AIG

datajunkie9382

This is make believe shit. You must be too young to remember how lazy fair played out in practice. Here is the short version: \+ Rich people buy politicians to remove regulations under the guise of "Free markets" \+ Rich people then do massively stupid shit which blows up in their face \+ Rich people then go back to those politicians with their hands out and say give us money or else \+ Politicians hand over lots of money to rich people to keep things going \+ See Savings and Loan, Intel, Boeing, AIG, Goldman Sachs, Bears Stearns, Citigroup, every mining company to ever exist, California electricity. \+ You can say, "But, but that is not what I want, it shouldn't work like that", it fucking does. Liberal democracy only works in theory, in practice it is a revolving door of hand outs to rich people who control the system. Look at the BBB for the latest version.

atropear

Yes but what they leave out is that AIG was founded by an intelligence operation. And so it probably was still run by it. They were the worst businessmen in all of history if you go by how many times over it went bankrupt.

FarrisAT

AIG?

isinkthereforeiswam

AIG thought they were too big to fail. They were bailed out, but they never recovered back to their glory days. There's always another insurance company waiting to take an ailing insurance company's place.

nostratic

>How do you take into consideration the loooong-term / "end-life” of a stock when investing for retirement? as a general rule stocks rarely stay on top for more than 10-20 years, either top of their sector or top of the overall market globally or for any given nation. Rob Arnott has done some research on this topic. https://ioandc.com/rob-arnott-sell-the-top-dogs/ many formerly dominant companies are now out of business or small cap/micro-caps (Sears; Eastman-Kodak; NL Industries; Foot Locker is the descendent of Woolworths which was once a leading retailer). or companies can be dominant, slip dramatically, and then come back to major positions (Exxon, AIG). Nobody knows for certain.

Humaniac99

How come AIG gets to have 25 bil when they fail and go bankrupt but when i fail and go bankrupt I get collection calls from bank of america

farmerbsd17

AIG

Fragrant_Witness_713

I still wear my Arthur Andersen baseball hat sometimes. And the funny things is that I was on the way to a meeting with them and AIG when the shit hit fan. I was on the Acela from DC to NYC. The meeting got cancelled halfway there! haha

Excellent_Ability793

AIG

Bracer-Phoenix

AIG

ArmedAwareness

Look up a little know stock “AIG” - look at their price right before 2008

Suspicious-Town-7688

AIG back in the day

Fragrant_Witness_713

As a sales pro I have never fully understood its valuation. The only crm tools that actually increase revenue are ones for call centers. Every other industry does just as well with old school CRM and decent excel spreadsheets. I say this as someone who has worked for companies such as IBM Global, Accenture, AIG, etc in high level Bus Dev roles. HAVING said that... good luck

shibbledoop

AIG? They are definitely still around

OrangeOld8947

The company started in 2003, and just went public about 4 years ago mainly focusing on rewiring (faster speed, different kinds of computers and network, and mainly built for companies wanting to actually use AI technology to help their businesses run better and more efficient not run them like the new fads, or that AI is a commodity, LLM’s are the actual commodities, Palantir has the huge American insurance underwriting company AIG, fully allowing AI agent bots pull real time data and being able to offer insurance underwriting claims to potential clients under an hours time when it used to take the smartest MIT or Harvard Grads over3 weeks to collect data, run them through situational algorithms, run them through outlyer tests and situation, and 3 weeks later finally have an underwriting insurance number for them. They retired Cleveland Center Hospitals like they were rebuilt from the ground up and just inked a Billion dollar military deal with NATO! They have no debt, 6 Billion in cash money & the CEO said today that they are having issues keeping up with the demand. Try and buy a few hundred shares and by the time you retire those shares will be worth a couple million! YouTube has a ton of videos trying to explain their technolog, but the video they put out on project Maven & Titan are mind blowing just in the Military fields and the company software can improve any company in any industry! It’s already up in Space with Musk and his Starlink satellites! Palantir made their software so it can be built on and built out, by new coders, or machine learning ones! Their double and triple dipping! RB

DaemonTargaryen2024

> Is there any reason not to buy “safe” individual stocks? GE, GM, Kodak, Sears, AIG… all of these were considered “safe” individual stocks, until they weren’t. > I’ve done a good bit of research and it seems like they won’t be losing value any time soon. Define “good bit of research”. There are seasoned professionals Wall Street analysts who get calls wrong all the time. What skills or information do you have which they don’t? >Obviously something bad could happen but if I don’t have crazy money in individual stocks is there any reason not to buy them? Should I just keep it all in index funds? If you want to use some “play money” at say <5% of your portfolio, that’s up to you. Any more and you’re experiencing significant [concentration risk](https://www.finra.org/investors/insights/concentration-risk)

DaMan619

https://home.treasury.gov/data/troubled-asset-relief-program >As of September 30, 2023, the total amount disbursed for TARP programs was $443.5 billion and OFS collected $425.5 billion (or $443.1 billion if including the $17.5 billion in proceeds from the additional Treasury American International Group, Inc. [AIG] shares) through repayments, sales, dividends, interest, and other income. After considering the interest expense of $13.1 billion, the net cost of TARP programs was $31.1 billion. >>[While Congress authorized $700 billion for TARP, Treasury utilized far less than that. The TARP actual lifetime cost was approximately $31.1 billion, **most of which was attributable to the program's efforts to help struggling homeowners avoid foreclosure.**](https://home.treasury.gov/data/troubled-assets-relief-program/about-tarp). Last part is interesting because Jon Steward would grill politicians why we couldn't bailout the homeowners instead the banks and TIL we did.

