The more and more I learn about AIG, the more I feel that it will be dissolved once the government feels that the financial markets will not crater without AIG paying out on its obligations.  I could be way off base, but that is what this game is all about.  I owned shares @ around $2 per share but don’t any longer.  I dumped them at $1.45 and feel there is much more down side than upside in AIG stock.

The US gov’t has subsidized AIG to the tune of $180 billion.  That is a staggering figure that won’t soon be paid back.  There will be little paybacks in unique forms such as the stakes the the US Gov’t will have in a couple of foreign unit IPO’s.  The company is selling assets like mad but will likely be hard pressed to come up with the entire $180b.  We will continue to see these moves to sell off subsidiaries and pay back the gov’t with the proceeds.

My hunch is that it isn’t all about paying the gov back with the proceeds.  There is another big issue looming that has been brought to light today.  No surprise to many, I am sure.  Reade about the looming CDS issues facing AIG:

AIG says swaps exposure could lead to more lossesAP(Tue 9:13am)

At this point, I would run from AIG shares.

AIG