American International Group is latest financial firm to go begging for billions
from investors. The global insurance firm reported a gigantic $7.81 billion net loss in the first quarter, the most in the company's history, due to writedowns
on complex derivatives contracts (think credit default swaps) and losses on other investment holdings (residential mortgage backed securities, structured securities and so on). So it's raising $12.5 billion in stock, debt, and other equity-linked securities. Standard & Poor's
cut its rating on AIG
to AA- from AA in the wake of the news.
Good thing that Alan Greenspan
and Treasury Secretary Henry Paulson
just told us the worst of the credit crisis is over. Otherwise, I might be worried.