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AIG bailout doesn’t seem to be working, report says
March 18th, 2009, 1:17 pm · 15 Comments · posted by Teri Sforza, Register staff writer
As American International Group executives are being grilled about paying $165 million in bonuses to the very people who nearly caused a global collapse of the financial system, the federal Government Accountability Office has released a report with this disturbing (though early) conclusion:
This AIG bailout thing doesn’t seem to be working well, and the company may have a great deal of trouble repaying government loans.
Yes, it’s frustrating that We The People own 80 percent of AIG but can’t do much to stop these bonus payments. (After today’s grilling, AIG’s chief says he’ll ask the execs to give back half their bonuses; feel their pain.)
Yes, it’s frustrating that much of the $170 billion in taxpayer dollars funneled to AIG have gone to satisfy collateral calls by other faltering firms, and have done little to nothing to ease the credit crisis.
But the GAO’s sober assessment could be characterized as downright scary. “Although the ongoing federal assistance has prevented further downgrades in AIG’s credit rating, AIG has had mixed success in fulfilling its other restructuring 
plans, such as terminating its securities lending program, selling assets, and unwinding its AIG Financial Products portfolio,” the report says.
“For example, AIG has made efforts at selling certain business units and has begun an overall restructuring, but market and other conditions have prevented significant asset sales, and most restructuring efforts are still under way. AIG faces ongoing challenges from the continued overall economic deterioration and tight credit markets. AIG’s ability to repay its obligations to the federal government has also been impaired by its deteriorating operations, inability to sell its assets and further declines in its assets. All of these issues will continue to adversely impact AIG’s ability to repay its government assistance.”
AIG’s competitors in the insurance business are complaining that the federal assistance has allowed AIG to offer coverage at discounted rates, which don’t adequately reflect the risk involved - and which they can’t compete with.
State insurance regulators and others said AIG’s pricing may be more aggressive than in the past, but they didn’t think the pricing was out of line.
It may take years to determine if premiums charged were adequate for the related losses, the GAO says.
Read The Wall Street Journal’s take on the real AIG outrage. And weep.
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duh
All the Execs names should be published and those who do not give back the bone us’ should be taxed at 200 percent on their check.
I thought bonuses were for good performance and not complete ineptness and destruction of a company?
Of course it’s not working, the same idiots are at the helm of the company? No-brainer
Let them bankrupt
wow it took them this long to report that info….the rest of the country has known this from day one…nice to see the media is actually taking an interest and reporting the facts…..let AIG fall so Americans can start to rebuild sooner than later…………..that’s a no brainer…these execs need to be stoned to death in their middle of the city for the acts they have committed to defraud the public on a continuous basis..then when they are just about out, pull all the policitians and stone (with rocks, not their white powder) them..now, that’s a good beginning, like they used to do in the old days….too bad we don’t have the local call girl to prance around like Marie Antoniette…
jimmy - democrats knew about, in fact Dodd approved these bonuses back in December. the idiots are in congress and the white house.
Yuh Think?
Let them go under. Publish the names and images of the folks who were in charge, so the folks that lost big, can go collect in their own special way. That should be incentive for the next company to keep things ethical or face the consequences since the government clearly doesn’t have the ability or the balls to do the job. Right now the only consequences these greedy people are getting is getting richer.
First off, AIG needs to be broken up, as NO company in the US should have such massive control over so much of our finical system PERIOD!
Now that WE (the US tax payer) own this mess called AIG (A-Hole, Idiot, Greed), we need to break them up into five or six different companies. All existing employees need to be re-hired with new contracts, and NO employee bonuses until all existing tax debt is paid in FULL!
Otherwise, I think this company NEED to fail, even if it does screw up our system for a few weeks. We ALL need to learn a lesson, and the fed dishing out billions to idiots, isn’t going to make these jokers on Wall Street any less greedy or smart.
Obama’s treasury secretary knew about these bonuses last January. There is NO WAY Obama did not also know. His shock now rings hollow. Take over, take over, take over. Disolve, disolve, disolve. Mp mpre $$ down this rat hole called AIG.
How sad, these greedy pigs are getting death threats, boo hoo. The American public has been pushed to the brink of disgust. Some poor guy who lost everything is going to go off the deep end at the thought of these idiots getting multi-million dollar bonuses. Sad to say, I predict AIG will be brought down by a sniper attack or a nut with a bomb.
DO NOT LISTEN TO WHAT BARACK OBAMA SAYS, BUT CAREFULLY WATCH WHAT HE DOES !!! (HIS ECONOMIC STIMULUS PACKAGE OF $787 BILLIONS WOULD CREATE AT LEAST 300,000 JOBS FOR ILLEGAL IMMIGRANTS)
Barack Obama is the greatest liar in history (no wonder he is an excellent lawyer!). During his campaign, he told lots of hope in future for America if he was elected, but now he warns Americans of oncoming darker economy and not to put too much hope in his promises. He promises a big plan to reduce budget deficit but, while the nation is in deep depression, his inauguration ceremony was the most costly in history (50 millions) as well as his presidential campaign (600 millions), which was far more than his opponent John McCain’s. He vows to clean up Washington DC, but he failed to first clean up his homestate Illinois, one of the most corrupt state with the scandal of Governor Rod Blagojevich, who greatly helped Obama to win his state senate seat in 1996, 1998, and 2002; not mentioning that many of his cabinet nominees such as Tom Daschle, Tim Geithner, Nancy Killefer, Hilda Solis, and Bill Richardson avoided to pay taxes, hired illegal workers, or involved in corruption charges. Obama asks Congress quickly pass his economic stimulus package of $787 billions, which, with E-verify protection for American workers removed by Democrat-controlled Senate, would create at least 300,000 jobs for illegal immigrants. And his favorite slogan is “Yes, we CAN”, yet he himself CANNOT quit smoking at all !!! (Each year about 1.3 million American smokers quit successfully).
Personally I hope/pray that all AIG execS that got bogus bonuses get their names published ( in the obituaries) if they don’t return the ill begotten gains
The senator that suggested they commit seppuku was RIGHT ON!!!
http://reincorporation.blogspot.com
Throw them into bankruptcy court and let a receiver take them over. That will bust these ludicrous contracts, end any and all bonuses, and force the asset sales that AIG seems so unwilling to do.
Why don’t they want to sell their assets? Because the price is too low. Hmmm… you mean sort of like the price of OUR HOMES???
And finally, indict the AIG clowns that got us here beginning with the CDO/CDS jerks and then up to their accountants/executives who said, on a shareholder conference call in Dec 2007, that their exposure to CDO/CDS was only “$50 million”!
$50 million…$170 BILLION…close enough right?
When I planned my wedding, anywhere form 8-12 months ahead and noticed I was going over budget…I ‘TRIMMED SOME FAT” from my planning. Did you hear that AIG, JP Morgan and all you other companies getting my tax payer money to bail out your poor spending?!! I don’t care if your “parties or jets” had been purchased or planned 1 year ago (which seems to be a “theme” on the excuses); cancel everything! That is the least you can do. It is a huge slap in each and every one of our faces. Washington, I am MAD.