20080917

Wanna buy an insurance company?

AIG, the second largest public insurance company, is selling itself off for parts. The Feds bought 80% of their stocks for $85 billion, which AIG immediately lent to itself, giving it $170 billion to work with (I'm not really sure how that's not fraudulent), and are now paying something like 30% interest on the loan, so they said they need to sell off their services. So they've put up their aviation department, casualty insurance, life insurance, and property insurance departments up for sale, along with a few smaller business units, which they said they will sell for and "reasonable price." They're hoping to pull $150 billion dollars, use $85 billion (plus interest) to pay off their loans, buy back $48 billion worth of their stocks (80% of the remainder), and give back the other $12 to the shareholders, who just watched their stock drop from $62 in January down to about $2 and dropping by the minute.

I am tickled pink. I've thought the stock market was a ridiculous idea from the moment I learned about it in high school economics. I'm going to get hurt by this financial crisis, of course, but not NEARLY as much as the people who have bought into it. The only investment I have in the stock market is my 401 (k), which is worth about $1,500. Currency isn't an actual object; it's a unit of measurement, and comparably I'm getting wealthier and wealthier the longer this crisis continues.

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