AIG (NYSE: AIG) seems to be shifting money from one bucket to the other. The net effect is that it owes the government a huge sum, which is not dropping.
According to Reuters, "American International Group Inc says it has completed completed a $40 billion preferred stock sale to the U.S. Department of Treasury under TARP".
That money will only go to repay the money it owes to the Federal Reserve. At the end of the day, AIG has done nothing to help its own cause or the taxpayer's.
Now that Citigroup (NYSE: C) has access to Treasury money to the tune of a $25 billion initial investment and $27 more it got earlier this week, it raises the question of what it will do with any preferred shares it can sell using TARP backing. The answer is probably that it will be recycled back to the Treasury or the Fed because it has borrowed from both agencies.
It is a hell of a way to run a financial system.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
11-28-2008 @ 8:55PM
gerald said...
Sell all AIG stock. This is a BAD FAITH INSURER. I'm suing the hell out of them for bad faith and I'm one of thousands who are owed very large sums of money and have not been paid becuase of this theiving lying piece of Sh"t company. If you have insurance from them and don't cancel it then you are an idiot or don't care about getting paid when you have to file a claim!