AIG Bailed Out Again

As reported by Bloomberg - "AIG Gets Expanded Bailout, Posts $24.5 Billion Loss":

American International Group Inc. (AIG), the insurer bailed out by the U.S., got an expanded government rescue package valued at more than $150 billion after recording a fourth straight quarterly loss.

The U.S. will reduce the original $85 billion loan that saved AIG in September to $60 billion, buy $40 billion of preferred shares, and purchase $52.5 billion of mortgage securities owned or backed by the company, the Federal Reserve said today. The insurer lost a record $24.5 billion, or $9.05 a share, in the third quarter, compared with profit of $3.09 billion, or $1.19, a year earlier, AIG said in a statement.

No surprise, taxpayers will pick up the tab yet again:

Taxpayers will take on more risk to give Chief Executive Officer Edward Liddy time to salvage AIG, which needed U.S. help to escape bankruptcy in September after at least $40 billion in quarterly losses tied to home mortgages. Liddy's plan to repay the original loan by selling units stalled as plunging financial markets cut into their value and forced potential buyers to shore up their own balance sheets.

The hope behind the new package:

"This gives AIG much more breathing room," said Robert Haines, an analyst at CreditSights Inc. "Now they have the time and flexibility to sell assets for closer to their intrinsic value rather than fire-sale prices." The news is a "big positive" for bondholders, he said. The insurer gained 23 percent to $2.59 at 7:31 a.m. in early New York trading.

Could this actually be true? Executive bonuses curtailed?

The U.S. required a freeze on the bonus pool for 70 top AIG executives and imposed limits on severance benefits, the Treasury said in a statement.

Business as usual continues this Monday morning. More massive corporate failures and government bailouts.

While Corporate America parties at the Ritz, lays off the worker bees, and pays executives top bonuses for bankrupting their companies, the taxpayers get the honorable opportunity to pick up the tab.

Just to think how many people in our past presidential election were fearing the future notion of the "redistribution of wealth". Fear the future yet ignore the reality of what they fear. Anyone else confused?