Saturday, October 11, 2008

Dollars & (Non)sense

Let me get this straight...The current share price for AIG is $2.33 (10/11/08). The number of AIG shares outstanding, as per the same 10/11 date, totals 2.69 billion.

Doing the math, the approximate worth of AIG comes to $6.2 billion as of 10/11/08 ($2.33 X 2.69 billion shares = $6.2 billion)

Question: Why is the Fed/government giving the company another $37.7 billion on top of the original $85 billion when the company can be bought outright for less than $7 billion?

Answer: To help pay for their $440,000 party.

Oct. 9--Here's the tab: $139,375.30 for rooms. $147, 301.71 for "banquets." $1,488 for the Vogue Salon, which features manicures, pedicures and hairstyling. $6,939.09 on golf. $2,949 for tips. $5,016.32 at the Stonehill Tavern. $3,064.71 for in-room dining and the lobby lounge. That's part of the $440,000 bill from a recent weekend bash that an American International Group Inc. subsidiary threw for its top performers at the posh St. Regis resort, on a bluff overlooking the Pacific Ocean. Sounds like they had fun.

Their timing was exquisite. The AIG folks and their guests hit the spa just days after the insurance behemoth grabbed an $85 billion bailout package from U.S. taxpayers. They needed it because AIG piled up net losses of $18.5 billion in the past three quarters on write-downs tied to the collapse of the U.S. subprime mortgage market.

"Carl Fox: I came into Egypt a Pharoah who did not know.
Gordon Gekko: I beg your pardon, is that a proverb?
Carl Fox: No, a prophecy. The rich been doing it to the poor since the beginning of time. The only difference between the Pyramids and the Empire State Building is the Egyptians didn't allow unions."

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