ANALYST VIEW: AIG enters records book with $61.7 billion loss
Mon Mar 2, 2009 10:57am EST
NEW YORK/LONDON (Reuters) - American International Group Inc reported a $61.7 billion loss on Monday, the largest loss in U.S. corporate history, and unveiled a revised rescue plan from the U.S. government.
The massive loss, equal to $22.95 a share, is the company's fifth-consecutive quarterly loss, bringing the total loss over that period to in excess of $100 billion.
The following is reaction from industry analysts and investors:
CHRISTOPHER GARMAN, THE HEAD OF GARMAN RESEARCH BASED IN ORINDA, CALIFORNIA
"It's a pretty strong reminder that the U.S. Treasury is still all that stands between the current market environment and the ongoing threat of systemic financial meltdown."
"The converse of this is that the Treasury remains fully committed to fight systemic risk and is decisively backing this commitment up."
"It suggest further pressure on financials, but there are few places to hide from systemic risk aside from Treasuries, and this can widen out risk premiums on corporates, including high yield."
PETER CARDILLO, CHIEF MARKET ECONOMIST AT AVALON PARTNERS IN NEW YORK
"The market is bracing for more negative news within the economy and corporate America and today's AIG news reinforces the fact that there are still problems out there."
JONATHAN LAWLOR, HEAD OF EUROPEAN RESEARCH AT FOX-PITT, KELTON, IN LONDON
"There might be some modest counterparty risks but the government is ultimately guarantor. We shouldn't look to too many direct consequences, it's the indirect consequences on broader asset markets and the pricing level in non-life markets and how AIG will conduct itself under this breakout plan."
"The troubles of AIG follow a complex structure and the direct fallout may be limited depending on the asset values of the European insurers, capital adequacy of the European insurers, and the impact that this might have on dividend policy."
"Those issues are linked to the broader market, it may or may not diminish acquisition appetite for the AIG operations. It's more the consequence on asset markets, particularly for life insurers."
(Reporting by Martina Fuchs in London and Edward Krudy and Walden Siew in New York)
Mon Mar 2, 2009 10:57am EST
NEW YORK/LONDON (Reuters) - American International Group Inc reported a $61.7 billion loss on Monday, the largest loss in U.S. corporate history, and unveiled a revised rescue plan from the U.S. government.
The massive loss, equal to $22.95 a share, is the company's fifth-consecutive quarterly loss, bringing the total loss over that period to in excess of $100 billion.
The following is reaction from industry analysts and investors:
CHRISTOPHER GARMAN, THE HEAD OF GARMAN RESEARCH BASED IN ORINDA, CALIFORNIA
"It's a pretty strong reminder that the U.S. Treasury is still all that stands between the current market environment and the ongoing threat of systemic financial meltdown."
"The converse of this is that the Treasury remains fully committed to fight systemic risk and is decisively backing this commitment up."
"It suggest further pressure on financials, but there are few places to hide from systemic risk aside from Treasuries, and this can widen out risk premiums on corporates, including high yield."
PETER CARDILLO, CHIEF MARKET ECONOMIST AT AVALON PARTNERS IN NEW YORK
"The market is bracing for more negative news within the economy and corporate America and today's AIG news reinforces the fact that there are still problems out there."
JONATHAN LAWLOR, HEAD OF EUROPEAN RESEARCH AT FOX-PITT, KELTON, IN LONDON
"There might be some modest counterparty risks but the government is ultimately guarantor. We shouldn't look to too many direct consequences, it's the indirect consequences on broader asset markets and the pricing level in non-life markets and how AIG will conduct itself under this breakout plan."
"The troubles of AIG follow a complex structure and the direct fallout may be limited depending on the asset values of the European insurers, capital adequacy of the European insurers, and the impact that this might have on dividend policy."
"Those issues are linked to the broader market, it may or may not diminish acquisition appetite for the AIG operations. It's more the consequence on asset markets, particularly for life insurers."
(Reporting by Martina Fuchs in London and Edward Krudy and Walden Siew in New York)
