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To: c.hinton who wrote (1926)	9/17/2008 12:53:00 AM
From: c.hinton	Read Replies (1) \| Respond to of 3816

Federal Reserve bails out AIG with $85bn loan By James Quinn, Wall Street Correspondent Last Updated: 1:38am BST 17/09/2008 The future of American International Group appears to have been guaranteed after high-level talks resulted in the Federal Reserve being on the verge of agreeing to extend an $85bn bridging loan to the troubled insurance giant. American International Group is the world's largest insurer with a £1,000bn balance sheet The talks, being led by the Federal Reserve Bank of New York, but involving bankers from Goldman Sachs, JP Morgan Chase and Morgan Stanley as well as the company itself, appeared to have concluded that the Fed would offer the money to the company in return for the company pledging all of its assets. In addition, the Fed will receive warrants which will give it an ownership stake of almost 80pc. Final details of the package were still being hammered out last night, and the Fed and officials from the US Treasury were meeting with member of Congress and the Senate before announcing the rescue package. More on insurance The news ended a dramatic day in the fortunes of the company, the world's largest insurer with a £1,000bn balance sheet. If the US government had not stepped in, the repercussions could have been significant, given AIG's £440bn position in the credit-default swaps market, a market whose tenticles reach far and wide. advertisement The decision to provide government funding came in spite of US Treasury Secretary Hank Paulson's previous adamant stance that no more taxpayers money would be used to bail out failing financial firms. But it is understood that after the Fed and the Treasury saw the impact Lehman's collapse had on the markets on Monday and Tuesday, the decision was taken to offer AIG a lifeline for the sake of the stability of the financial system. Other options for the company included the Fed getting involved in some form of public-private loan, understood to be the only way of persuading banks to back a deal to help rescue AIG, according to a source close to the discussions. One report last night said the Fed had been considering placing the company into a conservatorship, which is the option it chose to protect quasi-public mortgage companies Fannie Mae and Freddie Mac. Shares in AIG slumped by 50pc in extended trading last night on that suggestion – having earlier closed down 21pc on the day. Earlier in the day former AIG chairman Hank Greenberg said he was looking at ways of taking AIG private in a bid to save the company he ran for 37 years in which he controls a 12pc stake. Mr Greenberg, 83, said he was working with boutique investment bank Perella Weinberg to explore options to hand a lifeline to AIG, which has found itself in this position as a result of its exposure to the troubled US mortgage market through risky derivatives known as credit-default swaps. If the Fed does not intervene and a solution cannot be reached, AIG will find itself in an extremely difficult position, as a result of a number of damaging downgrades from a trio of credit ratings agencies, with the possibility of bankruptcy now a looming possibility.

To: c.hinton who wrote (1926)	9/17/2008 10:10:05 AM
From: TimF	Read Replies (1) \| Respond to of 3816

tim you can massage and manipulate all you want but 4.9 to 6.1 is still a 25 % increase. I think the change in the unemployment rate is a more important measure than the percentage change. That's not manipulation. If unemployment was 20% a 25% increase would mean an additional 5% of all Americans would be unemployed. If it was one percent it would mean only an addition quarter of a percent would be unemployed. They are both 25% increases, but they don't resemble each other at all. But if you insist on focusing on the percentage increase of the rate, than there is nothing about a 25% increase that makes it "gone up to a very great extent", or even ""gone up to a great extent", its simply "gone up".