AIG failure would still be disastrous for global mkts - Mercedes-Benz Forum

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post #1 of 3 (permalink) Old 03-01-2009, 07:00 PM Thread Starter
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AIG failure would still be disastrous for global mkts

as if the global mkts are still alive and kicking.

AIG failure would still be disastrous for global mkts | Reuters

AIG's board on Sunday approved a broad revision of the U.S. government's $150 billion rescue. It was the third time the government has reached out to the struggling insurer and the latest rescue is expected to put greater funds at AIG's disposal to keep it afloat as it readies to report a roughly $60 billion loss early on Monday.
AIG, through a financial products unit, sold more than $450 billion of protection on securities to U.S. and European banks. With government support, some of those derivatives have been unwound, but the company still has about $300 billion of this exposure, according to Credit Sights.

Haines said that European banks in particular, counterparties on many of AIG's outstanding derivative contracts, "would be hammered if the U.S. walked away."

Donn Vickrey, an analyst with Gradient Analytics, who has closely followed the financial deterioration at AIG said while "European banks are about two-third of the problem ... it would be a domino effect across the globe.
"If AIG is allowed to fail -- many banks holding CDS paper from AIG could also fail," said Mark Keenan, insurance partner at law firm Anderson Kill & Olick. "In other words, I don't think the U.S. government can afford to allow AIG to fail -- no matter how many bandaids may be needed," he added.
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post #2 of 3 (permalink) Old 03-01-2009, 07:09 PM
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AIG failure would be disastrous for...............AIG. But they love to sell the drama. Ultimately I think the brightest light is going to come from this bridge being burned. Torch that mutha

"Truth passes through three stages. First, it is ridiculed. Second, it is violently opposed, and third, it is accepted as self evident"-Arthur Schopenhauer
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post #3 of 3 (permalink) Old 03-01-2009, 07:12 PM
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