The Financial Times article was the subject of this blog entry, now with 21 comments, at http://www.ritholtz.com/blog/2008/11/aig-we-need-more-money/

http://www.ft.com/cms/s/0/1b1b2622-ad2c-11dd-971e-000077b07658.html?nclick_check=1
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AIG in talks with Fed over new bail-out

By Francesco Guerrera in New York

Published: November 8 2008 00:36 | Last updated: November 8 2008 00:36

AIG is asking the US government for a new bail-out less than two months after the Federal Reserve came to the rescue of the stricken insurer with an $85bn loan, according to people close to the situation.

AIG’s executives were on Friday night locked in negotiations with the authorities over a plan that could involve a debt-for-equity swap and the government’s purchase of troubled mortgage-backed securities from the insurer.

People close to the talks said the discussions were on-going and might still collapse, but added that AIG was pressing for a decision before it reports third-quarter results on Monday.

AIG’s board is due to meet on Sunday to approve the results and discuss any new government plan, they added.

The moves come amid growing fears AIG might soon use up the $85bn cash infusion it received from the Fed in September, as well as an additional $37.5bn loan aimed at stemming a cash drain from the insurer’s securities lending unit.

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http://www.bloomberg.com/apps/news?pid=20601087&sid=aP7AbgeKz9Gw&refer=home
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Nov. 10 (Bloomberg) -- American International Group Inc. got a $150 billion government rescue package, almost doubling the initial bailout of less than two months ago as the insurer burns through cash at a record rate.

AIG will get lower interest rates and $40 billion of new capital from the government to help ease the impact of four straight quarterly deficits, including a $24.5 billion third- quarter loss posted today by the New York-based company.

Taxpayers will take on the extra risk to give Chief Executive Officer Edward Liddy more time to salvage AIG. The insurer, which needed U.S. help to escape bankruptcy in September, has posted about $43 billion in quarterly losses tied to home mortgages. Liddy's plan to repay the original $85 billion loan by selling units stalled as plunging financial markets cut into their value and hobbled potential buyers.

``It was obvious to me from Day One that the terms of that arrangement were really quite punitive in terms of the interest rate and the commitment fee and the shortness of it,'' Liddy said today in a Bloomberg Television interview. ``I started really about a week after I got here trying to renegotiate.''

AIG advanced 22 cents, or 10 percent, to $2.33 at 12:39 p.m. in New York Stock Exchange composite trading. A year ago the shares sold for more than $56.

The first rescue plan wasn't sustainable, Liddy said during a conference call today. AIG's third-quarter loss equaled $9.05 a share and compared with profit of $3.09 billion, or $1.19, a year earlier, AIG said in a statement. Losses in the past year erased profit from 14 previous quarters dating back to 2004.

Affordable Terms

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If they each give plasma twice a month (blood plasma), they can earn 40 dollars each,
and then they can give blood once very six months for 60 more dollars.
Then they will be able to pay back the public.

If the blood doesn't fetch enough, they can sell off the livers of poorly performing
employees - hey - gotta face it when the breakup cost is worth more than for the
going concern. A beating heart, and a whole set of fresh organs can draw several
million on the open market. Think of the goldmine waiting for the AIG shareholders.