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AIG - American International Group


PlanMaestro

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AIG Cuts Wall Street Reliance With Real Estate

http://www.bloomberg.com/news/2012-11-01/aig-cuts-wall-street-reliance-with-real-estate-mortgages.html

 

It’s making sure that we are taking control of the risks we’re going to put on our books, and we can’t rely on the public markets. We have to do direct investment. — Benmosche

 

 

PS: Cardboard LOL, ain't it great?

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The plain and simple is that the stock market is true garbage.

 

You had Amazon.com last week missing on quarterly earnings, sales and Q4 forecasted sales. I should not say missing earnings because they generated losses. The stock went down briefly after hours then up huge the next day. If it had been Chipotle or any other momo stock it would have been down 20%. Incomprehensible. They had to find some excuse for the move so they talked about some mysterious beat on operating margins. I guess it had to be NA adjusted operating margins!

 

I actually think that Amazon is a fraud. If the stock market did not keep it high, they would have to show profits like Target, Walmart, BestBuy or any other retailer. Retailing is still their main business. Now, that the stock market keeps rewarding them just for showing sales growth, they can keep selling product at cost or below cost. Isn't illegal? With the sales tax advantage disappearing and them building warehouses everywhere to shorten delivery times, there is really no difference anymore in their retailing business with other brick and mortar retailers. There are also other issues, but that is for another discussion or thread. 

 

 

I don't want to takeover this thread, but regarding Amazon I would encourage you to read the shareholder letters from 1997 till now and look at the financials. Quickly making judgement based on financials without looking at what the business is investing in makes your quick judgement similar to other short term market players.

 

I won't argue about Amazon more than that. Sorry if I am taking your comments out of context as well. I value your posts on this board.

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ILFC’s Courpron Sees IPO Next Year If Markets Improve

 

Now, with AIG’s own condition improved and some shares repurchased from the U.S. government, the insurer isn’t in a hurry to cut its stake, ILFC President Fred Cromer said.

“The good news is they’re not in a position where they’re forced to go,” Cromer said. “As long as the market is choppy and uncertain and that’s not going to give them what they’re looking for, they can be patient.”

 

 

http://www.bloomberg.com/news/2012-11-05/ilfc-s-courpron-sees-ipo-next-year-if-markets-improve.html

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Interesting.  Goldman just named Mark Tucker a director to its board.

 

http://dealbook.nytimes.com/2012/11/05/goldman-names-new-director/

 

Lloyd C. Blankfein, the chief executive of Goldman, said in a statement: “Mark has broad and deep operating and strategic experience across Asia Pacific, Europe and North America. And, with his nearly three decades of leadership in the insurance and banking sectors, Mark has a proven understanding of effective risk management.”

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Q, Would they (the treasury) have to announce they are selling, or will they just go ahead and start it next week, after the lockup?

 

I think the stock price has been dropping on the above possibility, and the so far, unquantified losses from Sandy and the Nor'Easter.  Once both get Numbers around them things should begin to rebound.

 

Ben. telegraphed last week that AIG was not looking at buying in any more stock, so I am figuring there will be no private placement with AIG involved. 

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AIG keen to sell bank, expand mortgages: CEO

http://www.reuters.com/article/2012/11/12/us-aig-assets-idUSBRE8AB0LK20121112

 

"MORTGAGE EXPANSION

 

Even as it looks to sell off the bank, though, one place AIG is bulking up is in mortgages. The company's mortgage insurer, UGC, has become unexpectedly strong in recent years as competitors have faltered due to crisis-era losses.

 

But Benmosche said AIG would like to go even deeper than just insuring home loans.

 

"We are also now looking at ways we could become direct investors in mortgages," he said. "We are going to do more of our own direct lending, both commercially and residentially."

 

AIG's motivation is the same as for many insurers in this persistently low interest rate environment -- yield. With fixed income portfolios struggling, insurers are hungry for even a few extra basis points of relatively safe return.

 

Benmosche said "it makes a big deal" at the current low rates to get that little bit of extra yield by buying mortgages directly, which is why he said AIG is talking to big banks about buying their non-agency mortgage debt."

 

Not sure if it is a good thing that they start buying mortgage books off the banks. Any thoughts?

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I think they should stick to their core business. I don't like AIG to get involved in bunch of stuff. Ben is not likely to be with AIG after few years. Company will be better off if culture of sticking to core business is ingrained by the time he leaves.

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In the other thread on BB, this link was posted (I also think Plan posted this a while back):

 

http://alephblog.com/2012/07/30/on-life-insurance-and-life-reinsurance/

 

In the article, David Merkel says AIG is a "value trap" and mentions the accounting practices and validating book value.  I gather this guy is supposed to be fairly good, but I haven't seen any specifics and have not seen others mention this as an issue--do any of you folks have any insight?

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life insurance accounting is a quagmire....but that is the nature of long tailed businesses....

 

you gotta take a leap of faith based on what you see. AIG has restructured and we all know it is not the best insurer out there, but the value is there....

 

in terms of disclosure, its all out there....

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