WinningWatchlist

Stock will freaking explode if the government lets it leave the conservatorship, most companies that have been bailed out by the government have their growth potential dead (banks being an exception) due to common shares being typically suppressed and diluted (look at AIG's stock price from 2000 to now). So TL;DR Fannie/Freddie Mac will moon because the government will let it be for-profit again.

Individual-Set5722

When was the last time the chickens came home to roost all at once on a single stock? This is reminding me like AIG for some reason.

GnosticWizard

Here’s some other great stock picks: Enron Leman Brothers Worldcom Silicon Valley Bank AIG South Sea Company Barings Bank Bank of United States I’m sure United Health will be fine. Godspeed!

puukkeriro

AIG was subject to a major government bailout that diluted shareholders. Not the same.

H3rbert_K0rnfeld

AIG knows

Careful-Rent5779

I guess you where still in high school or perphaps sporting diapers in 2008. But the government stepped in and kept AIG from going under in 2008. AIG was only a property insurer. NOT the largest healthcare insurer/reinsurer in the the US. History doesn't always repeat itself, but it often rhythms.

Careful-Rent5779

Google: AIG 2008....

Careful-Rent5779

UHN is not going to die anymore the AIG did.

liverpoolFCnut

It doesn't matter who the President is. Every one of these multi-billion dollar companies, especially the "too big to fail" ones always get away with just a slap on the wrist. What happened to the C-level of Bear Stearns, AIG, Morgan Stanley, Lehman Brothers etc? Or for that matter Wells Fargo more recently? They'll pay the fine and move on.

rriggsco

So which ones are Bear Stearns and AIG?

redditmodsRrussians

AIG II: Luigi’s Revenge

ArmedAwareness

AIG was “to big to fail” too, I mean they got bailed out by the government but just look at their chart lol

Objective_Chest_1697

The one constant is change.  Top 10 US Companies in 2005 (by market cap): Exxon Microsoft, Citigroup, GE, Walmart, Bank of America, Johnson n Johnson, Pfizer, Intel, & AIG- yes AIG Only Microsoft remains.  The top 10 companies with the best 10 year returns are posted below, and the results were pretty surprising- only two or three known names, at least to me.  Many were pretty mundane (as far as business category goes) and surprised me. I would assume all tech, and that wasn't the case at all.  https://finance.yahoo.com/news/best-performing-stocks-over-past-211922467.html

Modo44

Sometimes you actually know the shitstorm is coming. Like when Goldman tricked AIG into insuring its shit subprime business, just intime before it hit the fan.

Bekabam

Majority of this thread is delusional on UNH. You think AIG was too big to fail in '08? Not even close to the scale of UNH. If UNH shutters, people don't lose their house or their jobs, they will die. * Claim denial rate goes to 100% * Hospitals may cover some procedures with the expectation of a bailout, but not everything * Optum would close too, dropping Rx fills Look, society hates them, doctors hate them, and I hate them but that doesn't matter. In the current system, they are entrenched and they will be propped up faster than anyone else if they start going to shit.

byzantinetoffee

Ok, but look. To cite just one of many likely effects, it seems realistic to assume that tariffs will negatively impact revenues for businesses both large and small, in a number of ways. This is likely to lead to layoffs, which is likely to lead to people selling assets, not investing in 401ks, and so on. Eventually enough money is withdrawn from the markets that it has a cascading effect. Look at the GFC. There was basically a yearlong buildup before it was simply too unsustainable and the house of cards collapsed with AIG and Lehman etc. The point is that the stock market cannot remain disconnected from the economy forever.

OmahaBuff

[https://images.app.goo.gl/yzXNLJLjE1umKP6x7](https://images.app.goo.gl/yzXNLJLjE1umKP6x7) Mostly it was a death by a thousand cuts with a few major drops. In first quarter of 2008, most did not know what was coming. The news just kept getting worse, between the prime mortgage issue and AIG, people losing their homes because the rates jumping so quickly on their ARMs. I saw a comment about company raises, but I worked in tech and we were already there because of the dot com bubble, The 90's were great but not after Y2K, 3% or less from that point on. One's perspective really came down to how secure your job was and could you ride it out. I think that will be true of all downturns.

buried_lede

Not surprising. Most anyone who was not in a coma  knew there was a ridiculous housing bubble that was going to pop. What I didn’t know and probably most didn’t know was how extensive it was going to be. Old investment banks synonymous with Wall Street closed for good -it was unthinkable. AIG’s entire value leveraged out of its London office. Wow. It was shocking. Opening the WSJ and seeing SP 500 company trading for $1 a share and less. Wondering if you should buy it all up or if more were going to just go out of business or if you’d have a job yourself. Jobs literally evaporated. Congress extended in employment benefits for —I think it ended up being two years, and people needed every bit of that. Republicans in Congress were colder than they are now, btw, they were vicious about cutting people off and blamed them.  Laid off Wall Street bank employees, highly paid, AVPs, VPs, not unusual for them to leave the field  —no choice —and drive limos  or start small businesses. It was brutal 

KoreyYrvaI

Not enough of them have seen what a year did to AIG stock. I was there, I remember laughing about buying AIG stock for $1 just because a year prior it was $1k a share. I never expected to see AIG over $10/share again.

