Federal Court: No, the Government May Not Prevent Further Discovery of the Takeover of AIG

biggovernment.com ^ | 02/05/10 | Frank Gaffney

[I_be_tc]

later

[PGalt]

Thanks for posting. Very interesting.

Have you seen FReeper AliVeritas’ OUTSTANDING homepage...here...

http://www.freerepublic.com/~aliveritas/

[metesky]

I cannot for the life of me understand why so many FReepers are still in the dark about this.

The Saudis have been busily buying off U.S. colleges and universities for years, long before 9/11.

The constant mealy-mouthed propaganda passing for education coupled with the greed and stupidity of the majority of our politicians makes it pretty easy for them, considering we've ended up with a country in which 55% of the population can't find their a$$ with both hands without government assistance.

You're a hard-working woman, Cindy.

[PGalt]

ping

[dalereed]

I’ve used mich worse on a daily basis in public since I was 5 and i’m 72, grow up!

[Paige]

Take your simple-minded Socialistic behind to Europe and LEAVE US ALONE!

This is a Capitalisitic Economy and still a republic. GET LOST!

With that being said, GOD BLESS AMERICA!

[Paige]

OMG I missed this one ...when was this ?

[Just A Nobody]

...when was this ?

IIRC, it was Memorial Day at Arlington National Cemetery.

[JasonC]

Yes, they do have it. The net worth on AIGs most recent quarterly statement fully covers the treasury's investment, after all debt, including of course that lent by the Fed which is senior to all of it. AIG has been in the black in balance sheet terms since last summer. The reason for the recovery is clear - it is a giant leveraged bond fund with a $380 billion bond portfolio (out of $840 billion in total assets), and bonds spent all of last year on an epic tear higher.

The US treasury owns $68 billion in AIG preferred stock, senior to its other preferred issues, and to the common. (Note that of an up to $30 billion total of the series F preferred approved for issue to the treasury, only $3 billion has been tapped). In the market as of Friday, the common had a value of $3 billion. The AFF series yields about 12%; the price is up to $14 from a low of $1.27 a share during the crisis, and $2 after the bailout. AIG has $70 billion in tangible book value as of its most recent quarterly sheet.

AIG has $400 billion of insurance float. Meaning, it receives the interest on that much capital without needing to pay to borrow it, between the time it earns premiums for insurance written and the time it pays out on future claims. There is every reason to expect that float will generate a continual earning power in the ten billion a year range. For example, in 2006 it earned $22 billion.

When corporate bonds were trading at 60-80 cents on the dollar to yield 10-15% on great depression level default fears, AIG was insolvent. But with corporate bonds trading near par to yield 5-6%, it is solvent, and will earn money to rise above the break even point already reached last year.

It may easily take 3-5 years to have a total workout and repayment to the treasury. But the treasury is already covered by assets fully worth what it put in to the company. Barring any new smash equal to the last in that time frame, the US treasury will get out whole.

What we see here, for the nth time, is the delusions of one entry accounting. A cash flow isn't a loss; buying a company's security with assets behind it, is not throwing the money away.

[JasonC]

AIG is not a church. It is too stupid to merit extended comment. The plaintiffs are merely trying to criminalize the practice of banks giving Islamic investors the fig leaf they want (due to the formal ban on interest in Islamic law), that they are not being paid interest but instead sharing equity profits. Nobody can possibly care about any of this crap. It is transparent fraud pretext for a baseless witchhunt.

[JasonC]

I am a capitalist, and you are attacking capitalists. I am not going anywhere, and the treasury support for AIG did not cost you one dime and it isn't going to; it materially benefited you and everyone else in the country.

[JasonC]

Where is went - it bought AIG preferred stock, $68 billion of it. Of the last round that had $30 billion authorized, only $3 billion was needed and used. The US treasury owns that preferred stock, and is receiving regular dividends on it, several billion per year. The company lost its previous capital of $95 billion in the smash, and this investment recapitalized it and allowed it to continue its operations. AIG owns $840 billion in total assets, including $440 billion in corporate bonds. It naturally also have other commitments against those assets, primarily insurance policies (life, property, etc) that will eventually pay out. But it earns the interest on those assets in the meantime, and it has more in total assets than it owes in such ways.

How much more? As of September of 2009, $71 billion more. Enough to cover the entire treasury investment. The common stock, which is junior to the treasury stuff, has a market value of $3 billion as of Friday.

AIG is solvent, and its valuable assets fully cover the investment the treasury made. Understand, at the lows of the whole market early in 2009, AIG was indeed underwater, and there was then a serious risk of eventual loss to the treasury. But AIGs main asset, corporate bonds, were on a tear all last year, and brought it back into the black.

