Marketplace: Chris Whalen Nails the Government's Poor management of Selling its AIG Stake

Bob Moon: What’s the rush? That’s what investment consultant Chris Whalen was asking today at Institutional Risk Analytics. He says the government seems to be in a hurry to get the word out that it’s aiming to start unloading its $49 billion in AIG shares within the coming year. Whalen warns the market isn’t ready and won’t support it.

Chris Whalen: We’re trying to do a public offering of shares in a company that can’t stand by itself, that has to have government support. That’s not going to work.

Flooding the market with shares, he cautions, is a money-losing proposition. He says it’s the same catch-22 the government faces with General Motors, and has already run up against trying to sell its Citigroup shares. Gauging by AIG’s total market capitalization — the value of all outstanding shares — he argues the idea of taxpayers making all their money back is pie-in-the-sky.

Whalen: The market cap of this company is single digits. They owe us $100 billion, right? So what the market’s telling you is that the company is worth, today, a tenth of what they owe us.

Read or listen to it all.


Posted in * Economics, Politics, Corporations/Corporate Life, Economy, Ethics / Moral Theology, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Stock Market, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The September 2008 Proposed Henry Paulson 700 Billion Bailout Package, The U.S. Government, Theology

One comment on “Marketplace: Chris Whalen Nails the Government's Poor management of Selling its AIG Stake

  1. Br. Michael says:

    It’s probably for political reasons. No surprise there.