MaikeerBet

One lasting memory is of me being in New Hampshire, enjoying the fall colors for the first time, and basically off the grid for the weekend. The hotel had a copy of the *Wall Street Journal* in the lobby on Monday morning, and it had this huge headline (September 15, 2008): **Crisis on Wall Street as Lehman Totters, Merrill Is Sold, AIG Seeks to Raise Cash** I kept a screenshot of that front page of the newspaper to remind me of that crazy and financially scary time.

vergorli

I was 18 at the time, so I only got the News (Germany). Until Oktober 2008 you basically only heard about a weird bank (Bear Stearns) going bancrupt, what didn't exactly fill the news. Then suddenly Lehmann was bancrupt. It hit Germany like a comet, we had news all over the place. I remember one particular yt scene really good : Dirk Müller telling, that we have. a 70% Chance of everything that is part of the financial system going to shit. (I don't like Dirk Müller, I just watched him at that time). Years later I knew he was telling about the AIG swaps for the CDOs that were basically a worldwide financial nuke. Originally I wanted to go work after graduating. But I lost my already accepted job at BMW at that time and went studying university. Retroperspectively it was a really lucky event for me.

Subject-Creme

This is the data I get from AI, after several proms: Date; Event; S&P Close; %Chg; Fed Rate 2008-01-30; Fed cuts rate to 3.00%; 1378.55; +1.79%; 3.00% 2008-03-18; Fed cuts rate to 2.25%; 1330.74; +4.24%; 2.25% 2008-03-24; JPMorgan acquires Bear Stearns; 1352.99; +0.91%; 2.25% 2008-04-30; Fed cuts rate to 2.00%; 1385.59; +1.75%; 2.00% 2008-07-11; IndyMac Bank seized; 1239.49; -1.13%; 2.00% 2008-09-07; Fannie & Freddie into conservatorship; 1267.79; +2.05%; 2.00% 2008-09-15; Lehman Brothers bankruptcy; 1192.70; -4.71%; 2.00% 2008-09-16; Fed loans AIG $85B; 1213.60; +1.75%; 2.00% 2008-09-29; House rejects bailout plan; 1106.39; -8.79%; 2.00% 2008-10-03; Congress passes $700B bailout (TARP); 1099.23; -1.35%; 2.00% 2008-10-08; Fed cuts rate to 1.50%; 984.94; -5.74%; 1.50% 2008-10-13; Global bank bailout plans; 1003.35; +11.58%; 1.50% 2008-10-15; Market crashes on recession fears; 907.84; -9.03%; 1.50% 2008-10-28; Oversold rebound optimism; 940.51; +10.79%; 1.00% 2008-10-29; Fed cuts rate to 1.00%; 974.51; +3.61%; 1.00% 2008-11-25; Fed launches QE1; 857.39; +6.47%; 1.00% 2008-12-01; NBER: Recession began Dec 2007; 816.21; -8.93%; 1.00% 2008-12-16; Fed cuts to 0.00–0.25%; 913.18; +5.14%; 0.00–0.25% 2009-03-09; S&P 500 hits bottom; 676.53; -1.00%; 0.00–0.25% 2009-03-10; Citi says profitable, market rebounds; 719.60; +6.37%; 0.00–0.25% 2009-03-18; Fed expands QE1 by $1.15T; 778.12; +2.09%; 0.00–0.25% 2009-03-23; Treasury unveils toxic asset plan (PPIP); 822.92; +7.08%; 0.00–0.25% 2009-05-07; Bank stress test results; 929.23; +1.74%; 0.00–0.25% 2009-06-01; GM files for bankruptcy; 942.87; +2.58%; 0.00–0.25% 2009-07-15; Intel earnings beat; 933.07; +0.36%; 0.00–0.25% 2009-08-25; Bernanke reappointed; 1028.00; -0.10%; 0.00–0.25% 2009-10-15; GS & JPMorgan strong profits; 1096.56; -0.81%; 0.00–0.25% 2009-11-06; Unemployment hits 10%; 1069.30; -0.26%; 0.00–0.25% 2009-12-31; S&P closes year strong; 1115.10; +0.85%; 0.00–0.25%

Accomplished-Cow-234

>People were handing over the keys or would just stop paying and waiting to be evicted. And until they suspended mark it to market rules, many banks didn't want to take possession because the asset side of their balance sheet would be wrecked if they did. >People were selling any kind of extra items or luxury goods. Boats especially, but also recreational vehicles, sports cars, jewellery, high end audio gear, collectibles, sports memorabilia, artwork. It was so bad American's started buying actual cars again. > Congress was working nights and weekends approving basically any kind of spending or bailout plan that had been cooked up during the day. Remember the debates about the Paulson Plan vs. Traditional recapitalization (government ownnership) and the cries of "socialism", especially once Obama was in office, people called GM, "government motors". Obama, to his credit, relinquished government ownership pretty damn quick. The feeling that we were close to the edge of something wasn't an illusion. If the government had late AIG default on its obligations (primarily through Credit Default Swaps IIRC), that would have been the ball game. AIG owed everyone money, and everyone who was owed owed other people. Everyone was smart and had netted positions so they were sure to make money just so long as the provider of the CDS didn't default. There was no central clearing house for the swaps so people didn't know who they were ultimately relying on or what their exposure was. It was pretty grim, but a great learning experience for a just graduating econ student.

