Home > Uncategorized > AIG at US$150 billion; Circuit City under Chapter 11 … for today

AIG at US$150 billion; Circuit City under Chapter 11 … for today


AIG Gets Expanded Bailout, Posts $24.5 Billion Loss Bloomberg.com: Worldwide

American International Group Inc. got a $150 billion government rescue package, almost doubling the initial bailout of less than two months ago as the insurer burns through cash at a record rate.

AIG will get lower interest rates and $40 billion of new capital from the government to help ease the impact of four straight quarterly deficits, including a $24.5 billion third- quarter loss posted today by the New York-based company.

Another report mentioned …

Circuit City Stores Inc. filed for bankruptcy amid rising competition from Best Buy Co., Wal-Mart Stores Inc. and online electronics retailers.

The petition for Chapter 11 protection in U.S. Bankruptcy Court in Richmond, Virginia, listed $3.4 billion in assets and $2.32 billion in liabilities, driving the shares down 56 percent before the New York Stock Exchange halted trading. The company said it is entering court protection owing Hewlett-Packard Co. $119 million and Samsung Electronics Co. $116 million.

Who will they give the money to …

The manufacturing sector has (hundreds of) billions in debt. They cannot take any more debt. The world is suffering from global overcapacity in manufacturing. So, no go!

The consumer is lip-deep in debt. They cannot take any more debt. Wages are under downward pressure – due to competition from Asian and South American workers. The road sign says, ‘Stop. Diversion ahead.’

The services sector is already over priced and suffers from stagnation. So, who can these banks lend money to. Interest rates and liquidity are not the reasons for this crisis – but rather a case of acute indigestion. Lower food prices or increased food supply will not help a patient with symptoms of indigestion due to over eating.

The auto sector is hanging by a thread … by their nails of a cliff face.

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