AIG, unable to sell its two "crown jewel" businesses to anyone for real money, has slapped theoretical values on them and transferred stakes to the Fed in exchange for a reduction in the debit balance they have with the Fed.
In layman's terms: AIG tried to sell their two "prime" businesses, AIA and Alico. They couldn't get the price they wanted, so they sold the businesses to the Fed instead. The Fed is getting $16B worth of AIA preferred shares, and $9B worth of Alico preferred shares, and AIG's balance due to the Fed is being decreased by $25B.
Owning massive stakes in the banks and auto industries wasn't enough for the Government, I guess.
This is especially ironic, because it again focuses on the issue of "temporary impairment" of toxic assets. If you recall, banks claimed that the problem was that their assets were still worth 90c on the dollar but that there was just a temporary lack of liquidity which was causing the market to value the assets at, say, 60c. AIG is doing the same thing: they couldn't actually sell their businesses, because no one wanted to pay them their asking price. So they said "well, they're still worth that much," and dumped them on the Fed.
Sold to you, Sucka... Oops - I meant, Sold to ME, Sucka. Crap.
-KD
In layman's terms: AIG tried to sell their two "prime" businesses, AIA and Alico. They couldn't get the price they wanted, so they sold the businesses to the Fed instead. The Fed is getting $16B worth of AIA preferred shares, and $9B worth of Alico preferred shares, and AIG's balance due to the Fed is being decreased by $25B.
Owning massive stakes in the banks and auto industries wasn't enough for the Government, I guess.
This is especially ironic, because it again focuses on the issue of "temporary impairment" of toxic assets. If you recall, banks claimed that the problem was that their assets were still worth 90c on the dollar but that there was just a temporary lack of liquidity which was causing the market to value the assets at, say, 60c. AIG is doing the same thing: they couldn't actually sell their businesses, because no one wanted to pay them their asking price. So they said "well, they're still worth that much," and dumped them on the Fed.
Sold to you, Sucka... Oops - I meant, Sold to ME, Sucka. Crap.
-KD
1 comment:
Unbelievable. Or, rather, I don't want to believe it!!!
Did you see that AIG sold 1.4 million square feet of office space, you know, the building behind DB on Pine Street downtown? Guess what it sold for: less than $100 a square foot. Talk about impaired assets!
Bernanke might take the fall for this mess. Then they'll put Summer's in charge. And what a TOTAL douche he is, indeed, the ultimate socialist, plays kissy-kiss with Obama & Co., might as well face it he's addicted to power.
Via Mish: "Antlers Shrugged"
Peace.
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