roguehunter

The last missing and very important piece of the crash was the role of AIG. Fixed income investors and banks had massive CDS (single name and index) positions and AIG couldn’t cover the insurance when it was time to pay. This added to the liquidity crunch across uncorrelated asset classes (BSL TLBs, CLOs, IG HY).

mikeumd98

You are misremembering. Period 1, oh shit things are getting squirrelly and that was mid to end of 2007. Bear hedge fund fails, BNP starts blocking withdrawals from their hedge funds, and then we go into a recession. Beginning 2008 is where the real fun starts. Fed cuts rates 2x in 10 days in January, Bear is a fire sale , Freddie and Fannie are nationalized, then Lehman fails, AIG fails(too big to fail). September 2008, Hank Paulson comes up with TARP. WaMu fails. Beginning of October Dow falls 20% in a week. November 2008 the Fed starts buying everything. There was a time during 2008 you did not know if Citigroup, JPM, Wells, MS would even exist the next day. Many large, profitable companies were down 80-90%. For example look at a 20 year chart of Citigroup (C)

brandonmiq

This isn't really an investing story per se, but it is relevant to the aftermath. I had been out of college for like a year, it was 2008, and I had gotten a job as essentially an events coordinator for a fun team building company. Really cool interactive events with plenty of corporate clients. We would plan their events and parties, some very elaborate. I was young and not paying a ton of attention to securities markets and didn't really understand what was happening to the mortgage bond markets in particular, but it was christmas time and we had holiday parties to DJ and run. One of our clients was AIG, who had just taken bail out money from the TARP fund that the government had established to prevent a domino effect on bank failures. We required all events to pay a 50% deposit in advance to secure the event, allowing us to staff and arrange our events, etc. This was all standard and part of the contract for every event, so when our point of contact at this institution called to cancel the party, I informed them that the $50k they'd paid in deposit had already been spent on the event and was nonrefundable. If they wanted to cancel, they would have to forfeit that money. The next day they told me to move forward with the party the following week. A week after the event, the newspaper in the city, a major outlet, published a story that this financial institution had taken bailout money to throw a party. The next day, all our major corporate clients canceled their Xmas parties. 2 months later I was out of a job. I lost my apartment and had to live in my car and/or couch-surf for a couple months until ultimately deciding to move states to a place with a lower cost of living.

spaceneenja

Which is why Apple will hedge that facility and the value of its output with a hefty insurance policy. M Hope you’re ready for AIG to go bankrupt again.

SnooLobsters8382

Wasn't he highly controversial at one time? With the Insider Trader allegations, Salomon Brothers Scandal, General Re and AIG Fraud Case, Trident Mortgage Redlining Settlement (his company had to pay out a $20 million settlement over discriminatory lending practices against persons of color), Homeservices of America Antitrust Verdict (Inflating Real Estate Commissions), and honestly the list could go on. This man has been held liable and found guilty of abusing every loophole he could and got caught multiple times across multiple companies. Why are yall boot kicking him and praising him like a God? If he was a Transformer the man would be dubbed the biggest 'Decepticon'

fuglysc

lol..."an excellent money manager" is understating it...it's like saying Michael Jordan was an excellent basketball player And to insinuate that he attained his wealth by simply living a long time or being born white and at the correct time in history is one of the worst takes ever...how many people were born white and at around the same time as him? And of those hundreds of millions of people, how many Warren Buffett-esque men with similar achievements have there been? And lastly...Buffett was the richest person in the world before the great financial crisis...you implying that his wealth was somehow fortuitously aided by a couple of eventual government bailouts is so nonsensically stupid...you do realise he "saved" BoA and Goldman before the government stepped in by giving them billions each as a lifeline? Without him, they could easily have collapsed...he was even asked to bail out AIG but he passed on that He made around a total of 10 billion on the Goldman and BoA bailout deals when he was already worth 50 billion or so...without that extra 10 billion, you think what? That he would never have gotten to where he was today? And why shouldn't he be rewarded for keeping them afloat before the government stepped in? The fact that he had the dry powder to bail out these banks when the economy was on the verge of collapsing is all the proof you need that he is the greatest investor ever

Crocodile900

I did that, and reached a simple conclusion: They all thought their swaps from AIG will pay them all, and guess what, this what the bailouts achieved, with Uncle Sam taking over the company until he collected his bailout back.

