Jump to content

Talk:American International Group

Page contents not supported in other languages.
From Wikipedia, the free encyclopedia

This is an old revision of this page, as edited by 99.163.50.12 (talk) at 03:36, 19 September 2008 (→‎See also Planned economy: how about not). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

initial comment

Glad to see the article building up, but it's very biased toward recent events, and not all of those are being updated. I am an AIG employee, but am editing/commenting on the article entirely on my own free time. Corporations are tricky articles to build on Wikipedia, but a robust Wikipedia should definitely have good entries, right? --66.65.125.108 17:19, 23 December 2006 (UTC)[reply]

Not just a subprime mortgage crisis

The title of this section is misleading. AIG's concerns stem from bad investments and increased collateral demands from Credit Default Swap holders in addition to the bad mortgage backed securities situation. Unlike most other insurance companies, AIG went into the market for credit default swaps, which are contracts that act like insurance by protecting investors against default in a range of assets, including subprime mortgages and corporate bonds. Swap buyers make regular payments to sellers like AIG, who in turn have to make payouts if a default or bankruptcy occurs. As the risk of default on the assets has increased, AIG has had to write-down the value of the protection it sold and post collateral to its counterparties. Further, the need for Fed bailout money stems from the need to hold this collateral cash and the inability to find private loans because of key credit rating reductions. Can someone help me word this right to include the information in the article? —Preceding unsigned comment added by JohnGaltJr (talk • contribs) 03:11, 17 September 2008 (UTC)[reply]

Not wanting to censor

Is accounting fraud a bad name for surplus notes which were issued in the early 1990s? Wasn't the deal true or did it niot reaklly shift risk? Who or which party would have been on the hook at the end if the thing went broke? If it was Genn Re, it's truly insurance, Isn't this the difference between pure debt pure equity and hybrid securioties?

Seems to me only a few of the scandals are reresented here. Although not a scandal, it shuld be noted here how AIG spent $6,000,000 lobbying the US government, money talks. —Preceding unsigned comment added by 24.233.85.48 (talk) 13:35, 22 September 2007 (UTC)[reply]

Marine Terminals Corporation

AIG has recently acquired Marine Terminals Corporation. MTC is a company in the business of managing stevedores and longshoremen at the various ports they have contracted with.

HM —Preceding unsigned comment added by 71.198.139.244 (talk) 21:37, 13 March 2008 (UTC)[reply]

The phrase below doesnt seem to be either grammatically correct or factually correct based on the use of "about 100%." I unfortunately do not know the fact on this matter but hopefully someone with more knowledge can clear this up

"Through various subsidiaries, AIG owns about 100% of 21st Century Insurance Group (see http://finance.yahoo.com/q?s=TW)."

66.226.224.176 (talk) 22:44, 24 March 2008 (UTC) nobesnickr[reply]

AIG vs Lehmann

I read the NYT article more carefully than the preceding editor presumably did.

  1. As i summarized, "... all anyone knows is the *valuing*, while the value and thus overvaluing are unknowable."
  2. "Almost twice" almost certainly doesn't mean "4/7 of the way from the same to twice", and thus misrepresents the numbers, in the absence of information on how the mixes of sub-p and Alt-A compare between the two companies. For Sub-p, 69%/34% = 2.03, with 2.0 significant. For Alt-A, 67%/39% = 1.72, with 1.7 signif. So we need to include a source on the mix before saying what i found in the article.
  3. As to "similar", the reporters may have sound evidence that each type was "similar", but they failed to communicate more than Lehman finding them similar, in saying Lehman said that
    Lehman was valuing similar subprime mortgage securities to those held by A.I.G. [at such-and-such level]
    So we should have had a separate source to say what we said, and not attributed to the Times what Lehman said.
  4. BTW, even if we could quantify how similar, no one knows for sure how to harness degrees of similarity in finding how close in value "similar" securities are.


