Is more like it, and we are the trough…
AIG’s Fourth Rescue May Not Be Last as U.S. Guarantees Support
By Ari Levy and Hugh Son
March 4 (Bloomberg) — U.S. taxpayers may not be done bailing out American International Group Inc. after the head of the Federal Reserve said a fourth rescue of the insurer was needed to keep the financial system from failing.
Fed Chairman Ben S. Bernanke testified to the Senate yesterday that AIG’s collapse “would be devastating to the stability of the world financial system” and would keep the U.S. government from recouping its investments, which had already ballooned to $150 billion. A day earlier, the Fed had warned that AIG may need more support if markets don’t stabilize and improve.
“We’re not done with AIG by a long shot,” said Phillip Phan, professor of management at the Johns Hopkins Carey Business School in Baltimore. “The problem is we still don’t know the extent of the risk AIG has. We don’t know where the bottom is.”
The rescue, which now leaves taxpayers on the hook for $163 billion at AIG, a government official said, was raised after the New York-based company reported a $61.7 billion fourth-quarter loss on March 2. AIG still has billions of dollars in unrealized losses on assets and faces declining revenue on premiums because of the slump in commercial insurance and the company’s struggle to attract new business. (LINK to Full Story)