AIG. The emperor has no clothes.

Mar 16, 2009 by Sam

It is time for AIG to be dismantled. It’s profitable units should be spun off to both management and shareholders (US Government).  It’s obligations as an insurance company should be honored only to the extent that it insures stability to the financial system.  Insurance payments to other banks, especially foreign banks, do not meet the original investment thesis and criteria of the US government.  Payments to executives certainly do not meet those criteria.  When someone invests money in a company, any company- private or public, the status of the company needs to be reevaluated on a constant basis. When the original investment thesis no longer holds true – changes are required.  Almost all the time, those changes are in the form of making changes in either the structure of the investment or the structure of the portfolio company. Continuously adding to the original investment, without dramatic changes to benefit the investor  (in this case the US government) is a sure way to lose money and to lose control and to lose focus of your investments. The US government continues to waste it’s investment capital by propping up something that should not exist. Or worse yet, it wastes its capital by investing in something that quite possibly actually does not exist at all.