All Posts Tagged With: "AIG"

Washington’s Shrewd Investment

Today the headlines read something like:  Government Stands to Reap $7.5 Billion Profit from Sale of Citi Stock.  This was reported in both the Wall Street Journal and our local rag, the Des Moines Register, and while estimates vary as to the extent of this transaction, the range of the government’s take is somewhere between $7 and $7.5 billion.

There is nothing intrinsically wrong with this.  The federal government bailed out Citigroup in the fall of 2008, and took an ownership interest in the company in exchange for TARP (or is it TRAP?) funds.  The purpose of TARP was to shore up the banking system, and in the process, the economy.  While many of the banks that took TARP money claimed to not need it, …


AIG and the Miracle of Economic Stimulus

Like everyone else in America, I’ve been watching the AIG saga unfold with eager anticipation.  At first, I was in the “too big to fail” camp.  The sheer size of AIG, added to the complexity of its product offerings and coupled with the magnitude of its global positioning, suggested to me that the consequences of allowing AIG to fail far outweighed the risks of government bailout.  So I was in favor of TARP money for AIG.

But a funny thing happened on the way to where we are today.  Companies like AIG and Citigroup have had to learn that partnering with the government isn’t always an ideal solution.  When you go crawling to the government for anything, (or anybody else for that matter), you give …


Warren Buffett: Smarter Than Treasury

In an interview on CNBC television today, Warren Buffett disclosed that he wants to pursue buying some of AIG’s units.  This could reduce the impact of the AIG bailout on taxpayers since Berkshire Hathaway can help shore up some of the weaknesses in AIG as those units are integrated into Buffett’s empire.  According to Reuters:

Buffett said he expressed interest in buying parts of the giant insurer over the Sept. 13-14 weekend, when regulators and financial industry executives were holding emergency talks on problems that included the fate of Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz), which filed for bankruptcy protection on Sept. 15.

Buffett’s current thought is to buy some of these units as they come …


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