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 Yes, that's right. American International Group Inc.'s stock has sunk down to a dollar, and investors are fearing that the insurer might need another government bailout (more than the $150 billion it has already received) or a government backstop (similar to what the government offered to Citigroup Inc.) in order to survive. When CEO Edward Liddy says there is no need for a fire sale of assets, few people believe him, least of all former AIG chairman and CEO Hank Greenberg. The CEO of C.V. Starr, Greenberg said in an interview with CNBC that AIG "is more than a troubled company" and has "lost its way."
Greenberg believes it is time to, "rebuild AIG" rather than continuing Liddy's plan to divest assets, which has ground to a halt because of decreasing valuations and a general lack of financing thanks to the recession and credit crisis. But rebuild it into what? And how? Liddy's plan to sell assets is in part to repay the government loans. So long as the loans exist, rebuilding AIG seems unlikely. Granted, you can't blame Greenberg's remorse at watching the insurer's collapse. Greenberg built and ran the the company into a major insurer from 1962 until 2005, when AIG's board forced Greenberg to resign following accusations of fraud by then-New York Attorney General Eliot Spitzer. Now, Greenberg seems intent on returning to AIG and talking to anyone willing to listen to his plans. Despite Greenberg's criticism of Liddy's plan, AIG has been successful selling some assets. In fact, the insurer has already sold around $2 billion in, assets according to reports. Here's the latest roundup of AIG's announced sales:
There are also rumors that AIG might take some the the units public in order to pay off Uncle Sam. - Maria Woehr CategoriesComments
From: Fact Check,
Your paragraph that begins, "AIG sent the investment management unit's books out to a number of interested buyers near the end of last month. This is the same unit that could have led to AIG's demise, according to The Wall Street Journal," is mis-leading. The fact is that this unit DID NOT lead to the problems that brought down AIG.
Posted on:
February 6, 2009 2:59 PM
From: Anthony O'Neil,
Hank Greenberg successfully built AIG into a financial powerhouse over many decades. Then, without due process, a reckless Spitzer pressured the AIG board to force Greenberg out over possible "footfaults" in 2005. Forbes columnist Robert Lenzner wrote in late 2008 that AIG’s Credit Default Swaps "were hedged until former Chairman Hank Greenberg was ousted from his post in April 2005. Sources close to Greenberg claim AIG held very little subprime paper, if any, before April 2005.” In addition, Lenzer commented that AIG waded “deeply into subprime mortgages” only after Greenberg’s departure. Putting these factors together, it is no wonder that Spitzer is on the defensive about his role in Greenberg's departure. Taxpayers and AIG shareholders were harmed and should send Spitzer the entire bill for the AIG bailout because Spitzer set in motion the near collapse of an institution that was healthy and far better controlled under Greenberg's watch. While Spitzer was busy advancing his career, AIG and its shareholders suffered enormously from his regulatory recklessness.
Posted on:
February 6, 2009 3:49 PM
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The bigger they fall. 21st Century Ins., an upstart as 20th Century Ins. less than 20 years ago has bought off the automobile insurance assets from AIG - including my policy. Who said bigger is better?