All sifus here,

Pls input any extra information of this counter. You can post your personal view on this counter is it worth for long term hold and short term trading at current price.

Federal reserve is giving a two-year, $85 billion loan to AIG in exchange for a nearly 80 percent stake in the company, which lost billions in the risky business of insuring against bond defaults.

Oct. 8: The Fed agrees to lend AIG another $37.8 billion.

The executives of the group misused hundreds over thousand in USD of the company fund on posh california retreat admit recent bailout.




Closing details at 10-Oct-2008

AMER INTL GROUP INC(NYSE: AIG)

Last Trade: 2.33

Prev Close: 2.39

52wk Range: 1.25 - 68.26
Volume: 228,360,300
Avg Vol (3m): 131,783,000

Market Cap: 6.26B
P/E (ttm): N/A
EPS (ttm): -5.98
Div & Yield: 0.88 (27.60)

Risk involves
- Currency conversion risk
- Increment of bankruptcy in financial institution







This post has been edited by darkknight81: Oct 11 2008, 12:21 PM

http://biz.thestar.com.my/news/story.asp?f...91&sec=business

THE PROBLEMS:

"Being well capitalised and backed by strong corporate governance and accountability are important elements for a successful company.

Large financial institutions in the US and Europe, apart from the subprime mortgages issue, failed because they were too diversified, lacked sufficient capital, corporate governance and accountability.

The removal of the Glass-Steagall Act, which was passed by the US Congress in the wake of the 1929 stock market crash, to an extent, is the culprit in the collapse of the huge investment banks there.

The Act had put in place ‘’Chinese walls’’ between commercial and investment banking and if it had not been repealed, chances are that the entire financial system would not have avalanched."

POSSIBLE SOLUTION :

" We will accelerate full implementation of the Financial Stability Forum recommendations, and we are committed to the pressing need for reform of the financial system. We will strengthen further our cooperation and work with others to accomplish this plan "

http://biz.thestar.com.my/news/story.asp?f...30&sec=business

BOTTOM LINE :

IMPACT ON SHARE PRICES : HOW FAST AND HOW WELL THEY CAN REFORM THEMSELVES. Like a powerful earthquake, do expect some aftershocks here and there.

This post has been edited by SKY 1809: Oct 11 2008, 07:26 PM

I would cut my rating of AIG price at this level is only to HOLD.. as more carnage coming around in the financial sector in the next 9-18 months, AIG might drop lower to $1.00~$1.25, then it is a BUY.

Financials stocks ARE NOT for the faint of heart at the moment.

If you have money to dump and wanted to risk it, it may be worth the ride if you can pick the right one.

Thanks for your comments

Yup..The removal of the Glass-Steagall Act is the root cause of all these issues as lack of governance...

Of all the stocks related to the credit crisis, i would say AIG is the best pick..As government has injected cash into it ... At least we know the government will not let this company down Compare to other financial instutition which don know which one the government are going to rescue....

We don know when the things will settle down but probably not in this year or next year. It will certainly takes longer time. This time the situation is similar like 1929 great depression which may only happened once in your lifetime. Got to grab this opportunity i think

This post has been edited by darkknight81: Oct 11 2008, 11:37 PM

Personally, I don't think US itself will go into Depression again.. I bet no one here was born during that era and will won't really know in reality how bad they felt that other than reading from their history. Malaysia wasn't even born yet. They already knew it, and have their infrastructure in place avoid it but since it is global effect, US may not be able to stop the fallout elsewhere from happening in other countries.

I think US will have a longer recession than expected.. something like 18-24 months instead of 6 to 9 months like last time Dot Com bust. They would need this amount of time to purge out all the toxins in their financial system.

US govt has yet announce their 3rd quarter GDP report (due by Oct/Nov) but expected to be a negative growth from last quarter, but even at this number technically it is not under recession yet until they get their numbers again in January/Feb 2009 and of course.. by that time, everyone already should have felt it. Their job markets dry up, unemployment goes up (may hit 10% or higher), our Malaysia exports to US go down (our factories may have to lay off workers due to slow down because we exports a lot to US), then it is Malaysia turn to have recession. As usual, we always seems to know only AFTER the fact or the rest of the world had it.

Since US economy is consumption based, they'll just consume less during lean times but Malaysia could be f**cked pretty bad if ours tanked like theirs. Hopefully, we won't end up like Iceland.

This post has been edited by danmooncake: Oct 12 2008, 12:40 AM

considering the deal for AIG's something like giving 80% ownership to the US govt, I think its valuation has to change...still after some sale of its assets, it should be doing better.

i doubt we'll end up like Iceland, these guys' car & home loans come in a basket of currencies, and now the krona is worth shit, they're in super deep trouble!

At least, it is not as bad as Zimbabwe Dollar... now that's really worth shit.

Well, my worry is whether US will happened end up like Japan or even argentina which until now haven fully recover. Look at japan.. It tooks about 10 years and yet still haven recovered....

is normal to Nationalize subprime industries.. and let the poor people bare the loss

Well, if you choose to invest, then you have to take certain amount of risks.

All investments come with risks. What is your risk level ?

High returns could come with high risks. This stock could be termed under " high risk "

If this stock has every certainty to make it, then perhaps the price would be diff too.

This post has been edited by SKY 1809: Oct 12 2008, 05:44 PM

I don want to take much risk. Thats y need expert here to tell me the risk involves in this counter which i may not see.

First, there is a time risk.

The loan fr the Government is 2 years. No guarantee for further extension. If Govt has to force sell their assets to pay back the loan. Share price could drop.

The amount of borrowing is big let say at 80 to 100 Billions. To raise fund from sales of assets across Asia is not easy, with the credit crunch and share markets melt down. Recessions already written on the wall.

People all overall have lost some confidence on them, therefore there would be big impacts on their insurance business.

As a forumer just pointed out , US may need 2 years to go into recession. Quite unlikely to pay back 80 billions within such a short period.

Just my 2sen opinion.

This post has been edited by SKY 1809: Oct 12 2008, 07:42 PM

During the great depression, it almost took 40 years to recover if i am not wrong. So this time even though may not as bad compare to 1929 but 2 years time seems impossible...Look at the budget deficit for US now it is already reached near to 10 trillion.

What you said is very true, if they cannot afford to pay back the government (look impossible) then they can go to borrow from financial institution..But who will borrow them? Like what you said they have no confidence on them already... Seems like quite risky ler brother 

http://www.aigcorporate.com/corpsite/


This post has been edited by darkknight81: Oct 12 2008, 09:01 PM

For US and other countries financial problems, they will look towards Asia for their medicine.
Yes, Asia is the where their backer will be especially China and Japan.
They have plenty of cash in their banks.

China is willing to cough up enough cash especially they wanted more US assets.
They love 'em and Uncle Sam has no choice but to sell 'em to China - properties, oil refineries and especially technologies.

Yes, that's will definitely accelerate China to be the number one economy in the
world in less than 10 years.

This post has been edited by danmooncake: Oct 12 2008, 10:23 PM

AIG originated from China, their first operation base. Many years back.

True.. but it is a US company now and in trouble. They can sell it back to China if needed and China
can buy it cheap, turn it around and make more money.

China have a lot of USD reserve. MAYBE they are waiting for a more suitable time to buy over the desperated business in US.

as long as AIG not bail out by Gov..i still interested to buy..

???

Already bailout by US gov which exisitng shareholders of AIG has been severely diluted.

last 3Q's net income : -5,357M -7,805M -5,292M
last quarter's longterm debt : 163,577M

i think kennot tahan lor