In a filing with the U.S. Securities and Exchange Commission on Monday, AIG said it would issue and sell to the U.S. Treasury 300,000 preferred shares, including warrants to purchase common stock, in exchange for up to $29.835 billion.And AIG will turn around and pay off the rest of the banks, who mysteriously will continue to post record earnings and of course not need bailouts of their own. Robbing the taxpayer to pay Peter off so he pays Paul when nobody's looking, that's the Obama way!
The original amount agreed in early March was $30 billion, but officials subtracted $165 million in retention bonuses paid to employees of the AIG Financial Products unit last month.
Only today's nearly 300 point drop in the Dow when Bank of America tried to pass off being solvent signifies the AIG bailout-by-proxy plan is no longer fooling Wall Street. Banks have far too many systemic problems for this to work for much longer. Banks took a bath today and a lot more red ink is coming.
And as CalcRisk points out, nobody believes the Obama administration anymore on banks.
And on the false Stress Test rumor this morning, from Bloomberg: Treasury Says ‘No Basis’ to Report on Bank TestingWith all the smoke and heat in the room, somebody's going to eventually figure out a fire may in fact be involved.A U.S. Treasury spokesman said there’s no basis to a blog posting that buffeted financial stocks by saying that most of the nation’s largest banks are insolvent.Why are they even responding?