The fed is trading 70 billion in warrants for 80% of the assets in AIG, Then if AIG can liquidate some assets, and pay off the warrants, the warrants disappear. That is how I read it....
It's a bridge loan with 80% of the business as collateral.
Tuesday, September 16, 2008
AIG fed warrents
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7 comments:
Of course everyone is screaming mad about it, but I sort of agree with this. It's not my money, of course :)
How do you feel, being a US tax payer and all?
AIG actually has assets, just didn't have enough time to sell them, correct?
I don't understand the systemic risk, to be honest... I doubt it to be very honest. I want the market to accept the collapse, and realize its not a big deal.
but Yes it's a short term loan, Hell It's 90 billion on 800 billion in assets. That is one hell of a deal.
but as they sell them AIG will go from a Trillion dollar company, to being a 500 billion dollar company.
The Derivitives are 300Billion, and they owe us 100 billion....
AIG used to be a big company. when they fire sell things, it will be much smaller.
Crashes only happen in bull markets. Right? that's what i read.
AIG will be much smaller, but everything else around it won't fall victim (i don't know if there's a danger of that either, just repeating what meredith et al say)
My impression is that crashes only happen when nobody believes it could happen.
that is when you get a crash.
Seems like it's when people can't believe the music stopped.
It's options expiration, and we are going to get a nice reversal. through friday-monday. Barry was suggesting that a more significant reversal was going to happen at the 50% level of the previous bear market.
Even he is begrudging in the idea of a reversal, Cramer isn't calling bottom.
+/- sure we closed below the previous low, but roughly that is a double bottom.
One of our original discussions was, was about this happening in 2 recessions... This is probably the first one, and we will start dealing with the other one in a few months.
I still suggest that with "Global growth" we will be surprised how that will make this recession. "Shallow", and we will be surprised, that Not Decoupling is a good thing.
I..... Umn...
I'm ready to see the cds and cdo market get flushed.
I just want to either roll the dice with them.
I'm sick of "the market" being hostage to these poorly understood markets.
Lots of flushing needs to occur.
What will AIG's collapse mean for other insurers?
My Chubb (CB) stock went up quite a bit yesterday-- is this a market share phenomenon?
AIG is losing business by the minute, to everyone else. When they start selling, they may sell divisions to the other insurers, and yes losing market share
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