Bostradomous

Your position is woefully ignorant. Credit default swaps and mortgage backed securities are INVESTMENT PRODUCTS that pension funds, IRA’s, 401k, individual investors, institutions all own. Sure, AIG played a large role, but the idea that you are trying to lay all the blame at AIGs feet is simply moronic and shows you have little to no understanding of the crisis and how the financial industry works. This reads like you watched a 15 minute YouTube video on the crisis and they must’ve talked only about AIG. Somehow you blame AIG for the fact that every single large investor and institution owned MBS’s and they all owned shit tranches of MBSs. You don’t blame the mortgage bankers who made the loans to people with insufficient credit. You don’t blame the investment bankers who spun off bad debt into high-grade MBS. You don’t blame the ratings agencies who refused to downgrade the debt from AAA (despite the debtors being in default). You don’t blame the banks who KNOWINGLY and WILLINGLY spun debt of bankrupt creditors off their books and sold it to others as AAA rated credit. You’re literally a shill for the credit rating agencies if I didn’t know any better 😂. There’s so much info out there on the crisis, educate yourself

Crocodile900

AIG did business with every major financial institution in 130 countries. When a bank makes a loan to another bank or a company, they insured those loans, if they went bankrupt, banks will be forced to come up with capital, AIG was the mother of all bailouts.

SPQR0027

It took until December '08 and three rate cuts for the Fed to finally get to zero % after LEH & AIG. But we're talking about two mutually exclusive scenarios with GS. In our timeline where Buffet invests $5B followed by the public raise, then Goldman didn't need the TARP $10B. In an alternate timeline where Goldman gets the TARP $10B first, they don't need Buffet's $5B. Fun stuff. But yeah, GS would not have lasted without cash infusion.

dopexile

From what I recall Goldman was basically insolvent... they changed FASB accounting standards from "mark to market" to "mark to myth" to allow them to pretend their toxic mortgages were not worthless. They had significant assets with AIG as their counterparties, who were 100% bankrupt without taxpayer bailouts. The Federal Reserve also set interest rates to zero and bought all kinds of toxic assets to prop those autists up.

AccordingIndustry

Like a bank going under. That’s what GFC was if a firm like AIG went down without a bailout.

Ashamed-Status-9668

"AIG failed" They didn't because the government stood them up. AIG continues top operate and has paid back all the loans with interest. I think that is the cusp of this question. Is Blackrock an AIG.

YoupanicIdont

Before the government stepped in, yes, we were bracing for a complete collapse of the financial system of the USA. I worked (still do) in financial services in downtown NYC. Everyone knew that Citi was going out. Bank of America to follow. Wells was well and truly effed - probably would collapse once the ball was rolling. AIG, Lehman, Bear and hundreds of small banks were already toast. One investor I knew told me he had his book out and was buying in Feb 2009. He was all in on FITB. It was like $3/sh. The divvy alone today is $1.48. If he held, he gets a 50% yield every year. Once the government announced it was a backstop, it wasn't clear skies, but we knew we were not collapsing. I still wish the government had wiped the equity holders out of all the trash banks and insurers and recapitalized them, but the ancient wounds have healed.

daviddjg0033

 If there was no bank and auto bailout we would have been in a second Great Depression. We have an administration that is imposing Austerity during a self-inflicted economic downturn. I foresee auto loans becoming a crisis. Banking deregulation (sounds familiar) allows banks to hold less reserves. Add this to Trump talking about firing the grownups in the room (Powell) and we have a correction. Normally we test the 200d sometime after an election. we are more likely going to experience our first depression since the 1930s. The Fed will inject liquidity into the market (and if we do QE we could print more money than ever) if the banks start to fail. Too big to fail companies like AIG (reinsurance) JPM (banks) and others will be asking, hat in hand, for the largest bailout in history. Meanwhile, we are actually spending MORE than we did under Biden, and expecting less in taxes DURING wartime. This is a sin to cut taxes for the rich when the barbarians are knocking at Europe's door. Buffett sold/trimmed Apple because of geopolitical tensions. I believe he was right to do so. What companies are on your list of "too big to fail?"

Apprehensive_Bit2685

Was it Obama who bailed out the biggest banks like AIG and Fannie Mae after the 2008 crash by giving them free money? I can’t remember but I do remember Michael B got rich from it.

TheBelgianGovernment

No company is too big to fail. The Medici bank failed The VOC failed Texaco failed Enron failed. RBS failed Lehman failed AIG failed

JustInChina50

Yeah, but those months waiting for AIG to be bailed were not nice.

RandomGuyNamedChris

Back in 2008, we had AIG do the same move

H3rbert_K0rnfeld

Enron has entered the chat. So has AIG. Truth is no one knows shit about fuck.

DoinIt4DaShorteez

Usually a death spiral. Notable exceptions: AIG C PCLN DEA is none of those.

ValuableRuin548

Ah right, AIG all over again

mejmag

Surely there must be at least a couple of big financials that aren’t bulletproof, and are currently teetering on the brink. Like AIG, Lehman Bros were. Word gets out and the first to hear are the first to act.

