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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: geode00 who wrote (190399)	3/12/2009 11:08:20 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 306849

With $45 Billion, even Bernie Madoff would be well-capitalized!

To: geode00 who wrote (190399)	3/13/2009 1:02:49 AM
From: stockman_scott	Respond to of 306849

AIG Asked Buffett for Help Twice Before Its September Collapse By Betty Liu and Erik Holm March 13 (Bloomberg) -- Billionaire Warren Buffett said he was offered two chances to help American International Group Inc. in the final days before the U.S. government intervened to prevent the insurer’s collapse last September. Buffett fielded a phone call from AIG’s then-Chief Executive Officer Robert Willumstad on a Friday night in September, and opted not to bid on part of the insurer’s U.S. property-casualty operation, the Berkshire Hathaway Inc. chairman said in a Bloomberg Television interview. That Sunday, a second offer to participate in a transaction fell apart when a cash injection by a private group didn’t materialize, he said. “It wasn’t very tough,” to resist an investment, Buffett said. “They needed more than we could supply by far. I didn’t know the extent of it, but I knew that.” Buffett’s narrative sheds light on AIG’s efforts to come up with a private solution to its capital shortage the same weekend that Lehman Brothers Holdings Inc. was imploding. The U.S. later agreed to take a 79.9 percent stake in AIG in exchange for an $85 billion loan after allowing Lehman to collapse. As part of the deal, Willumstad was replaced by current CEO Edward Liddy. “That was a weekend like the world hasn’t seen,” Buffett said in the interview at Berkshire’s headquarters in Omaha, Nebraska. Portions of the interview are being broadcast on Bloomberg Television today. Buffett said he spent “an hour or two” on the Friday night examining documents faxed over by New York-based AIG before deciding not to commit Berkshire funds to buy some of the insurer’s U.S. operations. ‘Taking Out a Girl’ “It’s like taking out a girl -- sometimes you know it isn’t going to happen,” Buffett said “The time pressures, the degree of uncertainty, the depth of the possible hole, the need to get it through a regulatory body,” he said. “It wasn’t going to happen.” The second proposed deal involved “an insurance transaction that might have occurred in conjunction with a big injection of funds by some group -- I don’t even know who was necessarily in it -- on Sunday night,” Buffett said. “That never went anyplace.” Goldman Sachs Group Inc. and JPMorgan Chase & Co. were working with AIG in the days before the government rescue on a possible loan package of $70 billion to $75 billion, two people with knowledge of the discussions said at the time. Regulators have since revised AIG’s bailout three times to ease the original loan terms and increase the bailout package to about $160 billion. AIG last week posted a $61.7 billion fourth- quarter loss, the worst in U.S. corporate history. “It’s been an extraordinary period,” Buffett said. “It has exceeded my expectations in the wrong direction.” (Portions of the interview with Buffett will be broadcast today on Bloomberg Television and at BTV on the Bloomberg terminal.) To contact the reporters on this story: Betty Liu in New York at bliu17@bloomberg.net; Erik Holm in New York at eholm2@bloomberg.net. Last Updated: March 13, 2009 00:00 EDT