Biggest insurer AIG faces massive credit-related losses and regulatory probes – removing Martin Sullivan exposes the serious trouble
Peter Oberois
Jun. 16, 2008

The biggest insurer American International Group (AIG) is in serious trouble. It is replacing its Chief Executive with Bob Willumstad, the veteran banker who is the insurer’s chairman, AIG has already registered $30bn in credit-related writedowns and losses. Now the rumor in the street is that another $40 billion may have to written off as bad loans.

Removing Martin Sullivan exposes the serious nature of the insurer’s trouble. Unlike high-profile casualty of the credit crisis, which has already claimed the jobs of Chuck Prince, Citigroup’s chairman and chief executive, and Stan O’Neal, his opposite number at Merrill Lynch, AIG’s situation is somewhat different.

AIG’s potential loss is much higher. The pressure to change the top management has come from a shareholder revolt. The current board had to give in to the pressure of the shareholders. The former AIG director Eli Broad, Legg Mason fund manager Bill Miller and fund manager Shelby Davis led the shareholder revolt.

Biggest insurer AIG faces massive credit-related losses and regulatory probes – removing Martin Sullivan exposes the serious trouble
Peter Oberois
AIG’s potential loss is much higher. The pressure to change the top management has come from a shareholder revolt. The current board had to give in to the pressure of the shareholders.
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Dollar will move sideways as Federal Reserve is caught between lower growth and commodity hyperinflation
Nancy Oscar
US Dollar rose to a one-month high this week as Treasury Secretary Henry Paulson declined to rule out intervention to support the dollar and U.S. retail sales increased in May twice as much as economists forecast.
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Preferential treatment by Countrywide to Senator Kent Conrad shows how corrupt the mortgage business is
Peter Oberois
Conrad said he also received a loan from Countrywide on an eight-unit apartment building in Bismarck, North Dakota, even though the lender typically serves properties that have four units or less.
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The hyperinflation in commodities and credit squeeze create the recipe for financial meltdown v3.0
Joe Weinman
The banks will face severe runs one after the other. People will struggle to survive with skyrocketing heating costs, food prices and $6 to 7 a gallon gasoline.
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Higher Oil and lower dollar feeding each other in a frenzy – widening trade gap shows the real problem
Peter Oberois
As US Dollar goes down, oil price moves up. As oil price moves up, the US trade deficit goes up causing a lower dollar. The phenomenon is feeding on itself.
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Chinese stock market collapses as Chinese Central Bank focuses on credit tightening measures – what's the effect on Dow?
Sam Adelton
A moderation in Chinese economy spells a slowdown in global commodity inflation. That in turn is very bullish for US stock market.
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Dollar faces new challenges as European Central Bank (ECB) and Federal Reserve now compete to contain inflation
Kathy Parker
That means rates will rise both in US and Europe. It seems Eurpeans are more concerned about inflation than the slowdown in the economy due to higher dollar.
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