The Federal Government, which originally refused a massive loan to the failing insurance company, has just changed its mind and will grant AIG an $85 billion loan. In exchange, the government will take over with an 80% stake in the company. So much for that ‘just say no‘ approach, right?
AIG’s CEO Robert B. Willumstad is out. He is the first casualty of the takeover. However, this news will most like wipe out all the rest of the company’s shareholders. Ouch.
After the Lehman, Bank of America, Merrill Lynch, and now Barclays news, AIG was kind of an afterthought. But as it turns out, this bailout might have the biggest effect on the average American.
Right now Larry Kudlow is on CNBC trying to pawn this deal off as potentially being “good” for the American taxpayer, because we may get something out of it. Seems unlikely. Does anyone trust that a big financial group can do perform well anymore?
CNBC: AIG To Get $85 Billion Loan, Give Up 80% Stake, September 16, 2008