AIG (fingers snap) '30 billion more please'

Chood · Mar 3, 2009

Quote from Chood:

. . .

Good news is that USA now runs the lottery (forced into it), so it should know who is collecting the payouts. Thank maybe GS would take a hit if this idea gains traction?

If Bernanke is running for cover over this AIG disgrace, can GS' prop desk be far behind? Recall that GS prop trading, already by 3rd qtr of 07, had taken billions from the likes of AIG.

Easy to envision GS, as an early and very big casher of these lottery tickets (aka AIG credit default policies), called before a congressional committee to splain. I would guess it is visiting and maybe re-engineering the transactions trail as we speak (or more likely, has been for many months).

Could turn out to be the worst 40 or more billion it ever made. (Nice problem to have, still.)

eagle · Mar 3, 2009

Averaging Down happened to everybody, including the Fed.

Quote from swtrader:

'and another one of those drinks with the little umbrellas, while you're at it'

http://news.yahoo.com/s/ap/20090302/ap_on_bi_ge/aig_rescue

I believe that's 180 billion now, just for AIG

dafeeder · Mar 3, 2009

Quote from achilles28:

Every few months I come back to the same problems, with the same unresolved questions.

Who is Counter-Party to AIG?

We're talking 180 Billion in payouts, or more.

Not one bank, publicly traded company, fund, or investor has reported sick income from CDS payout, or arbitrage?

Underwriters are supposed to hedge their risk. So when CDS premium goes up, they buy offsetting positions that result in small, accumulating losses.

But in order for AIG to lose money on any transaction (selling low, and buying higher), their counter-party must have bought low and sold HIGHER!!

Its the same market, working under the same principles = zero sum.

So now, the Government has literally handed out some 9+ Trillion dollars - most of which has gone to cover "derivative losses" - yet not one publicly traded Company, on the planet, has yet to report any profit accruing WHATSOEVER, from CDS trade????

Thats impossible.

Its like if 10 people show up for a poker game and they all walk away, claiming they lost to each other.

AIG "lost" to JP Morgan, who "lost" to Citi, who "lost" to UBS, who "lost" to Northern Rock, who "lost" to xyz.

Somebody has to walk away from the table with all that cash. Money can't disappear into a vacuum like that. Its impossible.

Seriously. Are we to believe a few retail traders are now infinitely richer than Bill Gates? Or 20 companies are now bigger than the entire Market Cap of the S&P 500????????

I think we have a BINGO!

OVVO · Mar 3, 2009

Quote from achilles28:

Thats impossible.

Its like if 10 people show up for a poker game and they all walk away, claiming they lost to each other.

AIG "lost" to JP Morgan, who "lost" to Citi, who "lost" to UBS, who "lost" to Northern Rock, who "lost" to xyz.

Somebody has to walk away from the table with all that cash. Money can't disappear into a vacuum like that. Its impossible.

AIG lost to JPMorgan.....etc, but most monolines posted no collateral in doing so. So any profits JPM has marked are bs if AIG can't cover them and then the chain of profits marked is evaporated, leaving losses on books.

The only ones who have profited are those that have had collateral posted daily, however, they are the smaller counterparties in this whole equation.

zdreg · Mar 3, 2009

aig is a harvard case study.
http://online.wsj.com/article/SB122538449722784635.html?mod=todays_us_page_one

poyayan · Mar 4, 2009

The counter party of AIG really should take a hit too. Gov shouldn't shoulder 100% of the loss. Afterall, they should be happy that they got anything at all.

achilles28 · Mar 4, 2009

Quote from OVVO:

AIG lost to JPMorgan.....etc, but most monolines posted no collateral in doing so. So any profits JPM has marked are bs if AIG can't cover them and then the chain of profits marked is evaporated, leaving losses on books.

The only ones who have profited are those that have had collateral posted daily, however, they are the smaller counterparties in this whole equation.

You don't get it.

AIG has covered it's losses. Courtesy of the US taxpayer.

So any losses accruing to AIG benefiting JP Morgan, should show up on JP Morgans quarterlies as profit. Where are they? Remember, thats what the Government bailout of AIG was for: to cover its losses.

AIG is one small example.

The entire financial bailout is over 10 TRILLION dollars. Most of that went to cover derivative losses.

So where did the Trillions in profits go that were "losses" counterpartied by the US taxpayer?

That money has apparently vanished. And any thinking person with half-a-nut rolling around, knows thats impossible.

For every seller (writer), there was a buyer.

So, I ask again.

Whose got TRILLIONS in US Taxpayer CASH???

achilles28 · Mar 4, 2009

Quote from kandlekid:

Well, I dunno. If you get a margin call from your broker, who gets the cash ?
Not the counter party, they got it already. And if you're leveraged 30:1, that's alot of cash.

You shovel cash into your account as it goes down the drain.

The counterparty gets it from the broker. And the broker gets it from you (the trader).

If an account gets liquidated in the red after a margin call, the broker takes the hit then recoups it from the trader.

The loss simply doesn't "vanish". Or else how does a counter-party profit from a trade no one paid for???

Martinghoul · Mar 4, 2009

Quote from achilles28:

You don't get it.

AIG has covered it's losses. Courtesy of the US taxpayer.

So any losses accruing to AIG benefiting JP Morgan, should show up on JP Morgans quarterlies as profit. Where are they? Remember, thats what the Government bailout of AIG was for: to cover its losses.

AIG is one small example.

The entire financial bailout is over 10 TRILLION dollars. Most of that went to cover derivative losses.

So where did the Trillions in profits go that were "losses" counterpartied by the US taxpayer?

That money has apparently vanished. And any thinking person with half-a-nut rolling around, knows thats impossible.

For every seller (writer), there was a buyer.

So, I ask again.

Whose got TRILLIONS in US Taxpayer CASH???

Have you looked at the stock mkt recently? Are you familiar with how the whole system-wide margin setup operates? Have you seen how much hedge funds lost last year and how much the banks have been writing down? As a 'thinking person with a half-a-nut rolling around', I am certain you can figure it out.

achilles28 · Mar 4, 2009

Quote from Martinghoul:

Have you looked at the stock mkt recently? Are you familiar with how the whole system-wide margin setup operates? Have you seen how much hedge funds lost last year and how much the banks have been writing down? As a 'thinking person with a half-a-nut rolling around', I am certain you can figure it out.

Please, enlighten me.

Or are you one who thinks X Trillions in S&P market cap "evaporated"? "Vanished overnight", as they like to say....

You believe that?