There will be a new deal between the government and AIG announced tomorrow as reported in the NYT
The federal government is preparing to loosen the terms of its huge loan to the American International Group and provide another $30 billion to the insurer as it prepares to report the biggest quarterly loss in history on Monday, $62 billion, people involved in the discussions said Sunday night.
This is really staggering. I thought I was getting hardened to the huge dollar figures being thrown around with the various bailouts, but AIG is an endless black hole. From what I can figure out it is probably ground zero for the flaky toxic credit assets. Most of the schemes for them originated with AIG's Special Products Group.
The intervention marks the fourth time that A.I.G., the giant insurer, has had to seek assistance from the federal government. The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets.
The deal would have the government commit another $30 billion in cash to A.I.G. from the Troubled Assets Relief Fund, should the company need it, according to the people involved in the talks.
So for all practical purposes, we the taxpayers are now the proud owners of the American International Group of collected insurance companies and financial scams. What the hell are we going to do with it? Is this more a matter of just trying to keep things afloat and hope that an angel descends on a pillar of cloud to rescue us all from the horrible mess? Does Tiny Tim Geithner have a clever plan for how he is going to put together the pieces of the world's most expensive erector set?
I have a sinking feeling that he does not.