AIG Fights to Buy Back Its Own Crap Assets, NY Fed Isn't Having Any of That




Poor AIG, anyone else crying a river for them? This is what happens when you need the government and the Bernanke Mafia to come save you. I find it hilarious that AIG's Benmosche believes he is the one in charge of the company when, in fact, the government/Bernanke Mafia are majority owners.

Via DealBook:

The Federal Reserve Bank of New York’s rejection of the American International Group’s offer to buy back $15.7 billion worth of mortgage securities poses a big problem for the insurer, the company’s chief executive said on Wednesday.

Instead of selling the entire Maiden Lane II portfolio of securities back to A.I.G., the New York Fed instead has chosen to sell off pieces over time, potentially opening up the sales process to other bidders.

But Robert H. Benmosche, A.I.G.’s chief executive, argues that it could potentially weaken the insurer’s financial position.

“It’s a huge problem for us,” he told DealBook in a telephone interview.

The decision, he said, also took him by surprise. Mr. Benmosche said he was notified of the New York Fed’s plan only by a phone call at 4 p.m. on Wednesday.

Here's the obvious issue, the New York Fed needs to make the most it can off this deal lest they be accused of squandering taxpayer money. I'm not sure when we hired them to manage our tax portfolio but we'll save that discussion for another day.

Says Bloomberg:

Credit Suisse Group AG (CSGN), Barclays Plc (BARC) and Morgan Stanley are each seeking groups of investors to counter American International Group Inc. (AIG)’s $15.7 billion bid for a pool of mortgage bonds held by the Federal Reserve Bank of New York, people with knowledge of the discussions said.

The dealers are among bond brokers gauging whether they can assemble bids from customers that would beat AIG’s offer if the Fed decides to sell the assets, according to the people, who declined to be identified because the talks are private. Banks have told clients that the New York Fed, which hired BlackRock Inc. (BLK) to manage the portfolio, probably isn’t ready for bids or to decide on the sales process, the people said.

AIG, which is 92 percent-owned by the U.S. government, made public on March 10 its offer for the assets, which the insurer turned over to a Fed fund in 2008. AIG said its proposal would benefit taxpayers by boosting investment returns at the company as it seeks to attract private capital to replace government funds. The New York Fed said March 11 it’s seeking a solution that “maximizes the proceeds to the taxpayer.”

Maybe NY Fed should just hang onto this crap a little bit longer, that way when the wheels fall off this thing, they'll be the ones left holding the bag. They were all too happy to unload most of AIG on the Treasury, makes one wonder what sort of sentimental attachment they have to these damn bonds. What gives? When AIG was failing no one wanted this shit, now look at them fighting to get a piece!

This money laundering shit is complicated!

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.

12 comments:

Anonymous said...

If you think they are trying to do their best for the country, you'd say "the assets can be sold for more money in pieces and at separate auctions". If you have the tin foil hat cranked up tight, you think "these guys already 'pre-sold' some of this stuff to some buddies at special prices". I think it would get bad press if AIG were allowed to buy the same crap back at prices that more accurately reflected the true value (or less than true value) of the crap WHEN the crap was originated. Even crap has SOME value - you fertilize flowers and crops with crap, right? Wonder what Wilbur Ross has been up to...

In fewer words: jerking off with your left hand is still jerking off.

Anonymous said...

Since AIG is mostly owned by Uncle Sam (92%), for AIG to buy the assets from the NY Fed would be sort of like having a left handed circle jerk with your second cousin.

Anonymous said...

a sordid and incestuous homo affair...

Anonymous said...

"Both AIG and the Fed declined to comment. The U.S. Treasury, which owns 92 percent of AIG, also declined to comment. BlackRock declined to comment"

boy, it's a good thing for them that they don't have a Chatty Patty like me working for them...I've got comments coming out the whazooo!!!!"

Anonymous said...

no comment

Anonymous said...

"If the price goes up to 16 (billion dollars), 16.2, 16.3, 16.4, what it will tell the world is the Fed has opened up the process. By its very nature, there are few who could bid that kind of money," the source said.

Few who could bid that kind of money - This statement just leaps off the page, er...screen at me.

elf2006real said...

Why would anyone want to buy them, unless they think they'll be able to unload them on the taxpayers at a profit?

That's a rhetorical question, of course.

Anonymous said...

So, I'm in the St. Louis Bread Co. last night getting the $2 off special on the "You Pick Two" and reading a free WSJ. At the end of the day, they don't care if skinflints like me come in and read one of their leftovers for free - I'm a thrifty motherfucker if I'm anything. I still have clothing from the Clinton Administration. Don't make fun - it's perfectly fine AND paid for... The AIG bid was 53 cents on the dollar. What I could not find in the article was what was paid for them when AIG was strapped for cash. Were they paid face value? Was it something less? I'm gonna have to find that and see what AIG was paid when they had to unload it three short years ago...America is not ending - it's just repricing.

Anonymous said...

while we're on the subject of engaging in circle jerking with our second cousins I'm competing with these assholes for car paper - directly...day to day...hand to ummm, hand...little ole me in a non-profit against the big swinging dicks of Ally Financial. Question of the day - Am I at a DISADVANTAGE given that they are Uncle Sam's Buy Here Pay Here cluster of finance lackeys or do I have the ADVANTAGE?

Anonymous said...

this is beyond my competency and attention span I'd have to take the entire bottle of Ritalin to make it through this and even then, I probably couldn't make sense of it. But, it looks like a SHIT load of money was floated toward AIG when their titty was in a wringer and NOW they want to offer 53 cents on the dollar? AND whine when their offer is declined 'cause the NY Fed thinks it can do better? Sheesh....I mean c'mon AIG and open up wallet.....if you're gonna get laid AND blown BY BLONDE TWINS from SWEDEN, it will usually cost you some kind of decent money.....you cheap fuck, you.

Anonymous said...

well, they got something north of the 53 cents on the dollar that the cheapskates at AIG were willing to pay.....this is no different than a whore with two johns competing for the same glory hole. They went with the high bidder.