AIG’s been keeping a low profile lately, letting other companies take the bad-behaviour spotlight. What’ve they been up to? Needing more money, apparently:
WSJ: American International Group Inc. is in discussions with the government about Washington backstopping some of its troubled assets and is considering selling units through initial public offerings.
“We’re looking at a broader array of recapitalization options,” said Paula Reynolds, an AIG vice chairman who is overseeing the restructuring of AIG, which was rescued by the government in September with a bailout package that now totals $150 billion.
“We both realise that the environment’s changing and we have to adjust to that environment,” Ms. Reynolds said in an interview, referring to the federal government. She joined the company after the bailout to help the giant insurer break itself up to repay a massive federal loan.
Some will say that a backstop isn’t necessarily a transfer because, well, it might not be necessary. But make no mistake, companies don’t go to Washington for backstops unless they’re needed. The black hole continues to suck in your tax dollars.