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Old 09-15-2008, 11:35 AM   #21
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I head someplace this morning the Mr Warren B. is in "important" talks with AIG - maybe he is looking for a better deal than BAC got of MER?
Buffett won't do anything unless he can steal it. It would have to be full of clean assets that will eventually be easily liquidated for big profits. Berkshire's balance sheet is very strong so it could wait this out but Warren B loves cash right now.
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Old 09-15-2008, 11:36 AM   #22
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I head someplace this morning the Mr Warren B. is in "important" talks with AIG - maybe he is looking for a better deal than BAC got of MER?
Or they're discussing the impact of AIG's other business to the reinsurers owned by BRK. Warren could be on quite the hook, if they have substantial reinsurance contracts with AIG.

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Old 09-15-2008, 11:37 AM   #23
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Or they're discussing the impact of AIG's other business to the reinsurers owned by BRK. Warren could be on quite the hook, if they have substantial reinsurance contracts with AIG.

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Old 09-15-2008, 11:38 AM   #24
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Or they're discussing the impact of AIG's other business to the reinsurers owned by BRK. Warren could be on quite the hook, if they have substantial reinsurance contracts with AIG.

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They just got a bit cheaper, if you can skip the liability:

"NY Gov. Paterson says state will effectively lend AIG $20 billion and urges Fed to step up as well. More soon."
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Old 09-15-2008, 11:52 AM   #25
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I head someplace this morning the Mr Warren B. is in "important" talks with AIG - maybe he is looking for a better deal than BAC got of MER?

Opps: Just saw this at MSN Money: "NY Gov. Paterson says state will effectively lend AIG $20 billion and urges Fed to step up as well. More soon." Wonder what the interest rate is?

every time some company is in trouble there is always a rumor that Buffet is coming to the rescue. i bet they are started just so the pro's have a supply of suckers willing to buy the stock on hope and dreams
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Old 09-15-2008, 12:06 PM   #26
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every time some company is in trouble there is always a rumor that Buffet is coming to the rescue. i bet they are started just so the pro's have a supply of suckers willing to buy the stock on hope and dreams
Well,if I wanted to get some money, and the Fed tapped me out, Buffett seems like a likely choice........
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Old 09-15-2008, 12:22 PM   #27
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CNBC is reporting that 'buffet is no longer interested' in AIG. Which means maybe he just wants a better price.

I'd see no reason for the rest of the insurance business to bail out AIG to maintain the pristine image of the annuity business. They'd rather spend 1/100th as much to heavily advertise about how when you choose one, you should make sure to select a company that wont fail like those other guys did...like US!
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Old 09-15-2008, 12:38 PM   #28
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Opps: Just saw this at MSN Money: "NY Gov. Paterson says state will effectively lend AIG $20 billion and urges Fed to step up as well. More soon." Wonder what the interest rate is?
Hey, no fair! I don't remember voting on that...
I'm gonna write a letter to Albany!

seriously, though, if it saves folks from losing their annuity, i'm all for it. i receive an annuity from MetLife and believe me, i've been checking their health a lot lately.

FB
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Old 09-15-2008, 12:43 PM   #29
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Hey, no fair! I don't remember voting on that...
I'm gonna write a letter to Albany!

seriously, though, if it saves folks from losing their annuity, i'm all for it. i receive an annuity from MetLife and believe me, i've been checking their health a lot lately.

FB
MetLife has a LOT more life insurance business than annuity business, AIG is almost the antithesis of that. NML does it right, offer nothing but a death benefit and vanilla Russell funds in their VAs....no promises means No surprises.........
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Old 09-15-2008, 12:50 PM   #30
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Opps: Just saw this at MSN Money: "NY Gov. Paterson says state will effectively lend AIG $20 billion and urges Fed to step up as well. More soon." Wonder what the interest rate is?
I just finished explaining this to my wife. I was watching the talking heads on cnbc with their hair on fire. She said "Whats the big deal? It sounds like most of these companies are getting more money and its all loans, so it wont cost anyone anything..."

I explained that while the companies are getting plenty of loans and 'liquidity' pumped into them, that its at an interest rate that is ridiculously attractive, and that the difference between that rate and the rate that could be gotten was pretty large. And that it was OUR money that was being thrown around.

I finally arrived at a workable analogy. "If everyone in your family was teetering on bankruptcy, and we loaned them a total of a million bucks to keep them from falling in, at an interest rate of a percent or two, thats what we have here in this financial mess. We're not solving the problems of the spend-like-theres-no-tomorrow, bad financial decisions or assuring it wont happen again. We're just temporarily alleviating the syptoms. Oh, and we'd be selling 6.25% cd's to make those 1-2% loans. Which may never be paid back. Oh, and they're all going to go on a spending spree tomorrow and get paid big bonuses."

