Tuesday, October 19, 2010
STOP THE INSANITY
I don't know about the rest of you, but I'm shocked at what I learned. If you were financially strapped, and you borrowed a few dollars from a friend, would you go out and buy a luxury item to feed your fantasy instead of groceries to feed your body?
If we as taxpayers feel like the $47.5 billion we paid to get AIG out of the mess it created by churning out credit default swaps was not used properly, you should just head up to Mount Mansfield in Stowe, Vermont. There you can reap the benefits of the AIG-owned resort's recent $400 million overhaul. (Technically, the resort is owned by an AIG spinoff that is owned by AIG.) There's skiing, snowboarding, shopping, dog sled tours, a spa, a performing arts center and more, with lift tickets starting at $71 and topping out at $655 for 10 days of mountain trails. Is it worth it? Considering the ownership, who knows more about going downhill (skiing) fast than AIG?
In addition, American International Group (AIG) is likely to gain “tens of millions of dollars” from the initial public offering of a Chinese automaker that does business with Iran, the South China Morning Post reported.
AIG, through a subsidiary, owns 13.5 percent in Chongqing-based Lifan Industry Group Co., which exports motorcycles to Iran and where a local factory has a licensing agreement to assemble Lifan’s cars from imported kits, the Hong Kong-based English-language newspaper reported today, citing Mark Herr, AIG’s New York-based vice-president of media relations. Herr said the investment in Lifan wasn’t in violation in U.S. law and an unidentified U.S. Treasury Department spokesman said the matter didn’t appear to violate U.S. sanctions, the Post said. The China Securities Regulatory Commission will hold a preliminary hearing on Lifan’s IPO application today, it said.
We bailed them out so they could buy a resort and invest overseas, instead of in America? Who knew?
AND, DID YOU KNOW.....?
AIG reportedly plans to sell shares of its Asian insurance unit, AIA Group Ltd., in Japan, along with AIA's planned listing in Hong Kong at the end of this month. The Nikkei business daily reported Thursday that AIA's Japanese share sale is expected "to raise tens of billions of yen." Terms would be finalized around Oct. 22, and the share offer will take place Oct. 26-27, the report said. The report said the shares should price at about 200 yen ($2.45) each.
AIG plans to sell more than half of its stake in AIA Group Ltd through a Hong Kong listing, aiming to raise up to $20.5 billion at the top price. AIG is offering 5.86 billion shares in a range of $2.35-$2.52 under the basic offer. Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc, and Morgan Stanley are joint global coordinators for the IPO. AIG has hired them to market the offer. (Citigroup? Goldman Sachs? Morgan Stanley? REALLY?)
AIA's offer is being supported by strong foreign inflows into Asia which has driven many regional stock markets to multi-year highs.
AIG is expected to cap the underwriting fees for the AIA Group Ltd IPO at 2 percent, helping the underwriters to earn as much as $355 million, sources told Reuters. The underwriting commission is expected to be paid on the base offer of up to $14.86 billion, plus a 20 percent option, that would result in AIG raising $17.83 billion from the IPO based on the top end of the price range.
NOTE: An initial public offering (IPO) is when a company issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded. In an IPO, the issuer may obtain the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market. An IPO, therefore, allows a company to tap a wide pool of stock market investors to provide it with large volumes of capital.
BOTTOM LINE: We need MORE Wall Street reform, NOT LESS like the GOP wants. We need sanctions and a department to oversee the bailed-out entities so they don't take American money overseas, where the GOP is getting most of theirs. Wake up people, give Obama and the Democrats a chance to STOP THE INSANITY!