: Meaning that since AIG has lost its triple A rating it must pay the insurance (CDS) holders money because the insurance policy (CDS) takes into account the failure to perform of both counterparties.
And FTW is this ... $21 billion in lost tax benefits. How can you have no income and lose more money because you lost tax benefit? And what type of tax benefits was AIG getting that was worth 20 Billion dollars?
http://www.cdn.thestreet.com/story/10467300/1/aigs-top-10-losses-from-ba...
But the good news is that the Euro and yen make the dollar look good
http://articles.moneycentral.msn.com/Investing/JubaksJournal/euro-yen-ma...
The Dollar is not a long term financial investment. You will need to move money out of cash at some point, and continue to make small investment in the S&P, the steak is 50% this year.
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Comments
They released a full list of
They released a full list of who got the money: http://www.cnbc.com/id/29715449
It looks like Goldman got around 13 billion. A few US states got money. European banks seem to have gotten the biggest chunk.
Pay no never mind that Henry
Pay no never mind that Henry Paulson, former Goldman Sachs CEO, was there at the controls.
The American people had unfettered access to credit during the economic runup; all those creditors still want their money.
We're paying out all this money, that we're getting from new lenders, to pay our old lenders to keep our credit rating high so the new lenders will keep lending us money, (isn't that a pyramid scheme).
We could not pay them back, and lose our credit rating as a nation, and then no one will lend us money.
Just keep paying your bills fellow (working) Americans and the system will keep chugging along.
Follow the Money ...
AIG did not loss $60 billion, it just transfered it to others....
AIG sold over $500 billion of toxic credit default swap protection, and the counter-parties of this toxic insurance are major U.S. broker-dealers and banks.
News and banks analysts' reports suggested that Goldman Sachs (nyse: GS - news - people ) got about $25 billion of the government bailout of AIG and that Merrill Lynch was the second largest benefactor of the government largesse. These are educated guesses, as the government is hiding the counter-party benefactors of the AIG bailout. (Maybe Bloomberg should sue the Fed and Treasury again to have them disclose this information.)