Tuesday, September 16, 2008

Bloomberg: Federal Reserve Considering "Loan Package" to AIG (AIG)

Ever feel like you are standing in front of a leaky dam? A damn with 30,40,50 leaks? And you realize you only have 10 fingers? Welcome to the Jungle. My gosh, I keep using words unprecedented, and historic ... every day is a soap opera now.
  • The Federal Reserve is considering extending a ``loan package'' to American International Group Inc., the insurer facing a cash shortage, according to a person familiar with the negotiations.
  • The stance by federal regulators is a reversal from a position they held as late as last night, and people with knowledge of the talks are ``cautiously optimistic,'' said the person, who declined to be identified because negotiations are confidential.
  • The person gave no timetable for reaching an agreement or estimate on how much money New York-based AIG would need. New York Fed spokesman Andrew Williams declined to comment and AIG spokesman Nicholas Ashooh didn't immediately return a call seeking comment. Treasury spokeswoman Jennifer Zuccarelli had no immediate comment.
  • AIG is searching for capital to stave off a collapse after its credit ratings were cut late yesterday. AIG's fight to stay afloat is the latest tremor to shake the global financial industry, less than a day after Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection and Merrill Lynch & Co. sold itself to Bank of America Corp.
  • Goldman Sachs Group Inc. and JPMorgan Chase & Co. were working with AIG to determine how much the insurer needs, said two people familiar with the talks yesterday. Goldman has helped the Fed appreciate the effects that an AIG collapse would have on financial institutions, the first person said.
Shaking head in amazement at this era

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