Ok_Rabbit_8808

 Barely moved after 6 weeks, could’ve bought puts on AIG and made money between 4/4-4/6

SamHenryCliff

The US economy is a 747 cruising at 35,000 feet right now and we just lost one of four engines with number two sputtering. It’ll maintain for a while even after that one goes (tariffs hit spending hard). Then number three is when the inflation moves into stagflation. Number four is going to take a while but mortgages and consumer debt being what it is, the pilots are shitting themselves because it’s not an if this thing crashes, it’s when and where. I was working on Wall Street during the 2008 collapse. In bonds. Got mentored by a legit asset manager w/ $6B portfolio of government fund and saw what AIG, Fannie and Freddie did and while what we’re experiencing is of similar scale, the timing is way, way different. For further reading this is my article over on Medium for anybody who might be interested: [How the 2025 US Financial Crisis is Different than 2008](https://samhenrycliff.medium.com/how-the-2025-us-financial-crisis-is-different-than-2008-5b63bdd06067) Free to read, available for writing work covering this situation but also have stakes in the game and a long term plan to get into position when the real collapse comes around. Ain’t gonna tip my hand yet. Once I’m there you can bet your ass I’m going to talk up my positions like Muddy Waters or Hindenburg.

Foreign-Age9281

The world screamed bloody murder when we let leahman brothers fold. Other countries called us reckless and obtuse to the ramifications it would have to the worlds economy. The world couldn't even afford to let AIG fail. To keep it from failing, we had to play shell games with banks and infuse ALL of them with cash so the world wouldn't know which ones were vulnerable. Which would have caused a catastrophic run on banks coffers globally. Those are companies that couldn't fail without out tumbling the global economy. Imagine if the ONLY government with the ability to bail those companies out fails? Again you got some pretty bold thinking going on.

LifeAfterHarambe

Heavy emphasis on the word appeared. They were very much complicit, especially in 2008. Look how Paulson treated AIG, making them pay his former employer, Goldman, 100 cents on the dollar after he was appointed Secretary of the Treasury. America is blinded by partisanship, choosing to fight their neighbor over Red v Blue or Right v Left, while the people who are paying to deepen this divide are making money hand over fist.

Francesca_Italia

hahaha, no, these are new Goldman geniuses. Actually if you knew the whole story about what they did in 2008, they should have been getting bailed out of prison instead of losses. Supposedly, there was some pretty shady shifting of losses off the Goldman balance sheet and into a controlled but not owned fund that saved Goldman's rear end. They blamed AIG, who underwrote most of the credit default swaps and who also needed to be bailed out lest both them and Goldman would go down.

H3rbert_K0rnfeld

Did you tell people to buy AIG in 2008 and then DCA down in 2010?? It should be about time horizon not wealth protection. /s

Stinksisthebestword

Wait so the government shouldnt have "bailed out" AIG and the other institutions integral to the financial system and put us into a depression? Unemployment already went to 10% and markets down over 50; if they didnt do that it would have been even worse.

TopEmploy9624

People amazed that there are days up when the world economy is tanking should look at charts from 2008. Even at the height of the crisis, in September 2008 close to half of trading days finished in the green, despite the bankruptcies of Lehman and WaMu, Merrill Lynch's forced sale, AIG getting seized by the fed, etc.

xxlordsothxx

I lived throught the 2008 crisis and it felt worse to me. I was young and had no money to invest in the market but I was worried for my job and the overall economy. The problem back then were bank failures and mortgage defaults. I mean even AIG needed a bailout. Lehman failed. I think every single large bank outside of Goldman needed a bailout. Now we look back and say oh yeah people just acted correctly and it was fixed, but back then there was no guarantee that the government's plan would work. There was opposition to bailouts initially. I mean who likes the idea of taxpayer money going to JP Morgan to save them from their own mistakes?? Ultimately it had to be done or the whole financial system would collapse. I think we got close to people being unable to withdraw money from their banks or get a loan. It was apocalyptic. I was a few years out of college where I had learned about moral hazard and financial crisis and I knew what was happening had the possibility of being catastrophic.

Puzzleheaded_War6102

It can absolutely go negative, that’s when bailouts come into play. Look up AIG 2008. We literally made people shorting the market whole with tax payers $$

CryForUSArgentina

The people who make money catching the falling knife generally have metal mesh gloves in the form of government guarantees. Remember what happened with the AIG bailout the last time.

saperetic

No. If you knew how to calculate risk-based capital for P&C, you'd know that $334B is overkill for GEICO's potential exposure. Putting this idea into the context of catastrophic events (ignoring AIG's malfeasance leading to the 2008 crisis), the most a single insurer has paid out due to a natural disaster has been $3.8B (State Farm) due to damages caused by Hurricane Katrina. Only during 2024 has GEICO become over 50% of Bershire Hathaway's total insurance book.

H3rbert_K0rnfeld

AIG has entered the chat.

EnvironmentalBus9713

I still have that AIG I bought in 2008. It's been doing fairly well this year.

pursuitofhappy

I made like $8k in two days buying low AIG and Sally and Freddie Mae only to get fired when I bragged to my boss since I was fucking around the stock market too much instead of doing my job.

CarrotAwesome

No, we arent in a similar scenario. Consumer spending and corporate profits are still holding steady. Banking is fine. Unemployment isn't in the double digits. This is not another 2008 financial crisis. Banks collapsed, AIG had a $180B bailout. Interbank lending completely froze. Global credit shut down. Institutions literally couldn't pay people The FED had to literally step in and create emergency lending programs to keep business operating. The current situation of tariff uncertainty is a speck compared to the magnitude of what happened in 08. This isn't a systemic credit or banking crisis. Totally different landscape.

Ok-Efficiency-5728

AIG CEO, "It feels like we're in a new environment" no shit bruh.

