Chronicles Of Depression 2.0: #210

Fed Readies A.I.G. Loan of $85 Billion for an 80% Stake

In an extraordinary turn, the Federal Reserve was close to a deal Tuesday night to take a nearly 80 percent stake in the troubled giant insurance company, the American International Group, in exchange for an $85 billion loan, according to people briefed on the negotiations.

In return, the Fed will receive warrants, which give it an ownership stake. All of A.I.G.’s assets will be pledged to secure the loan, these people said.

The Fed’s action was disclosed after Treasury Secretary Henry M. Paulson and Ben S. Bernanke, president of the Federal Reserve, went to Capitol Hill on Tuesday evening to meet with House and Senate leaders. Mr. Paulson called the Senate majority leader, Harry Reid, Democrat of Nevada, about 5 p.m. and asked for a meeting in the Senate leader’s office, which began about 6:30 p.m.

The Federal Reserve and Goldman Sachs and JPMorgan Chase had been trying to arrange a $75 billion loan for A.I.G. to stave off the financial crisis caused by complex debt securities and credit default swaps. The Federal Reserve stepped in after it became clear Tuesday afternoon that the banking consortium would not be able to complete the deal.

This is why we didn’t have a full-blown stock market crash this morning.

Word had already filtered out that this deal was done.

As Rex Hammock asked in Twitter: Does this mean we’re now all invited to A.I.G. shareholder meetings?

Who’s next to try to offload their greed and thievery on the rest of us?

All prior Chronicles of Depression 2.0 posts. Read them before you must.

Explore posts in the same categories: C.O.A.T. - Belief, C.O.A.T. - Money, C.O.A.T. - Politics, C.O.A.T. - Scams, Depression 2.0, Uncategorized

One Comment on “Chronicles Of Depression 2.0: #210”

  1. richfinck Says:

    This is bullshit. No taxpayer money for these crooks. Let them all fail.


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