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AIG (NYE: AIG) was the most respected insurance firm in the world when it was run by Hank Greenberg. But he is gone, along with the respect.
AIG managed to lose $7.8 billion in the last quarter, an impressive amount even by the standards of current bank and brokerage deficits. According to The Wall Street Journal, "The giant insurer also announced that it would raise $12.5 billion in capital to replenish its balance sheet."
Of course, the reason for the losses was, among other things, investment in instruments based on mortgages.
One odd piece of news that came out of the awful quarter from the insurance firm was that it would raise its dividend. It is hard to imagine where that cash will come from.
The smoke signal sent up by AIG is that the crisis involving US financial firms is not over. AIG did not say that the future was bright and the sun was coming out from behind dark clouds. Pessimism was the emotion of the day.
Watch for more big losses from banks and brokerage in the second quarter. AIG is a canary in a coal mine.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
5-09-2008 @ 5:01AM
Vincent T. Oliver said...
AIG INSURED MY 2 STORY AFTER THEY TOOK OVER FROM COLONIAL PENN & GE THAT HAD MY RESIDENCE APPRAISED FOR AND INSURED FOR
ALMOST 1/2 MILLION DOLLARS WHICH INCLUDED
LOSS OF BUILDING, CONTENTS & LOSS OF USE.
THERE WAS A CHIMNEY FIRE AND THE BUILDING INSPECTOR CONDEMED THE BUILDING. AIG IS NOT
TO BE TRUSTED. THEY OFFERED ME $25,000. TO SETTLE OUT OF COURT WHICH I REFUSED. SINCE I AM AN 85 YEAR OLD WORLD WAR II VETERAN THEY ARE HOPING I DIE SO THEY WILL NOT HAVE
TO PAY ME.
MY LAWYER GLENN KROLL OF 92 MAIN STREET,
BLOOMINGBURG, NY 12721, PHONE (845)
733-1065. OBTAINED A 2 MILLION 400,000 JUDGEMENT AFTER THREE (3) YEARS OF AIG's DELAYING TACTICS
AFTER TAKING EBT'S THE LAWYERS PERSUADED
THE BUILDING INSPECTOR TO REPAIR THE BUILDING SO THEY WOULD NOT HAVE TO PAY
FOR ANOTHER BUILDING.
5-09-2008 @ 10:25AM
anais_morr said...
AIG is one of the most corrupt insurance companies out there. The list can go, on and on in how AIG sets itself up in not protecting its insurers, the people who invest in this company by purchasing insurance policies. This news puts a smile on my face. See...getting rid of that ol' Maurice Greenburg was not the answer. AIG needs to do an entire shake down in how it runs its business and who they continue to keep on its payroll.