CarlosDangerWasHere

Was that when Lehman news hit? or AIG? Didn't trade during that time but remember it so would be great to hear firsthand account of someone trading how it led up to the event...

Gloomy_MTTime420

Here’s a few. 1/8/25 UAV Corp. (UMAV) Further Reduces Authorized Shares to 500 Million https://www.globenewswire.com/news-release/2025/01/08/3006627/0/en/UAV-Corp-UMAV-Further-Reduces-Authorized-Shares-to-500-Million.html 12/30/24 UAV Corp’s (UMAV) Skyborne Technology to Build “SKY” Hangar at Its Costin Airport https://stateaviationjournal.com/index.php/state-news/florida/uav-corps-umav-skyborne-technology-to-build-sky-hangar-at-its-costin-airport 12/2/24 Skyborne Technology, Inc., a UAV Corp Company (UMAV) and Atlantic Industrial Group Inc. (AIG) Announce AI Manufacturing JV for VTOL & Lighter than Air Vehicles https://www.globenewswire.com/news-release/2024/12/02/2989581/0/en/Skyborne-Technology-Inc-a-UAV-Corp-Company-UMAV-and-Atlantic-Industrial-Group-Inc-AIG-Announce-AI-Manufacturing-JV-for-VTOL-Lighter-than-Air-Vehicles.html I found this one interesting about INI/Stark Aerospace.. 9/21/22 UAV CORP (UMAV) TO DEMONSTRATE ISRAEL AEROSPACE INDUSTRIES, LTD.’S HD CAMERA SENSOR PAYLOAD ON UPCOMING TEST FLIGHTS https://news.futunn.com/en/post/19740311/uav-corp-umav-to-demonstrate-israel-aerospace-industries-ltd-s?level=2&data_ticket=1743224376912130

demoncrat2024

Buy whatever tanks, spread it around, and hold with diamond fists. AIG sucked Genworth, JP Morgan, etc. made up for it.

Accomplished_Rip_362

AIG did not go down because of the housing market. AIG subsidiary in London was selling CDSs and CDOs thinking it was free money. Those trades made huge money but they had huge counterparty risk. When the counterparties (Lehman etc) got into trouble, that's when AIG also had to be bailed out. Ask me how I know this. Or better, don't.

WonderfulBedroom881

I went through the AIG AGF disaster in 2008. To springleaf to whatever it is now. salary at 80 hours a week to make the sale. Friendly enough with the CFO of corporate at the time. Fly on the wall was not fun. Good luck brother. https://preview.redd.it/vj839sygn8re1.jpeg?width=887&format=pjpg&auto=webp&s=098765fc5186bbf0a4e18e38bbe3f34468029377

throwaway_0x90

The housing crisis of 2008? - https://finance.yahoo.com/news/best-worst-stocks-2008-crash-205844396.html > _"On the other side of the equation, three of the worst-performing stocks in the S&P 500 in 2008 were American International Group Inc (NYSE: AIG), XL Group plc (NYSE: XL) and Genworth Financial Inc (NYSE: GNW), each of which declined between 88 and 97 percent in 2008. The common thread among these three names is easy to spot. They are all insurance companies that had major exposure to either the U.S. housing market or the housing derivatives market."_ So clearly buying well-timed puts or any Inverse ETFs of these would be the way to go.

Sintzes

I guess it is debatable if an annuity at AIG would have gone under without the bailout or if another company would have come in and bought the annuity division under AIG that wasn't underwater. I can see that you don't like athene due to their investments. Just curious if you feel that way for just athene or all annuity companies? And sure people can do their own investing similar to what the annuity company does, but thats going to take a lot of knowledge and money. There are not a lot of successful option traders, but Ill admit there are some. Just a bit too time consuming and over the head of the average investor. Not to mention power of scale and spreads of trading multi millions vs a 100k account. I think thats kinda my point. Let the annuity company take the risk of running the investment, while the investor mostly needs to just be comfortable with credit risk via ratings and rely on the history of contracts being run and bought/sold correctly between companies. For the history of actual risk and returns it seems like a decent option. Not the only one for sure, but a decent one

slider5876

Aig would have led to losses without the backstop. I wouldn’t bet my retirement on government bail outs. Most of them are equity linked structures. You can do the exact same thing with identical payout structures without taking the extra credit risks. The private credit stuff they’re dumping in annuities is an entirely new ball game. And Apollo isn’t going to be a gsib like AIG. Why would you take a risks that you don’t get paid for taking?

slider5876

AIG didn’t go belly-up?

slider5876

The big issue with annuities is the credit risks with the insurer. They are taking your money and investing in all sorts of things behind the scenes. Then usually buying and selling options to give you a linked return to something. I guess I’m old enough to remember AIG hiring a bunch of French quants (a quant trader joke) and getting talked into doing a lot of trades that all eventually blew up requiring a bail-out. There is just no good reason to take that credit risks.

slider5876

This is a bit like saying do you think AIG should be writing life insurance policies on a 2-pack a day smoker. It’s the money laundering bit that makes him a very high risks customer to the bank. I don’t know the solution. I would assume the bank can’t liquidate his stock. He should be able to get paper versions of his stock certificates. Buy and hold forever lol.

