Liberty

Yep. That's more convenient than what I did, which was to find a PDF compilation and print all the letters from the partnership and Berkshire. Quite a brick.

For those interested in getting a good idea of how bad things used to be: http://www.amazon.com/The-Better-Angels-Our-Nature/dp/0143122010/

Thanks for posting, interesting article.

Based on the flag next to his name, he or she is in Sweden, so probably not lunchtime :)

You mean that positively or negatively? http://money.cnn.com/2013/04/11/news/companies/moynihan-bank-america.pr.fortune/index.html Can't read whole thing because I'm not a subscriber.. Can anyone give provide a summary for those of us who probably won't buy a hard copy?

The scenario I was imagining was a few years down the road, if they split up the company and end up with, say, 20+ billion from the sale of the non P&C divisions... What are they supposed to do with this much money? Certainly not efficient to keep it on the balance sheet earning little. Buybacks would be great under book, but if by then AIG trades significantly above book, that might not make sense (though as Eric has shown, buybacks even above book can be more efficient than dividends). Some P&C acquisitions might make sense, but that's always dangerous. Increasing the regular dividend could also work, but since this would be a one-time source of cash, once they've burned through they might have to reduce the dividend, which management usually doesn't like to do... So a big special dividend might be what makes most sense, which is why I'm wondering how it would impact the warrants. But then again, if AIG is trading much above book, I might not be a shareholder anymore (that would depend on ROE and whether there's still a margin of safety), so it might not be my problem. Maybe I'm wrong to assume that a split of the company's divisions isn't probable before a few years have passed. I was thinking that they would at least wait to fix the ROE before considering it, but maybe it would make sense to do it before that; they'd get less for the other divisions, but to compensate, they could use that cash to buy back shares in the remaining P&C division below book, so the ultimate per share benefit might be the same as waiting longer for a better price and then buying back dearer stock. Hmm. What about the scenario where they spin off the other divisions and current shareholders get shares in the spun off entities. How would that work for warrant holders? I think it might have been mentioned earlier in this thread, but memory's fuzzy on what was said and I can't seem to find that discussion using the search feature.

It's the first time I hear this thesis. Interesting. Do you have examples of other dual-listed companies that implemented a dividend and saw this "Japan effect"?

I wonder how many of those complaints have to do with Countrywide mortgages. I can imagine how the millions of people who had troubles with those are not saying the nicest things in bank satisfaction surveys.

I know you didn't mean it literally, but if it happens, it could make a difference, and hopefully a positive one if they are smart with what they do with the cash (what counts as smart will depend on their opportunities at the time.. very different if they still trade at 0.6x book than if they are at 1.2x or whatever). Question for those who have read the warrant prospectus with a fine tooth comb: Would a big one-time special dividend count in the dividend-adjustment mechanism?

Thank you for posting.

Hitting 100+ weeks high, warrant is as high as it has ever been. No big news that I can see, except some speculation that a dividend is coming. http://www.bloomberg.com/news/2013-04-24/aig-extends-rally-on-dividend-speculation.html I hope they won't, and will instead keep buying expensive debt and resume big buybacks.

That's kind of my feeling about Taleb; sometimes his ego can get in the way, though at other times it adds spice to works that could otherwise be dry. I guess it evens out for me.

I was going to ask the same thing. I could swear I also saw that very sharp dip in BAC and AIG, but now when I look again I only see a small dip... edit: now the sharp dip is back in BAC in google finance. Weird how it was there and then it wasn't and now it's back.

Thanks guys, very interesting discussion these past few posts.

http://brooklyninvestor.blogspot.ca/2013/04/newtons-apple.html

http://i.imgur.com/cATRgjk.jpg

http://www.economist.com/news/finance-and-economics/21576149-even-if-it-crashes-bitcoin-may-make-dent-financial-world-mining-digital

Thanks for the graph. If you feel like graphing some more, it would be really interesting to see how that compares with other big banks (though the starting point will matter a lot for that, so maybe a table comparing yearly percentages would be better..).

http://www.reuters.com/article/2013/04/19/us-aig-bankofamerica-lawsuit-idUSBRE93I0K920130419

http://www.iii.org/assets/docs/pdf/NYSSA-031813.pdf Overview of P&C industry.

+1

Down 6.5% after earnings http://www-03.ibm.com/press/us/en/pressrelease/40878.wss

Thanks, added both to the list.