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MXRider
Slim Shady
Joined: 19 Jul 2004
Posts: 4919
Location: Have it your way!
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 Posted: Wed Sep 17, 2008 11:53 am Post subject: Buying AIG Stock???? |
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With the fed coming to a deal with AIG, good time to buy? The stock is floating around $2.25 right now after the announcements and the Fed has brought in Ed Liddy, former CEO of Allstate Insurance, to run things. With the fed money going in and a proven leader, I am thinking it's a +EV situation.
Thoughts??? |
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nsidestrate
Suited's Love Monkey
Joined: 26 May 2004
Posts: 22397
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| Posted: Wed Sep 17, 2008 12:11 pm Post subject: |
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I hate AIG stock right now. The interest rate is LIBOR + 850 points and it is fully collateralized (as far as I can tell). Essentially, you massively dilluted the value of AIG shares in exchange for a secured loan at burdensome rates. The closest analogy I can come up with is that they got a pawn shop loan. I think there is a chance that AIG is solvent, but barely. I doubt you will see shares trade above $5 for months, even years. The terms aren't clear, but it appears that the Fed is demanding the sale of many core assets in order to satisfy the debt. It is hardly going to command premium prices for even attractive assets like ILFC.
Some suggested reading:
CNN
Minyanville
It is possible that the market can't accurately price the risk and that the stock might see a small bounce, but the upside is limited and the downside is clearly a fire sale with the proceeds going to stockholders last and a near zero return. I wouldn't touch it, if I were you. |
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Llanlad
Whinge-Free
Joined: 20 Dec 2004
Posts: 3430
Location: Educating LFC fans
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| Posted: Wed Sep 17, 2008 2:40 pm Post subject: |
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| What does this mean for United ? .... they are our main sponsors ! |
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Dogs
1K Club
Joined: 17 May 2006
Posts: 1169
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| Posted: Wed Sep 17, 2008 3:32 pm Post subject: |
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| Llanlad wrote: | | What does this mean for United ? .... they are our main sponsors ! |
It means you'll have to fork out 50 quid for yet another shirt. |
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Llanlad
Whinge-Free
Joined: 20 Dec 2004
Posts: 3430
Location: Educating LFC fans
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| Posted: Wed Sep 17, 2008 4:10 pm Post subject: |
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Well done there Dogs ...
But sadly its not worked ..
Even when you change your avatar ... your name still makes me think of a wispa ... and cue the pang for chocolate ..
On the United shirt issue .... my lad is allready hassling me for the latest top ..  |
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rocketplayer
Sugar Daddy
Joined: 17 Jan 2005
Posts: 2741
Location: The market is a nightmare but I'm in cash!
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| Posted: Wed Sep 17, 2008 10:36 pm Post subject: |
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| Why do people always seem they are capabale of catching a falling knife? |
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janeg
Regina Canada
Joined: 04 Oct 2004
Posts: 5104
Location: Somewhere down the crazy river
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| Posted: Fri Sep 19, 2008 10:51 am Post subject: |
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| rocketplayer wrote: | | Why do people always seem they are capabale of catching a falling knife? |
But the blade looks so sparkly 
I know people who bought Nortel stock when it crashed thinking it could only go up; they're pretty much still waiting. It's a dangerous game, especially as it looks as if AIG never bought any CDS paper (an insurance company with no insurance on its own assets ) and they're now being forced to sell off any and all lucrative assets what they'll have left is what no one wants; difficult conditions for any stock to grow on. Nside's 'pawn broker' analogy is pretty apt. |
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PizzaByNight
53o
Joined: 08 Feb 2005
Posts: 3623
Location: SW Ohio
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| Posted: Fri Sep 19, 2008 3:36 pm Post subject: |
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| The courtside tennis announcer wrote: | | Advantage: MXRider |
Just saw it go by at 4.03 on the ticker.
Of course, there are a lot of back and forths in a tennis match. |
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Stew21
Joined: 03 Oct 2006
Posts: 996
Location: Orlando, Fl
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| Posted: Fri Sep 19, 2008 3:47 pm Post subject: |
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| janeg wrote: | | rocketplayer wrote: | | Why do people always seem they are capabale of catching a falling knife? |
But the blade looks so sparkly
I know people who bought Nortel stock when it crashed thinking it could only go up; they're pretty much still waiting. It's a dangerous game, especially as it looks as if AIG never bought any CDS paper (an insurance company with no insurance on its own assets ) and they're now being forced to sell off any and all lucrative assets what they'll have left is what no one wants; difficult conditions for any stock to grow on. Nside's 'pawn broker' analogy is pretty apt. |
(Doing my best Dustin Hoffman imitation)
Yeah, nice and spakly.
(End imitation) |
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Muttly
Joined: 24 Dec 2005
Posts: 788
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| Posted: Fri Sep 19, 2008 7:51 pm Post subject: |
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| What are the chances that even if they did pull it out it would be a Kmart situation where they declare bankruptcy and all the old stock is worthless and they re issue new stock with a slightly different symbol to raise funds? |
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Fumseck
Cannuque
Joined: 17 Jun 2005
Posts: 3295
Location: Quebec, Canada
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| Posted: Fri Sep 19, 2008 10:28 pm Post subject: |
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| janeg wrote: | | I know people who bought Nortel stock when it crashed thinking it could only go up; they're pretty much still waiting. |
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