The original $85billion to AIG was provided on a theory that it was an investment to be returned maybe with a profit. This Washington Post article of 24 Oct 2008 describes progress of a company that may have contained only $67billion of equity. US government has already channeled 7% of this nation GNP into the bailout. This first progreess report is distressing:
Quote:
AIG Has Used Much of Its $123 Billion Bailout Loan
The troubled insurance giant American International Group already has consumed three-quarters of a federal $123 billion rescue loan, a little more than a month after the government stepped in to save the company from bankruptcy.
AIG has borrowed $90.3 billion from the Federal Reserve's credit line as of yesterday, the bulk of it to pay off bad bets the company made in guaranteeing other firms' risky mortgage investments. That's up from roughly $83 billion AIG had borrowed a week ago, and the $68 billion level it reached a week before that. The news comes as the company's new chief executive warned Wednesday that the government's financial lifeline may not be enough to keep AIG afloat.
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