As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Monday, February 23, 2009

The Money Pit

The government has an 80% stake in AIG and has pumped in something like $150 billion dollars to date. It's, um, not working.

American Insurance Group, the insurance giant that is 80-percent owned by the US government, is in discussions with the government to secure additional funds so it can keep operating after next Monday, when it will report the largest loss in U.S. corporate history, CNBC has learned.

Sources close to the company said the loss will be near $60 billion due to writedowns on a variety of assets including commercial real estate.

That massive loss is likely to spur downgrades in its insurance and credit ratings that will force AIG to raise collateral that it doesn't have.

We often hear about the "chaos" that would result from allowing a company like this to, but I'm trying to figure out what would be somehow worse than what is already happening. We're $150 billion in the hole with no end in sight and the company still functionally dead. Shouldn't we be seizing their assets and having an auction?

NOTE: I did not see John Cole's title before posting.

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