The Faber Report
- Paulson Funds Report Q3 Performance
- Asking the Wrong Vivendi Question
- Don’t Jump on the Mead Johnson Rumor
- Sprint Back in Takeover Spotlight, But Should It Be?
- Atticus Founder Walks Away, Leaving High Water Mark Behind
- AIG Rallies for Now, but Future Remains Unclear
- AIG’S Big Move
- CIT Looks Set to File for Bankruptcy
- SEC Finally Settles Its 'Koz'
- Beware GM Equity
MOST SHARED
- Kuoni CEO Sees Recovery in Travel Sector
- Gold Retreats from Record High as Dollar Rebounds
- Dubai Struggles to Ease Debt Fears; Investors Rattled
- Chinese Overcapacity is Worsening, EU Chamber Warns
- Fannie Mae to Tighten Lending Standards: Report
- Wal-Mart Price Pressure Hurts China Workers: Report
- China Unveils Carbon Target Ahead of Copenhagen
- Hyundai-Kia Targets Rapid China Growth in 2010
- Great Britain, No Longer That Great: Investor
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- Dubai Struggles to Ease Debt Fears; Investors Rattled
- Japanese Stocks Likely to Fall Broadly on Dubai Worries
- US Dollar Falls to 14-Year Low Against the Yen
- US Companies Already Moving on Curbing Emissions
- Fannie Mae to Tighten Lending Standards: Report
- Investing in Good Karma – and Making a Profit
- Retailers Should Believe in Christmas Miracles
- Bankruptcies Jump, Hitting Highest Level in Four Years
- Steepest Black Friday Discounts, Revealed
RSS FEED
Text Size 
CNBC Anchor and Reporter
WOW…it turns out whoever was covering all those shorts in AIG was right to have done so.
 |
The company’s second quarter earnings (and they were earnings) were well above most investors expectations and have sparked another huge rally in the shares [AIG
Loading...
()
].
AIG’s share price has now advanced more than 100% during the week. While it was a short squeeze that contributed the bulk of that move, today’s upward tide is due to a belief that AIG has found some stability in its business.
That may well turn out to be the case, but it remains far from clear. Most of AIG’s unexpected profits came from gains in the value of assets that it had previously written down in value. Those increases may not occur again. The company’s insurance business remains “challenged”, according to outgoing CEO Edward Liddy.
It is still difficult to understand what AIG will look like and what its earnings power will be if and when the day comes that it removes its many fiscal lifelines from the U.S. Treasury and Federal Reserve. While it is recording interest expense for its loan from the Fed (it’s booking the expense, but not actually paying the interest) AIG is not paying dividends at all on the $41.6 billion of Series E preferred Stock it has from the TARP program. That is something that any normally functioning company would be doing. But AIG is still not close to normal function.
For now though, it’s been a great week for AIG shareholders and I’m sure they’ll take it.
_____________________________
_____________________________
Questions? Comments? Write to .
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Ever wished your cab driver would stop nattering and just get to where you're going? Well that moment is near(er).
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
Data is a real-time snapshot *Data is delayed at least 15 minutes