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Business Makeover Special Edition: AIG

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New snafus, same great advice.

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For reasons beyond our comprehension, after the company's mind-boggling mismanagement of existing funds and a quarterly loss of $25 billion, the US government will once again provide a restructured rescue package to American International Group (AIG) .

The original $85 billion bridge loan will be reduced to $60 billion and its interest rate cut by 5.5%. The Treasury is also purchasing $40 billion in AIG's preferred stock, as well as $52.5 billion of the company's mortgage securities.

The bailout's new grand total? $152.5 billion - and counting. It's the financial equivalent of using a defibrillator on Ulysses S. Grant's corpse.

AIG Chief Executive Edward Liddy said the new deal will represent "a durable capital structure" and provides a strong signal that the company is on the road to recovery.

Because we can't in good conscience condone an "if at first you don't succeed, use taxpayer money to try again" approach, Minyanville offers up the following sage advise for both AIG and the Treasury.


In a letter, Senator Charles Grassley called on CEO Edward Liddy to release records on how AIG used its federal loan. To avoid the appearance of evidence tampering, Liddy would be well served to change his last name to something less incriminating.

The public was livid upon learning of the company's lavish spa junket, taken mere days after the bailout. To curry favor with the masses, instruct executives to administer seaweed wraps and massages to those most incensed.

Some at AIG contend that bankruptcy would have offered greater protection than the government bailout. It's not too late to sell off your utilities and railroads and pray you land on Free Parking.


The accuracy of AIG's computer models are being called into question. Going forward, use the tried and true method: A monkey and some darts.

An extravagant hunting trip directly following the second government loan had a lot of people scratching their heads. It might make sense to keep those hunting rifles in the office should the need for fortification arise.

Make up your mind: Are you American or international? Can't be both.

No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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