She's got it now.
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Old 09-15-2008, 12:57 PM   #31
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I just finished explaining this to my wife. I was watching the talking heads on cnbc with their hair on fire. She said "Whats the big deal? It sounds like most of these companies are getting more money and its all loans, so it wont cost anyone anything..."

I explained that while the companies are getting plenty of loans and 'liquidity' pumped into them, that its at an interest rate that is ridiculously attractive, and that the difference between that rate and the rate that could be gotten was pretty large. And that it was OUR money that was being thrown around.

I finally arrived at a workable analogy. "If everyone in your family was teetering on bankruptcy, and we loaned them a total of a million bucks to keep them from falling in, at an interest rate of a percent or two, thats what we have here in this financial mess. We're not solving the problems of the spend-like-theres-no-tomorrow, bad financial decisions or assuring it wont happen again. We're just temporarily alleviating the syptoms. Oh, and we'd be selling 6.25% cd's to make those 1-2% loans. Which may never be paid back. Oh, and they're all going to go on a spending spree tomorrow and get paid big bonuses."

She's got it now.
Sounds like you need to be a guest speaker at the RNC.........
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Old 09-15-2008, 01:52 PM   #32
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Buffett is still cleaning house at General Re of all the muck they raked in from AIG. From what he's learned during depositions, I don't think he'd buy anything from AIG even if it was part of a bankruptcy liquidation.

Buffett had so much fun with Goldman Sachs Salomon in the 1990s that I doubt he'd ever touch a brokerage or an investment bank again.

But I've read persistent rumors about him adding more American Express stock, and I bet he's been backing up his dumpster to load consumables stocks like Kraft. I suspect that next year we'll find out that a lot of orphaned bonds have been sold to him for 50-75 cents on the dollar.

And none of this matters a bit. Stocks are far in the minority of Berkshire's holdings these days, so what Buffett is presumably waiting working on is some foreign company hoping that he can help out with their own liquidity or succession problems. It'd be great to see Berkshire welcome a $10B acquisition to the family.
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Old 09-15-2008, 01:56 PM   #33
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Hmmm...AMEX is in second place on the shorts list on vanguards market neutral fund, right behind AIG.

Of course, that data is a few months old and we have no idea when they took the positions or if they've divested themselves of them yet.
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Old 09-15-2008, 02:17 PM   #34
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And none of this matters a bit. Stocks are far in the minority of Berkshire's holdings these days, so what Buffett is presumably waiting working on is some foreign company hoping that he can help out with their own liquidity or succession problems. It'd be great to see Berkshire welcome a $10B acquisition to the family.
Well, he has the war chest to do it. I wonder what its like having money that you DON'T HAVE TP PRINT to work with, must be refreshing.......
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Old 09-15-2008, 02:29 PM   #35
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One other thing to keep an eye on with regards to some of these insurers is that they're about to get nailed with claims from the hurricanes. I dont know what AIG's exposure is to home policies, but it could be significant.

All that might be making Warren decide to hold onto his pennies a while longer.

I guess the good news is that AIG is not without assets. Bond holders and annuitants will in line ahead of the equity holders. I'm pretty sure that you'd just get a lump sum based on how much you put in and how many years you'd drawn on it...not continued payments.
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Old 09-15-2008, 02:41 PM   #36
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One other thing to keep an eye on with regards to some of these insurers is that they're about to get nailed with claims from the hurricanes. I dont know what AIG's exposure is to home policies, but it could be significant.
I would bet it is.............

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I guess the good news is that AIG is not without assets. Bond holders and annuitants will in line ahead of the equity holders. I'm pretty sure that you'd just get a lump sum based on how much you put in and how many years you'd drawn on it...not continued payments.
Large shareholders are known to get cranky when you start taking out high interest collateralized loans, which is why they are talking to the Feds. I think continuing the income streams promised would be way cheaper than settling lump sum to all annuitants, while at the same time spending $200 million defending yourself against numerous class action lawsuits..........
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Old 09-15-2008, 03:02 PM   #37
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Some reports this morning said the annuity 'division' was safely separated from the holding company, but it seems that the holding company has been given permission to raid the subsidiaries assets for collateral.
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Old 09-15-2008, 03:28 PM   #38
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Look, you can get an AIG corporate bond with a 24% yield on the secondary market!

AIG bonds Anyone?

Edit: ILFC (part of AIG ) bonds available for 30+% yield.
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Old 09-15-2008, 03:36 PM   #39
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Tough call. I could buy some ISM and get a CEO that wants to kill all the journalists, or an AIG bond and run with the big dogs of wall street....hmmmm....
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Old 09-15-2008, 03:42 PM   #40
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Buffett had so much fun with Goldman Sachs in the 1990s that I doubt he'd ever touch a brokerage or an investment bank again.

You mean Salomon Brothers?
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