--Jerzy•t 04:40, 16 September 2008 (UTC)[reply]

  • Well I certainly appreciate your faith in my reading abilities. I phrased it the way I did because it sounds better than the way you wrote it. The New York Times didn't say "Lehman said these are valued similarly" it said "these stocks are valued similarly to what Lehman had." Saying "1.7 to 2.0" looks and reads poorly so "almost twice as much" was substituted since it adequately conveys the point that was being made in the article. We're not writing a textbook on AIG's balance sheet so we don't need to go into a whole lot of details on the specific types of loans that are being affected here, only the major points about why the company is collapsing. The manual of style details what is needed a summary and what isn't. If and when this section is broken out into its own article, then we may begin to split hairs over what loans are being devalued, but for the time being, it looks fine to list them as "mortgage backed securities". Cumulus Clouds (talk) 16:30, 16 September 2008 (UTC)[reply]

Shares in Freddie and Fannie

According to an unnamed source AIG had $550 million to $600 million of preferred shares in the two GSEs[1]. I don't know if we should include mention of this or wait until AIG makes an announcement. __meco (talk) 13:14, 16 September 2008 (UTC)[reply]

AIG Bailout near?

New York Times [2]

CNN [3]

Bloomberg [4]

Reuters [5]

--Jóhann Heiðar Árnason (talk) 00:44, 17 September 2008 (UTC)[reply]

The Fed bails out AIG

http://www.federalreserve.gov/ --Jóhann Heiðar Árnason (talk) 01:28, 17 September 2008 (UTC)[reply]

New York HQ

I think the article should link to their world headquarters in New York, the American International Building in Lower Manhattan. Maybe a pic, maybe not, dunno. I can't think of where to stick in a link. M.Nelson (talk) 01:30, 17 September 2008 (UTC)[reply]

Holdings

Given that the AIG announcement speaks of a sale of certain of its businesses with "the least possible disruption to the overall economy.", it would be useful to expand out the holdings section and categorize it. Edward Vielmetti (talk) 04:07, 17 September 2008 (UTC)[reply]

See Nationalization

Conservatorship vs. Nationalization

I think that the term conservatorship should be avoided as it is unclear and ambiguous. The word nationalization has a clear definition which means ownership taken by the government. Thoughts? Cpeter9 (talk) 14:03, 17 September 2008 (UTC) [reply]

  • No equity transaction has occurred. Issuance of warrants for equity. Not nationalized. Warrants are options for equity--a fee for service. No source has described any conservatorship structure. -- Yellowdesk (talk) 14:18, 17 September 2008 (UTC)[reply]
Maybe "nationalization" is too strong a word, and maybe "conservatorship" is too. But the federal bailerouters are firing the executives, and will have the power to over-ride the board of directors, so, clearly there's more going on here than just a loan. They could have gotten that last week, if they'd had any collateral. What will you call it when those warrants are exercised? They will be. --99.163.50.12 (talk) 21:50, 17 September 2008 (UTC)[reply]
  • See below section. IAG is a weakling at the moment. Any port in a storm. They could have avoided this if they had proper capital reserved for the actual insurance they issued called "CDS" Credit Default Swaps. -- Yellowdesk (talk) 01:01, 18 September 2008 (UTC)[reply]

Loan vs. Nationalization

I also think that we should scrutinize whether the Federal Reserve's action actually constitutes a loan versus nationalization or government ownership. Reports are saying that the Fed now owns 79.9% of AIG. —Preceding unsigned comment added by Cpeter9 (talk • contribs) 14:07, 17 September 2008 (UTC)[reply]

  • The citations state that warrants were issued, not actual equity. No equity transaction has transpired. Therefore no equity/ownership transaction has taken place, merely the option for ownership. Not nationalization. -- Yellowdesk (talk) 14:17, 17 September 2008 (UTC)[reply]
Maybe "nationalization" is too strong a word, and maybe "conservatorship" is too. But the federal bailerouters are firing the executives, and will have the power to over-ride the board of directors, so, clearly there's more going on here than just a loan. They could have gotten that last week, if they'd had any collateral. What will you call it when those warrants are exercised? They will be. --99.163.50.12 (talk) 21:50, 17 September 2008 (UTC)[reply]

lede language and fed bailout language not in agreement

lede states "AIG announced the same day that its board accepted the terms of the Federal Reserve Bank's rescue package, including the issue of equity warrants, and that it is in the best interest of all parties.[5]"

fed bailout section states "AIG's board of directors approved the loan transaction on the same day, without comment about the issuance of warrants amounting to potentially 79.9% of the equity of AIG.[5][2]"

the 2 are not in agreement.

the aig press release referenced by footnote 5 is silent on details of terms...specifically silent on issuance of warrnts."

a better researcher/editor can tackle this one. i'm limited on time at moment. —Preceding unsigned comment added by 68.173.2.68 (talk) 15:03, 17 September 2008 (UTC)[reply]

