AIG Still Losing Money and Other Headlines

Fourth quarter GDP was revised up to an annual rate of 5.9% this morning, albeit mostly on inventory adjustments. Furthermore, enthusiasm for the continuation of robust economic growth was dampened somewhat by yesterday's abysmal jobs report. I probably shouldn't even bring up the day before's even more abysmal new home sales numbers, which is considered a leading indicator.

Amidst the erratic economic data, one thing investors and taxpayers can always depend upon is AIG. Like a timex or the energizer bunny, the insurance conglomerate continues to reliably crank out losses, quarter after quarter. AIG posted a nearly $9 billion fourth-quarter loss, which was worse than analysts' estimates but still a bang-up job-well-done compared to the $62 billion it lost in the prior year's comparable period. Or, in other words, the company went from losing $458.99 a share in one quarter last year to only losing $65.51 a share in one quarter this year. Not bad for a $25 stock.

In addition to posting the loss, AIG announced a decision to scrap a plan to use cash flows from life-insurance policies to repay $8.5 billion in debt to the Fed. According to the WSJ: "AIG now believes it can repay the $8.5 billion through other means, such as with cash generated by its insurance business and asset sales." Read a bit further and you get to the juicy part about how AIG's operating loss at the general-insurance business widened, while net premiums written fell and that the company expects that both property and casualty market pricing will continue to decline. So, um yeah, we're going to pay the government back with all the cash generated from our insurance business, which is in decline. A bit further still and we get to best part of the story "AIG won't be holding a conference call with analysts to discuss the results." Enough said.