Mortgage finance company Fannie Mae said it may have to tap a $100 billion government lifeline as early as next year after posting a massive third-quarter loss. Sure thing I would too as its that easy to get bailout monies.Fannie Mae, seized by federal regulators more than two months ago, posted a staggering loss of $13 per share for the July-to-September quarter, compared with a loss $1.56 a share, for the same period last year. The company's net worth — what it owns minus what it owes — fell to $9.4 billion at the end of September, from $44.1 billion at the end of last year. If that number turns negative, Fannie Mae said it would be required to tap Treasury for help
The new package for AIG was unveiled as the insurer issued new, bleak quarterly results. It lost $24.5 billion in the third quarter after turning a $3.1 billion profit in the third quarter of 2007. Under the restructuring, AIG also gets easier terms on the Fed loans, reducing the risk AIG will have to sell off assets at firesale prices to pay back the government. "This is a very big deal for AIG. It essentially plugs two of the biggest holes that the company had," said Rob Haines, analyst at CreditSights.
Fed officials expressed confidence the money would eventually be repaid to taxpayers, and presidential press secretary Dana Perino said it would also be good for the fragile U.S. economy. The federal help "will allow AIG to continue to restructure themselves in a way that will not hurt the overall economy. AIG is a large, interconnected firm," she said. AIG Chief Executive Edward Liddy called the plan a "win-win." "It sends a strong signal to our policy holders, to government, to regulators around the world, to our business partners and counterparts that AIG is in fact on the road to recovery," he said.
But what they all do not realize is that the rest of the wordl has also gone nuts on spending and this is having a riveting effect on all economies to melt time. How can the USA government control the out of this word spending bu the execs who run these businesses. What they save by having zero salaries they have already milked their owqn systems so its just a matter of tapping funds into pet projects where they benefit another way. It mean nothing yet the Fed will bail the big 3 out.
Its wake up time America. These bailouts are not helping the American people just Companies who have reaped millions in rewards and done nothing to change their strategies over the years. None of them deserve bailouts and the US government cannot run these joints??? so the underlying question is how much of thise bail out money will be spent on themselves---- most of it so watch.
Check out Pattaya/Bangkok Shipping & Transport services
BANKRUPTCY UNDER CHAPTERS 7 & 11
Chapter 11 of the Bankruptcy Code means to "reorganize" the company and try to become profitable. Management continues to run the day-to-day business operations but business decisions must be approved by a bankruptcy court.
Under Chapter 7, the company stops all operations and goes completely out of business. A trustee is appointed to "liquidate" (sell) the company's assets and the money is used to pay off the debt, which may include debts to creditors and investors.
The investors who take the least risk are paid first. eg secured creditors take less risk because the credit that they extend is usually backed by collateral, like a mortgage or other company assets. They know they will get paid first if the company declares bankruptcy.
Bondholders have a greater potential for recovering their losses than stockholders, because bonds represent the debt of the company and the company has agreed to pay bondholders interest and to return their principal. Stockholders own the company, and take greater risk. They could make more money if the company does well, but they could lose money if the company does poorly. The owners are last in line to be repaid if the company fails. Bankruptcy laws determine the order of payment.
2009 Obama is saying as we say the Recession was caused by the finance and banking execs who paid themselves large amounts of bonuses & salaries. These & their board of directors are the ones to blame to the financial collapse.
FEBRUARY 2009: The Treasury Department overpaid for the assets it purchased as part of the $700 billion financial sector bailout, according to testimony of a bailout oversight official before Congress on Thursday. At a Senate Banking Committee hearing, Elizabeth Warren, head of the Congressional Oversight Panel, testified that the more than $254 billion in assets that the government purchased in 2008 are worth just $176 billion - $78 billion less than what Treasury paid for them. Congressional Budget Office estimated that the Treasury has lost $64 billion on its investments in the Troubled Asset Relief Program.