AIG Has Already Used Up 3/4 Of $123 Billion Bailiout

It’s only been a month, but AIG has already gone through 75% of its $123 billion government bailout. Those golf trips and sea-side hotels sure add up, don’t they? [Washington Post] (Photo: ChristophrHiestr)

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  1. mizj says:

    Can’t we shut ‘em down? I mean, as taxpayers, we OWN them, don’t we?

    • howie_in_az says:

      @mizj: First, the gubment just loaned AIG the money. Supposedly AIG will pay the money back just like people that bought mortgages will pay that money back and totally not walk away from their obligations.

      Second, from everything I’ve heard about the bailouts and such, the gubment would own a non-voting share of the company. Even if they wanted to they couldn’t bring about an end to certain shenanigans, all gubment could do would be to parade them in front of Senate committees and mock them tirelessly.

      Third, why would you want to shut them down after giving them all of this taxpayer money? There’s a chance that AIG could come out of this and make some money, repay the loans, etc.

  2. VikingP77 says:

    Really?! Why am I not surprised?! I agree with mizj….shut em DOWN!

  3. snoop-blog says:

    AIG- Assholes In Greed.

    It’s early… I’m still trying.

  4. snoop-blog says:

    To put it in perspective though, 123 billion in Monopoly money doesn’t buy much.

    Although nothing excuses these idiots from their elitist trips to extravagant resorts.

  5. BrianDaBrain says:

    To paraphrase the above posts, AIG sux, shut ‘em down!!! :)

  6. Jabberkaty says:

    Can we wait until I get a second cup of coffee before we make blood shoot out of my eyes? Please?

    Wait, this isn’t coffee… it’s scotch. Thank god.

  7. crazyasianman says:

    WTF? what in the world could they be blowing all that money on? gold plated toilet paper?

  8. DeltaTee says:

    Can someone explain why this is an issue? What exactly were you expecting AIG to do with the loan? Save it for a rainy day. Its pouring buckets and if they had enough money, they wouldn’t have needed the loan to begin with.

    Last week the news was reporting concern that the banks that were bailed out would just sit on the bailout money. we can’t have it both ways.

    • stre says:

      @DeltaTee: i agree. they needed the loan because they were in the red. give them the loan and most of it is supposed to immediately disappear because it’s erasing the company’s debt.

      you don’t get to keep the money, put it in a savings account, and go about your business. if they didn’t need to use the money right away, we wouldn’t have given it to them.

      • chemman says:

        @stre: I agree they needed it but the problem I see is that most analysts were shocked at how quickly they went through the first $75B. According to the reports I saw, analysts were expecting that first loan to carry them for 3 to 6 months, until they could come up with a better plan. It’s alarming that the amount of money predicted for 3 to 6 months was blown through in weeks and now the extended loan amount is almost gone. What do we do in two weeks when the last 1/4 is gone? Give them unlimited access to cash until they figure out how to turn it around? How about if they are too big to fail, we break them up and see off divisions?

  9. Belabras ate my dingo! says:

    I hope they freaking choke on it.

  10. quail says:

    As part owner of AIG (through my taxes) I suggest we trim the fat by letting go with 1/5 of the workforce. Then advertise their jobs again but hire at a lower wage.

    Plus future business retreats should be at the local Motel 6. They got a pool, cable and everything. There’s even a bar down the block.

    There. I just saved us tons of dinero.

    • DeltaTee says:

      @quail: You gave the same advice to Circuit City and it sure pulled them out of the crapper! It’s good to have you working on the side of the little guy.

    • TheRedSeven says:

      @quail: Right, because that worked so well for Circuit City.

      Trying that with a company that insures a ton of our financial institute will just end up with the problem we tried to avoid in the first place.

  11. starrion says:

    What happens when AIG approaches the Fed again and gets even more money?

    Going beyond that, what happens when the next “AIG executive spend $XXX thousand on “X ridiculous luxury” story breaks?

    What exactly is the taxpayer rage tipping point?
    When do people show up outside of AIG offices with signs and pitchforks?

  12. Bahnburner says:

    I’d rather be sending that money to a newly-formed Arab republic in the Mideast…at least there will be something to show for it.

  13. crabbyman6 says:

    Wait, so they expected to get the same amount for their different divisions post-nonrecession as they did pre-nonrecession? Gee, I’m shocked that they aren’t. Whoever set that up was a freaking genius.

    How much are they going to be asking us for next week? We’ve already said we can’t let them fail, so they really have the lender in a hard spot and can do pretty much whatever they want.

  14. mugsywwiii says:

    Did any of you people even bother to read the article before your knees started jerking all over the place?

