American International Group. AIG Fights For Survival. (part 1)

Sep. 15, 2008.
Nation's largest insurer hit by credit raters as it tries to raise cash. Fed asks Goldman and JPMorgan Chase to raise $70 billion for firm. Shares end down 61%.

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The pressure on American International Group reached fevered pitch on Monday night as the troubled insurer was hit by a series of credit rating downgrades.

The cuts could prove deadly to AIG, the nation's largest insurance company, which is scrambling to raise much-needed capital.

Late Monday night, Moody's Investors Service and Standard & Poor's Ratings Services each said they had lowered their ratings.

A few hours earlier, Fitch Rating had also downgraded AIG, saying the company's ability to raise cash is "extremely limited" because of its plummeting stock price, widening yields on its debt, and difficult capital market conditions.

The downgrades will make it more expensive for AIG to issue debt and harder for it to regain the confidence of investors.

Fitch said AIG could be required to post $10.5 billion of additional collateral if it was downgraded one notch by one of the other major rating agencies and $13.3 billion of collateral if downgraded by both, Fitch said in a statement, citing AIG's July 31 estimates.

The grim assessments came after a day in which state and federal officials raced to help the insurer gain access to much needed cash.

The company has lost more than $18 billion in the past nine months.

The credit downgrades could doom its business.


Source:
http://money.cnn.com/2008/09/15/news/companies/AIG/index.htm

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[lostinseganet]

Blow your nose man.

[flagship21]

They should not be bailing out these bankers. Let them learn.

[ibphotos]

Depends I suppose if AIG is a victim or conspirator in all this. Mortgage companies sign really crappy loans with "sub prime" borrowers. MOst of these borrowers I think, can afford a house, just not in 15 years at 25% interest. SPeculators took the sub-prime loans, cause never held a house long enough for it to reset. Housing goes up, sales go down, speculators get stuck holding the bag. Other sub-prime borrowers don't get refinanced (AS PROMISED). AIG insures the whole mess. BOOM!

[jcruz0]

insurance should be illegal. it's nothing but gambling. we need a national, single payer insurer. once you realize who insures the insurers you understand how it's a scam to rip the private citizen off. imagine a cat 5 hurricane destroys most of florida, and all the people with insurance want their check, insurer can't pay,guess who is insured by THE GOVERNMENT? the insurer. why don't we just have the government insure us initially?

socialize the loss, privatize the profit.

God Bless America.

[Tigerpoi51]

The Govt just prints the money. But this cause's the dollar to lose value. .. and will end with Hyper Inflation.

[chutubeme]

our taxes...

[enytned1]

Where is the American Government getting the money to bail all these companies out? Who will bail out the government when they can't cover their loans?

[KelthTruth]

hey this is not your video

[sugargrandpa]

insurance company? it can't even insure itself lol