As 2008 closes I am happy to report we at AIG have borrowed $127.7 billion from you. This represents 84% of the $152.5 billion you have provided through your generous agent, the federal government, and in particular the Federal Reserve Bank of New York.
To put this loan into perspective, this $152 billion is equal to 63 years worth of budget for the National Park Service. Not a tree-hugging liberal? The loan we have secured would buy 162.7 years worth of budget from those bean counters at the Securities and Exchange Commission. Can you imagine what nooks and crannies those insider-trader-sniffing and Ponzi-scheming peepers could uncover in 162 years?! I’ll bet I wouldn’t be writing you if the SEC had 162 years worth of gumshoed G-men at work.
And speaking of the Securities and Exchange Commission and Ponzi schemes, many an investor who recently lost upwards of $50 billion in Bernard Madoff’s mega power ball Ponzi are asking Just where the has the SEC been?
The past year has been difficult for us at AIG and we sure appreciate the money you have provided to us. The least of our troubles is being named as one of The 10 Worst Corporations by the lefty rag Multinational Monitor.
Your Investments in General Motors, Chrysler and New Money to GMAC
My prediction that automakers General Motors, Ford, and Chrysler would seek and receive more than the $25 billion we initially asked for turned out to be wrong. Well at least in the short run.
After your agent (the government) agreed to provide the automatkers with only $17.4 billion, we got back on track and went for more of your money. In late December the U.S. Treasury agreed to provide GMAC LLC, the finance arm of General Motors, with an additional $6 billion.
General Motors immediately announced it would start making auto loans with this capital infusion. If you hurry, you can run to a dealership and score an interest-free loan to buy a Tahoe. And damn well the loans should be interest free – after all, in this loan, you’re borrowing your own money back from GM.
All those Marxist capital equations are dancing in my head: money/commodity/money. Let’s see: Treasury loan to GM/ GM loan to me/My taxes to Treasury…. Can I really buy a car by lending money to myself? Sure! That will fix Detroit. No Voodoo Economics here.
I wonder what President George H.W. Bush, the originator of the term Voodoo Economics would think of the fuzzy math going on here. (George W. Bush, of course, coined “fuzzy math.”)
Your total investment in the automakers right now? $23.4 billion. I will return to my original forecast and predict your investment in auto will soon top $25 billion.
Your Investments in the Banking Industry
Your investments in the banking sector continue to grow. Last month we reported on your investment in Citicorp. I’m happy to let you know you have made the following purchases of preferred shares with warrants in the following financial institutions: Wells Fargo, $25 billion; JP Morgan Chase, $25 billion; Bank of America, $15 billion; Goldman Sachs, $10 billion; and more in over 200 other banks. Yes, that’s right, you own stock in over 200 banks, an investment of $172 billion.
To recap, we pitched an initial investment of $85 billion in AIG to you (now $152 billion), threw in $25 billion for Citicorp (total banking stock purchase, $172 billion), automakers, $17 billion (now $23 billion) so your stock purchases now total $348 billion!
On a positive note your stock in AIG rallied the last few days of 2008 and ran up from $1.52 to close the year at $1.57 a share. While 2008 may have not been the best of years for AIG 2009 can only be better.
(Twenty years before the passage of the Securities Exchange Act of 1934 to regulate financial markets, swindler Charles Ponzi named his company the Security and Exchange Company.)
While 2008 was indeed a bad year for Wall Street, Goldman Sachs CEO Lloyd Blankfein said it best. After a jittery underling complained, “I can’t take another day of this,” as the two were about to depart their chauffer-driven sedan for another day of round-the-clock negotiation with Fed officials, Blankfein blasted the lad with, “You’re getting out of a Mercedes to go to the New York Federal Reserve – you’re not getting out of a Higgins boat on Omaha Beach. So keep things in perspective.”
So dear investors, Happy New Year!
–John Waters, CEOVisit our website this month to read The Gazette interview with Rep. Ciro Rodriguez (D-23rd District) about his votes against the bailouts. Next month: What the Great Dutch Tulip Bubble of the 1630’s should have taught us, more investments you will have made during January, and why a nation should whine about former Senator Phil Gram, bless his heart. Plus: The First Amendment Bailout! Newspapers have been defending the Constitution for centuries. Maybe its time for Congress to pay for the service? If Congress shall make no law abridging the freedom of the press, maybe Congress can make a law bailing out the press?