See also Planned economy

I've tried twice to add this as a "see also" item, only to be twice reverted without substantial rationale. Perhaps someone can advance for me one argument as to why this is inapt? The reasoning all seems quite categorical to me: this was a massive intervention into the economy by the government, using public funds to prop up a private entity, preventing the market from expressing its judgment of AIG and substituting the judgment of the government, insulating AIG from the consequences of its own business decisions, and ultimately assuming a majority equitable stake in the corporation at issue. How can this not indicate some degree of economic planning? Let's review some characteristics of central economic planning. In planned economies, the government frequently intervenes, assumes control of private enterprises, overrides the judgment of consumers, bestows public funds on private entities, etc. This does not seem like a particularly ideological or subjective determination to me. One incident, or even a pattern of them, does not necessarily indicate that the U.S. has a planned economy, but this term is at least relevant enough that the reader might want to be aware of it. That's all a "see also" implies. deranged bulbasaur 10:32, 18 September 2008 (UTC)[reply]

  • Although I did not remove the link, I think that the recent events are an example of an unplanned economy and unplanned intervention.
    Bankruptcy is not a planned event either. There are many kinds of pseudo-bankruptcies, such as conservatorship, and then there's the impression a rescued company has when merging into a not so white knight. That said, I'm sure the board of AIG feels like they are wondering if bankruptcy would be much worse: they lost most of their control to events, lost most of their equity, their CEO, and ability to issue dividends, and probably undisclosed other powers in signing the contract for the credit facility with the Fed.
    See for example:
     • Langley, Monica (2008-09-18). "Bad Bets and Cash Crunch Pushed Ailing AIG to Brink". The Wall Street Journal. Retrieved 2008-09-18. {{cite news}}: Cite has empty unknown parameter: |1= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help)
    Here is an item indicating that the Federal Reserve is not that interested in managing the concern, or participating in owning it, hence another unplanned activity, although authorized by the Bank's its enabling laws.
     • Andrews, Emund L. (2008-09-17). "A New Role for the Fed: Investor of Last Resort". New York Times. Retrieved 2008-09-17. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
    And another indicating that the Fed and AIG haven't settled what has just happened.
     • Davidoff, Steven M. (2008-09-18). "A.I.G.: So Many Questions". New York Times. Retrieved 2008-09-18. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help) (Dealbook column)
    I think you would need to persuade a lot of people it is otherwise (than unplanned) for the link to survive. Given that the government has a secured lending facility, and warrants for 79.9% of the company, there's a speculative likelihood that a number of parts of the company will be broken off and become free standing.
    By the terms of your argument, the existence of the Federal Reserve Bank and the interventions it may take to keep ordinary banks solvent in crisis amounts to a planned economy, which I also think many would differ on.
    -- Yellowdesk (talk) 17:44, 18 September 2008 (UTC)[reply]
  • Your argument seems to consist of removing one word of a two word term that has its own meaning apart from the two constituent words, then arguing against the term based on one word apart from its context. If applied in other situations, this would be clearly ridiculous. It's akin to saying something isn't a jellyfish because you can't spread it on toast. That is not the only absurdity, however, because you then posit a meaning for "planned" that would render it inapplicable to all conceivable economies. Even in the strictest command economies (a stronger term than planned) I hardly expect the powers that be have managed to anticipate the advent of all future events touching the economy in order that they may have a plan for them. Clearly, the plan consists not in a pre-formulated response to events that have not yet occurred, but simply in having some operative design for the economy which can be applied to situations as they arise. The links you give ostensibly in support of your own proposition in fact support the existence of a plan. The federal regulators' own pattern of activity makes that clear enough, unless you're going to seriously suggest that they decide whether or not to intervene at their own caprice and the recent pattern of bailouts is only a chance phenomenon. deranged bulbasaur 03:06, 19 September 2008 (UTC)[reply]

I disagree with the addition of the planned economy I agree that it is an example of an unplanned economy -Tracer9999 (talk) 01:52, 19 September 2008 (UTC)[reply]

How is your own mere assertion more authoritative than the ones you are dismissing? That's all you're making, so, don't WP:POINT. It's rude. --99.163.50.12 (talk) 03:36, 19 September 2008 (UTC)[reply]
Retrieved from "https://en.wikipedia.org/w/index.php?title=Talk:American_International_Group&oldid=239458917"