AIG burned through 85bl and gets 37.5bl more?

[Tulpen]

Re: AIG burned through 85bl and gets 37.5bl more?

The parties continue, this time the Royal Bank of Scotland:

http://www.dailymail.co.uk/news/arti...taxpayers.html

[tsetsefly]

Re: AIG burned through 85bl and gets 37.5bl more?

If this in fact is true, that is a sobering counterparty loss in less than a month! If the losses were accrued against the likes of Chase, Citi, Wells Fargo, and the like, we've got a serious problem forming. One govt. entity will always be bailing out a corresponding govt. entity! The USA will not be able to keep the dominos from falling if this keeps up.:mad:

This will end in all counterparty banks being nationalized.:mad:

as I understood they get in total 150 billion more?

[Chomsky]

Re: AIG burned through 85bl and gets 37.5bl more?

as I understood they get in total 150 billion more?

No, the AIG bailout was reconfigured and now amounts to $150B total. For now.

[tsetsefly]

Re: AIG burned through 85bl and gets 37.5bl more?

No, the AIG bailout was reconfigured and now amounts to $150B total. For now.

oh, that's CNN for you...

[FRED]

Re: AIG burned through 85bl and gets 37.5bl more?

History will tell us if this proves to be a Social Moment To Remember.

The initial 85bl.

The arrogance in hearings.

The $$$$ self-indulgence.

The gym punchout.

Another 35bl handout.

Luckily class war is in our distant past :rolleyes:

Here's another sequence worth noting. Call it the S&P sovereign bonds debt rating two-step.

Step 1. The warning

S&P puts warning label on Iceland's "A+" rating
Tue Apr 1, 2008 11:08am EDT

NEW YORK, April 1 (Reuters) - Standard & Poor's warned on Tuesday it was reviewing Iceland's "A+" credit rating, citing a lack of clarity on the government's strategy to address external funding pressures mounting on the country's three largest banks.

S&P said it placed the long-term foreign currency sovereign credit rating on CreditWatch with negative implications.

"The CreditWatch placements reflect our lack of information regarding the Icelandic government's official strategy on how to address the country's increasing economic policy issues," S&P sovereign analyst Eileen Zhang said in a statement.

"These issues in large part stem from the pressure on Iceland's external funding, which may lead to direct government support of the Iceland's three largest commercial banks--Glitnir Bank GLB.IC (A-/Watch Neg/A-2), Landsbanki Islands LAIS.IC (not rated), and Kaupthing Bank (KAUP.IC: Quote, Profile, Research, Stock Buzz) (not rated)," the statement said.

Six months later...

Step 2. The Collapse

The Stunning Collapse of Iceland
October 9, 2008, 1:21PM EST

Even after the government's seizure of top banks, Iceland may face bankruptcy, with dire effects for huge Icelandic investments overseas

Home to just 304,000 people, tiny Iceland is emerging as the biggest casualty of the global financial crisis. On Oct. 9, the government took control of the country's largest bank, Kaupthing (KAUP.ST), and halted trading on the Reykjavik stock exchange until Oct. 13. Authorities also used sweeping new emergency powers to hive off most of the domestic assets of the country's second-largest bank, Landsbanki, into a separate entity to be called "New Landsbanki" that will be fully owned by the government.

In a stunning turn of events over the past week, the vast majority of Iceland's once-proud banking sector has been nationalized. The government has taken control of Kaupthing, Landsbanki, and the No. 3 bank, Glitnir. Kaupthing also was forced to take an emergency $702 million loan from Sweden to prop up its Swedish arm, while the Norwegian Banks' Guarantee Fund offered $819 million in liquidity support to the local unit of Glitnir.

And again...

Step 1. The warning

S&P says pressure building on U.S. "AAA" rating
Wed Sep 17, 2008 5:29pm EDT

NEW YORK (Reuters) - Pressure is building on the pristine "AAA" rating of the United States after a federal bailout of American International Group Inc, the chairman of Standard & Poor's sovereign ratings committee said on Wednesday.

The $85 billion bailout of AIG on Tuesday by the U.S. Federal Reserve "has weakened the fiscal profile of the United States," S&P's John Chambers told Reuters in an interview.

"Lack of a pro-active stance could have resulted in further financial stress and put pressure on the U.S. triple-A rating," Chambers said. "There's no God-given gift of a 'AAA' rating, and the U.S. has to earn it like everyone else."

Earlier this month, S&P affirmed the "AAA" sovereign rating of the United States, noting risks to the U.S. credit profile, including the deteriorating credit profiles for most U.S. financial institutions over the past 12 months, S&P said in a September 3 statement.

AIG BAILOUT 'WITHOUT PRECEDENT'

Potential upfront costs to the government of maintaining financial stability could reach 24 percent of gross domestic product in the case of a "deep and prolonged recession," the S&P report said.

On Wednesday, Chambers compared the U.S. rating to a lobster cooking in a pot of cold water.

"The lobster is still in the 'AAA' pot and still moving," Chambers said. "The heat is turning up, but the water is still 'AAA' stable."

Chambers also called the AIG bailout "a signal event without precedent," adding: "This will be case studied for decades to come."

That was the last AIG bailout. Did the water in the pot just get hotter?

Will the US sovereign debt lobster be cooked in six months like Iceland's?