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Bio:
I like web disigning
Interests:
World of Warcraft <3
Occupation:
A matenance man
Location:
*points to map* HERE!
Posts:
604
Join Date:
Jul 2007
Rep Power: 45 
Gamerz Place Grammar Nazi
Cruentus:
is lonely.
Cruentus is: 
Level up: 67%, 50 Points needed |
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No Good News for AIG
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09-19-2008, 07:43 PM
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After three quarters of staggering housing-related losses, worries are mounting that American International Group's troubles are larger than Wall Street expected. And if that's not bad enough, its misfortunes dragged down the entire insurance sector for the day.
On Monday, Credit Suisse analyst Thomas Gallagher said AIG's credit default swap portfolio "makes it one of the most exposed names to recent credit deterioration." He estimated losses from the insurance company’s financial-products division will reach $6.5 billion during the third quarter, compared with his prior estimate of $2.6 billion.
Shares of American International Group (nyse: AIG - news - people ) sank 5.6%, or $1.11, to $18.76 after tumbling 67.8% since the beginning of the year.
Other insurers followed suit: Hartford Financial Services slipped 2.3%, or $1.38, to $60.04 at the close, while Cigna fell 2.9%, or $1.21, to $41.05. The Travelers Companies lost 1.2%, or 52 cents, to $43.79.
Earlier this month, the world's largest insurer said it had booked $11 billion in investment losses in its second quarter, mostly on mortgage investments gone bad. (See " Three Strikes For AIG.") AIG has lost more than $18 billion over the last three quarters due to investments tied to subprime mortgages.
In May, AIG raised $20.0 billion in capital through the sale of $7.47 billion of common stock, $5.88 billion in equity units and $6.91 billion securities in an effort to strengthen its financial position. The company said it is doing an evaluation of all of its businesses and will report its findings in September.
Gallagher now expects AIG to post a loss of 86 cents a share when it reports third-quarter results in November. The average analyst estimate is for a profit of 75 cents a share.
On Friday, Fitch Ratings warned it could cut ratings on the company's debt due to further losses in its mortgage-based securities. Earlier this month, Standard & Poor's said it would likely cut its ratings if AIG's earnings don't stabilize in the third quarter.
"With at least one major rating agency explicitly saying 'if earnings do not stabilize by the third quarter' another downgrade is likely, the risks of a near-term rating action have clearly risen, in our view," said Gallagher. AIG estimated a one-notch downgrade by both Standard & Poor's and Moody's Investors Service would require it to post up to $13.3 billion in additional collateral. Gallagher expects the company will have to raise another $7.5 billion in equity capital this year.
Gallagher lowered his price target to $22, down from $30, on a heightened risk profile due to uncertainty over the company’s ratings, the amount of capital it may need "and the ultimate cost of a de-risking strategy especially for its credit default swap business."
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The following rules apply to the forums.
1. No spamming: Means no one-word posts, no double-posting, and no going off-topic in threads. One-word posts are legal in some areas of the 7th Heaven forum and Quiz Corner however, everywhere else it's prohibited. Double-posting will sometimes be allowed to slide, but if it's say 5 minutes after you just posted before, then it's prohibited.
2. No flaming or trolling: Means no directly going at someone and trying to provoke fights or saying racist, hurtful things. Flaming is basically going at someone directly, while trolling is saying things to instigate a fight. Both are not tolerated here whatsoever.
3. No advertising: Means no promoting other websites of ANY kind. You're allowed to have a link in your profile where it says 'homepage' other then that if it's in your sig, you advertise in a thread or anything, it will immediately be deleted. Also no advertising through PM either, that is the worst and lowest form of advertising there is, so don't do it.
4. Avatar & Sig limits: Avatar max limits are 125x125 in pixels. Animated avatars are allowed. Sig limits are 500x200. You're also allowed to have an animated sig, however it is not to be a huge animation, just a small one. Anything that's fully animated will be taken off as it's prohibited.
5. Consequences:
-Spamming: If you are caught spamming, meaning one-word posting, double-posting, going off-topic, then likely your post is just gonna be deleted by a staff member, if this occurs more then a couple times, a staff member will likely quote you and point out to you to stop. If it keeps occuring, then temporary suspensions of a day or 2 may be necessary.
-Flaming: If you are caught flaming, trolling in any way, your post again will be deleted the first time. Just the first time, if you are caught again you will be told to stop by a staff member, if it keeps happening, you will be suspended. Since this is more serious then spamming, it will be a longer suspension likely of a week or so.
-Advertising: If you are caught advertising, you're post or thread for advertisement gets deleted, simple as that. If you do it more then once you get told to stop again, but if you keep doing it we may have to suspend for a day or 2 to teach you that it's not allowed. However, if you are caught advertising through PMs, the consequences are more severe. First time you get warned to stop, second time automatic 2 day suspension, any other time after that you're gone forever. Just keep that in mind.
-Avatar & Sig: If you put on a bad sig or oversized, no big deal really. A staff member will just edit your sig saying to remove it within X amount of hours and that it's too big or whatever. Or if your sig is too big, we may just put some of your things in a spoiler code, so it isn't lagging for other users.
That is all. All the rules and consequences have been covered. Any questions, just PM an Admin or any staff member for that matter.
Thank you for reading and understanding the rules, and enjoy the forums!
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