Howcanitbeeeeeeenow

They survived in zombie form by taking a bunch of government money and then sued the government for too high of an interest rate. Then they rebranded as Chartis because their reputation was sullied. A few year later they said “fuck it” and they just went back to AIG because no one cared anymore.

Howcanitbeeeeeeenow

Upvote because I started my insurance career there and was walking around NYC with an AIG umbrella when they were public enemy #1. I even held a few shares through their employee purchase plan. They didn’t do very well as I recall.

Slotstick

Very interesting read! This sounds very similar to SVB regarding the HTM securities portion. Please correct me if I am wrong, my understanding of your comment is: 1. That banks are carrying large losses that if were marked to market would show they are insolvent. 2. The current environment is shaping up to push rates higher while the politics try to push it lower. 3. The bond market won’t take this paper at these lower rate. I worked with IRS, CDS, CDX and CMBS for many years. I agree that, similar to AIG, the amount of leverage out there may really exceed the banks ability to lend. One of the commenters below said the whole theory is predicated on the ability for the market to accept lower rate paper to refi. I think most agree the market won’t buy at 4.1/4.2, but the part that I was confused about is how that triggers the subsequent issues and making the dollar trade profitable. In theory, the HTM book could be held and then there is no asset impairment and the banks are fine. That just becomes a waiting game assuming they can avoid any bank runs. Does the dollar trade require the bond to be sold at that lower rate or would inflation with geo political risk increasing get you to the same point? I’m not certain yet that the administration can force rates lower without Powell abdicating his responsibility. Do you see a scenario that they could? As a side note, I was thinking while writing this what’s the negative to decreasing rates. I am just thinking out loud as a thought exercise. In theory, it should cause inflation to take off. We have seen scenarios where it doesn’t, but I think most agree that if we were to lower in the current environment it would be very inflationary due to the protectionist policies being levied. This would obviously hurt the middle and lower class, but is that enough to hurt the economy in a significant manner? The middle class has been largely eroded in my opinion and there have even been some reports (albeit I have not checked their accuracy) that spending is occurring at the top 10% bracket and it makes up for the majority of consumer demand. If that is true, then it has implications for the banking sector and this analysis. It would imply the banking risks are concentrated to policies that affect that top group and would see minimal impact from policies at the cost to the lower classes. Which I think largely aligns with what the current admin is doing. I am trying to figure out the end goal for the current admin to formulate a plan so maybe this word vomit on my part has no traction. Figured I’d throw it out there and see what people’s thoughts are.

Neighboor

Did this on AIG and Citi in 2008 - still paying off those 11% private loans

ivegotwonderfulnews

I was a fin analyst in the insurance world and the bear really started in 2007. Up until Oct 2008 it was a pretty orderly bear market. Then the bottom fell out when Bush went on TV and told the world the banks needed $700 billion or it would be a Great Depression. It was jarring. That when the forced selling started. The entire financial system started to deleverage and with counterparties being of questionable quality there was zero trust and required collateral. It was a full unwinding. Obviously the consumer got whacked as the housing bubble unwound and the money/liquidity dried up. Companies cut jobs to the bone. Banks failed. AIG failed. Fannie/freddie nationalized. It was stuff no one ever imagined possible. What we have today is nada in comparison But for equity investors it was 2009 that was the worst. I watched tons of smart folks declare a bottom in each massive spike down in 2008 and put money to work but by Feb 2009 stocks that were cheap at $12 in Dec 2008 were $2 in Feb 2009. It was the last few months where the “smart money” started to give up. Then one day it bottomed (sp500 666 lol) and that was it. Done. Nothing special that day just exhaustion and literally no one thought the bear was over. So what’s the tldr? 1) If this is a moment to panic a la 2008 sell early because you will be very temped to sell when shit really gets going. 2) be very cautious about putting money to work to early. And if you find you did put $$ to work to early don’t sell it despite being down 50%.

CallMeMoth

I'll agree that dollar cost averaging into broad based index funds over decades is a proven successful investment strategy. Part of why it works is that you're not exposed to single stock risk. It's not only meme stocks that go down and never come back. Here are just a few examples of stocks everyone used to think would never be a long term bad investment, but they were: LEH, WAMU, AIG, C, NOK, BB, GE, SHLDQ, JCPNQ, BLIAQ, LU, JAVA, PALM, GRPN, YHOO, CHK, PCG... the list goes on and on. If you were unlucky enough to average down on any of those stocks you would have lost most or all of your money. There's a reason professional traders do not average down and only add to positions when they go up in price and setup again. Can you get away with averaging down? Of course. But it's a fools game and you will eventually lose. Why risk it?

GMEVISIONARY

$AIG update: Was up 105% on these the other day & Didnt close cuz the whale that spent 0.71 per con hasnt touched their position since December. Consolidating while the Moving Averages play catch up is healthy. Sidways trading while everything is down 69% is healthy. [detailed](https://x.com/GMEVisionary/status/1897965339268251910?t=B4y5VgVtG13qm8C0MMBSbw&s=19) post here

whoamitosayanything

You are cherry picking one stock , mastercard and back testing based on that. What about the 100 others that hit an all time high and then went bankrupt. Why dont yoh back test based on Enron, Lehmann, AIG

Jeff__Skilling

Add in AOL, Enron, and AIG if this question was asked 25 years ago