Troubled insurance giant American International Group will take a $37.8 billion loan from the Federal Reserve Bank of New York, on top of the $85 billion loan it got last month.
(AP) - The Federal Reserve has agreed to provide insurance giant American International Group with a loan of up to $37.8 billion, on top of one made to the troubled company last month.
Under the new program, the Federal Reserve Bank of New York will borrow up to $37.8 billion in investment-grade, fixed income securities from AIG in return for cash collateral. These securities were previously lent by AIG's insurance company subsidiaries to third parties.
Last month, the Fed provided an $85 billion loan to the company, which was on the brink of bankruptcy. And, let's see what they did with YOUR money...
From: Scott Vogel, Washington Post
It's the kind of publicity you just can't buy.
Times are tough in the tourism business; accordingly, hotel chains around the world are pulling back on their advertising buys. But that's okay, there's another way tourist-hungry resorts can gain attention in a down economy: host a retreat for AIG executives.
Consider the St. Regis Monarch Beach Resort on the sun-splashed California coast somewhere between Los Angeles and San Francisco. In fact, the St. Regis seems to be still reeling from the experience, on the evidence, that is, of its "Last Hurrah" package, which although technically designed for expecting couples in need of a babymoon, sounds just as perfect for the bailout-bound.
Oh, by the way, there's a world-class golf course on the premises where the AIG folks recently racked up almost $7,000 in charges; better yet, -- just to keep this felony theme going -- said golf course was once a favorite of O.J. Simpson's.
And after a hard morning on the back nine, what better place to repair to than Spa Gaucin, where "Each treatment begins with the toss of a coin into our 'Well of Desires,' where symbolically all your cares will be left behind." (Huh. Ya gotta think that that well is clogged with pennies at this point.)
By now we've all heard AIG's various justifications for its $440,000 profligacy, how the conference was planned long in advance of the bailout (you know how those cancellation fees can get you), how it was a standard reward for the insurance firm's top sellers, how it was a way to prevent the brain drain that -- let's face it -- often accompanies a company's descent into insolvency.
But let's go back to the St. Regis. No publicity is bad publicity, remember, which is why the resort is booked solid for the next two weekends, according to the Los Angeles Times. And those seeking a room at the next hot spot on the disaster tourism circuit would do well to immediately call Reservations at the Ritz-Carlton Half Moon Bay further up the coast. It's yet another elegant monument to decadence that sits on yet another bluff overlooking yet another gorgeous strip of the Pacific. And next week, the Ritz-Carlton will also have something else in common with the St. Regis: dozens of AIG executives huddling together in style, whooping it up on another junket of dubious necessity in a time of crisis.
AIG executives cancel planned California spa retreat
BY: CORKY SIEMASZKO, DAILY NEWS STAFF WRITER
Still smarting from their spanking for blowing $500,000 at a swanky resort after getting an $85 billion taxpayer bailout, AIG execs have cancelled a planned spa weekend at a posh California hotel.The conference for AIG agents at the Ritz-Carlton in Half Moon Bay next week was scrapped "after a re-evaluation of the costs under the new circumstances," AIG spokesman Joe Norton said Thursday.
Among other things, Norton cited "the need to repay the fed while still serving the needs of our policyholders."
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AIG pulled the plug on plans for a weekend of pampering for a privileged few after the feds agreed to lend AIG another $37.8 billion to stay afloat - on top of the $85 billion the troubled insurer received just last month.
"I cannot fathom how in the same day - the very same day that AIG asked the government for another $37.8 billion loan, the company would even consider moving forward with plans to host another large conference at another large luxury resort," said Rep. Elijah Cummings (D-Md.), a senior member of the House Oversight and Government Reform Committee, which is probing the Wall Street crisis.
This means that AIG will have to figure out another way to "motivate and educate" 150 top agents who were expecting to stay in an ocean front hotel 30 miles south of San Francisco where the cheapest rooms go for $400 a night.
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Among other things, the hotel features candle lit spas and Roman style mineral baths, two championship golf courses, and restaurants that have a tasting menu with wine that costs $167 per person.
Norton did not return an e-mail asking if AIG has cancelled any other expensive junkets for employees and top executives.
But an e-mail mistakenly sent to Bloomberg News revealed that AIG had the chutzpah to consider launching an ad campaign to justify the high-priced junkets.
That's "a really bad idea," AIG's public relations consultant George Sard wrote.
"To spend the taxpayer's money on an expensive ad campaign to apologize for how you used taxpayer money leaves you open to further attacks," Sard wrote to AIG flak Nicholas Ashooh.
Revelations on Tuesday that AIG execs blew $500,000 at the St. Regis resort in Monarch Beach, Calif. drew nationwide condemnation. White House spokeswoman Dana Perino called it "despicable."
Democratic presidential candidate, Sen. Barack Obama, said in his debate with GOP rival, Sen. John McCain, that AIG should repay the U.S. Treasury for spending taxpayer money at the resort.
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