Obviously the credit markets and the financial industry is “going wacky” right now. Well, what’s to be expected? The American people can’t allow $800 billion government bailouts and not have some huge panic in the market.
AIG went for another dip in the government hand out take. Nobody ever imagined that they would have such financial difficulties… well - they do and they did - big time.
Hartford states that it is financially solvent on many fronts - here’s a direct quote from them:
Ha! Are we really supposed to believe that? If I’m an American investor and I own stock in Hartford, there’s only one thing I’m doing with that stock right now - SELL SELL SELL! Insurance companies, like AIG, are going under and going broke.
This is a letter from AIG Executive Win J. Neuger sent back on September 16, 2008
AIG Investments
Sept 16 Letter
Dear Investor:
I am writing to update you on some of the news regarding AIG and the recent actions of the principal rating agencies. Notwithstanding the downgrades announced last evening, the company is working aggressively on various fronts to improve liquidity during this unsettling period.
While AIG has not yet reached a complete solution, we expect that the New York and Pennsylvania insurance departments will provide the necessary approvals to allow AIG to unlock $20 billion in liquidity already within the enterprise through the exchange of capital between certain AIG businesses. This is a positive first step for the company, and we are working on additional measures.
I want to remind you that AIG Investments client assets are not impacted by AIG’s current market situation and our commitment to protecting our client’s investments is unwavering.
Our Investor-to-Investor commitments are made by AIG’s various insurance subsidiaries, which are strong, well-positioned businesses in diverse markets around the world. These companies are well capitalized and meet or exceed regulatory capital requirements in their respective markets.
Our investment teams remain in place and are focused solely on managing your assets. As you know, their incentives are based primarily on the success of their strategies, not AIG’s results. They are working hard to ensure that the impact of the current turmoil is mitigated and are working to find opportunities in the current crisis.
Many of you have also inquired about our Houston employees in the wake of Hurricane Ike. I am pleased to report that while there has been extensive damage to the area, all of our employees and their families are safe and accounted for. In addition, back-up operations and contingency plans are being exercised to ensure the continuity of the businesses.
I will continue to communicate important developments as they become available.
Best regards,
Win Neuger
AIG thought they were going to make it out of the whole mess! And they did - but only with a taxpayer bailout and going through massive defaults. IS Hartford headed towards the same disaster?
Listen to the supposed experts:
“While we still see value in the stock from a fundamental standpoint and a good franchise,” Karaoglan wrote to investors, “for financial stocks, a perception of fear and risk often unfortunately becomes a reality.”
The Hartford has already raised $2.5 billion of capital in a deal last month to sell a minority stake of the company to German insurer Allianz.
In a note to investors Friday before the Fitch downgrade, Barclays Capital analyst Eric Berg told clients “there are precious few options” for The Hartford to raise more capital to avoid downgrades.
“While it is certainly possible that the company is acquired, that it gets more capital from its new partner [Allianz], or that it receives U.S. government-provided capital, we think it is even more likely that none of these scenarios plays out — and that Hartford continues to suffer strains on its capital from credit losses and from the sharp drop in equity markets,” Berg wrote.
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