Well, as we have all read in the news and watched on TV, AIG in the wake of reporting a $60 Billion loss for the quarter has now reworked the terms of their deal with the US Government to modify the loan terms, reduce the interest payments and exchange debt for equity, all in return for another $30 billion in cash.
My question is, and I know i'm not alone, is who do the guys at AIG have compromising pictures of at the AIG/Capitol Hill Christmas party?
As reported in both the NY Times, Wall Street Journal and other outlets, this deal is starting to stink worse then week old garbage in the sunshine as this once proud privately held company has been transformed into something we might expect to see in 1970's socialist France.
What makes this really stink is the veil of secrecy around the alleged third party guarantees that are at the heart of the bail out as no one really knows who is being protected by this bailout and blank check by the Fed's. Who exactly is being protected here?
Today the PR spin started to discuss how saving AIG was essential to the 100,000 policy holders in the life companies which is an absolute crock given that the single most secure group of policy holders ARE the life companies precisely because they are regulated by the states and are required to reserve appropriately. What has happened to the company, it's employees and partners in business is disgusting and it is now escalating in a never ending spiral of ass covering by the regulators, treasury hacks and politicos who panicked back in October and imposed a huge, unworkable loan on AIG in a bid to keep Lehman Brothers and other companies that utilized AIG financial guarantee products from collapsing.
We now have the amount loaned to AIG increasing to such a huge level that they have reached " to big to fail" status and the taxpayers now effectively own AIG's most valuable assets. Welcome to 1970's France where the pressures of politics, union's and a population unwilling to pay the price necessary to cleanse out sick companies created an economic malaise that France has never really recovered from.
The cost to AIG policy holders and annuity contract owners will now be another few months of scary headlines about how this "had to be done" to protect policy holders and contracts. What a bunch of bull. This is all about protecting the political entities that made this lousy deal and nationalized a once private enterprise. As i've said before, if you want to see the true cost of the 20 year battle of the tort reform wars, we are looking at it as this once massive force behind tort reform lobbying and political campaign funding calls in it's chips over and over again with legislators and regulators who have benefited for years from the tort reform lobby that AIG was a key player in.
Policy holders and annuity owners shouldn't be afraid, but stockholders, bond-holders and now the US Taxpayer certainly should be.