    “AIG has borrowed $90.3 billion from the Federal Reserve’s credit line as of yesterday, the bulk of it to pay off bad bets the company made in guaranteeing other firms’ risky mortgage investments.”

    They’re paying off existing obligations.

    • crabbyman6 says:

      @mugsywwiii: Sure they’re paying off existing obligations, but the fact remains that there were “loans” and as such are expected to be repaid. The problem for me comes from this in the article:

      “Five weeks in, AIG is paying out money but has yet to make much. Its plans to sell major assets to pay off the government’s loan have been frustrated by the lowered prices that interested parties are now willing to pay for its business divisions and the difficulty some have in getting financing for deals.”

      and it STILL might not be enough money yet. Maybe they can transfer the balance to another loan to pay off the first. Or maybe they’ll just trash their headquarters, lock their pets inside, steal all the copper wiring and spray paint profanities all over as the Fed comes knocking for its money.

  15. Elvisisdead says:

    Just chalk it up to AIG being a freshman in college.

  16. Traveshamockery says:

    OMG ING IS SPENDING THE MONEY WE GAVE THEM TO SPEND! KILL THEM!

  17. Plastique says:

    I regret a lot of the comments in here, although I can understand them. I work for AIG and I don’t want to lose my job. I’m not to be blamed for them going in the crapper, but those of you who don’t work for the company don’t seem to care. There are a lot of decent people that work for this company and those are not the ones to blame. If you’re going to make a comment, start blaming the execs and former execs who use to run the company. The majority of the workforce didn’t put AIG in this mess so don’t blame them. They’re the ones who have the task of rescuing the company.

    • Tiber says:

      @Plastique: Though it may not appear as such, I believe most of us are placing most of our scorn on the decision-makers. There’s no point in blaming the people who were just doing what they were told and weren’t in a position to foresee all of this. It’s just that between Congress, the White House, economic policy makers, and greedy businessmen, there are just too many guilty parties to list them all explicitly each and every time.

  18. starrion says:

    I’m not blaming the rank and file people at AIG for this mess.

    I just want to see the executive hunting trips restarted.

    With one small modification.

  19. Burgandy says:

    So, how do we do the chargeback on this one? Anyone?

  20. bmorg003 says:

    For a little more perspective, the economic stimulus package passed earlier this year was $152 billion ([en.wikipedia.org]), to be spread among taxpayers, this one company has spent 3/4 of $123 all by themselves in just a week or two (and may need more – that’s a lot of Credit Default Swaps). Obviously the rank and file employees are not to blame and they will also suffer the most (besides the tax payers). I just hope we see the bottom of this soon, it took from the crash in ’29 until the summer of 32 for the market to finally hit bottom during the Great Depression (according to the diary posted yesterday). Thankfully we don’t have the dustbowl to contend with, but things are bad, and it only looks like they will ontinue to get worse for a while…

  21. narq says:

    AIG has only proven they are completely incapable of handling their job. Usually you fire such people, but not our government. We throw money at them. It’s almost like AIG wants to single handedly crash the economy. I say they all go to prison for the next 25 years. There has to be a federal crime in there somewhere.

  22. narq says:

    By all I should have said all of the execs who accepted dirty money.

  23. INsano says:

    AIG(Ain’t It Great)…to have politicians at your beck and call.

  24. panzerschreck1 says:

    this money wasn’t supposed to be saved, it was supposed to be spent

  25. MrEvil says:

    What’s scaring me about how quickly they burned through the line of credit, and they’re STILL on track to fail. Only now they’re taking 125B in taxpayer dollars with them.

    I think bailing these companies out is the wrong choice. The Bail-out doesn’t guarantee anything except that if the companies do end up failing they’ll now take billions in taxpayer dollars with them.

  26. Anonymous says:

    What will happen to all those account policy holders if AIG bails. It’s scary to buy Life Insurance or any type of Insurance from any company now.

    • diamondmaster1 says:

      I don’t get it; I remember reading stuff like The Invisible Bankers concerning the insurance industry and figured these guys were pretty much bulletproof in any economy.

  27. moore850 says:

    Brewster’s millions update: from the article, “AIG has borrowed $90.3 billion from the Federal Reserve’s credit line as of yesterday, the bulk of it to pay off bad bets the company made in guaranteeing other firms’ risky mortgage investments.”

    Aside from making an insanely enormous 90B bad loan, how many of us could spend 90B in a few months and have the same ‘nothing’ to show for it? In Brewster’s millions, the guy could barely get through a few million, much less 90B. Aside from large public works, I don’t think I could even get close to 1B.