Insurance giant AIG was the poster child for corporate greed and a government bailout program run amok. Now in their self-reliant efforts to turn things around and restructure, the insurer needs just one more thing – 22 billion more in taxpayer dollars. The TARP funds will be used to buy “Federal Reserve preferred stock interests in the special purpose vehicles holding two key subsidiaries being sold off, AIA Group Ltd and American Life Insurance Co (ALICO).” When you figure out what that means, let me know. There is one bright spot in this corporate muck however. According to the Treasury Department statement, ” … these assets significantly exceed the amount of the preferred investments, and as such, no losses are expected on those preferred interests.” I’ll file that in the “We’re From the Government and Are Here to Help You” file. Maybe we’ll get this finance mess fixed, when both government and industry resolve to speak English again. I’d back legislation to make that happen.
_ Mark Esposito, Guest Blogger