[JasonC]

Do you think that Pelosi Frank and Franken are such undefeatable enemies that every conservative should live in fear of them and be convinced we are all doomed? lol.

Alexander Hamilton faced a country with zero credit, its bonds trading at 15 cents on the dollar, with no revenue system, with states fighting one another to avoid paying for anything. He left a country with firmly established finances and credit abroad. I'm trying to imagine Hamilton shrieking hysterically that we are doomed because we've promised ourselves too many entitlements, and I just can't.

I'm trying to imagine Ronaldus Magnus being scared of Barney Frank. Nope, that doesn't work either. I'm trying to imagine a Marine in the Argonne coming out of an acre of mustard gas listening to you-all whine about 10% unemployment with $40,000 a person average income and pretending it is an unbearable hardship, the end of America. Nope, that doesn't work either.

Worrying about Nazi dictators with jet fighters and V-2 rockets who've taken over all of Europe, sensible enough. Worrying about Joe Stalin being deliberately given atom bombs by American spies, sensible enough. Worrying about commie sympathizers deliberately furthering a communist take over of China by a murderous Mao, sensible enough. Worrying about madman with nukes banging their shoes and handing nukes to even madder third world hooligans, sensible enough. Even, today, worrying a bit about Iran getting nukes when our coward leaders won't do anything about it (when they easily could), OK, that too is sensible enough.

But pretending I must cringe in terror before this pack of incompetent halfwits that are the modern Democratic party, or somehow I'm not conservative enough, is hysteria for cowards, and I am not buying a syllable of it. We will send them packing. They are beneath our contempt. We will annihilate them politically and restore the country to sounder paths, and we won't even break a sweat doing it.

Man. The Hell. Up.

[bigheadfred]

I work in a small cabinet shop. From a workforce of 14 we are down to 3. I took a $600 a month paycut to keep my job. On a salary. We still have some work though. In order to hit completion and install dates I have to now work 60 hours a week-paid for 40. My son, out of work, daughter in law, and grandson have moved back in and I am supporting them. My brother, also out of work, whose son, you will recall, is Sgt. Evan Vela, has no money coming in and since Evan's trial was held in Baghdad the cost of that wiped him out. I can't sit by and let him lose his house. I don't have the room to bunk him and his family. My neighbor, also out of work, who was training to become a police officer, had a freak stroke brought on by extreme coughing from a training exercise involving pepper spray, has the use of our car since his was repoed, the no job thing, so he can make the 200 mile drive to his doctor appointments at the VA hospital in Salt Lake City. My other neighbor, ALSO out of work, has been stealing my firewood all winter cause he has a problem with his furnace and has no money to even fix it-well, I just turn a blind eye, even though I am running dangerously low this early in the year. Wood is my PRIMARY heat source. I am BARELY HOLDING ON. I DO NOT CRINGE. I AM F*CKING PISSED. WHEN (IF) I FIND THE TIME, REST ASSURED...

I WILL MAN THE HELL UP.

PS: If you find the time in your busy schedule, please review and hopefully sign this petition. We won't rest until Evan is FREE.

Free Evan Vela

PPS: You need any new cabinets?? :-)

[mrreaganaut]

You wrote:

There is no crime in any of it. Just a sensible public policy is a time of crisis. The attempt to criminalize it is as obscene as prosecuting Marines over Fallujah.

Obviously you are not paying attention; the First Amendment is the only grounds upon which a citizen can bring the matter into court, and yes, it is a stretch. However, the issue of 'taking over' a business merely by announcement is a serious Chicago-style abuse of power, even more serious than Fallujah show trials. How did Timmy get a 40% interest in the company?

You assume that everything is on the up-and-up. Why? One side says that everything is fine, and the other side says that a crime has been committed. The presumption 'innocent until proven guilty' does not stop trials from going forward; it is a presumption, not a fact. You seem confused by this presumption into believing the administration's position. Let me give you a hint: sometimes people who claim to be innocent are proven at trial to be guilty.

This civil case is the only way the truth will come to light in time to do any good. We cannot trust this Justice Department to investigate this administration, nor can we expect elected officials to risk becoming 'the next Joe McCarthy' by too strident criticism. They might even be accused of attempting to criminalize policy differences. (Gasp!)

[ding_dong_daddy_from_dumas]

As a fact, however, the populist know-nothing set will be excluded from all serious decision making on any of it.

The problem is that this is not 17th century France and you are not Louus XIV.

[Paige]

You are wrong and no if YOU want the government to take over companies..YOU ARE NOT a Capitalist...

[ding_dong_daddy_from_dumas]

Louis that is.

[Sergio]

Bookmark.

[Republican Wildcat]

Especially given the insurance side of AIG had nothing to do with the bailouts.