16 Sep 2008

U.S. Government Decides to Take Over Insurance Sector, Too

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While you were sleeping (almost), the feds decide to nationalize one of the world’s largest insurance companies. Apparently Paulson is the kind of guy that buys every property he lands on; it’s just play money, right? What’s another $85 billion among Wall Street friends? Anyway here are the gory details:

The precise details of the government’s plans were still being formulated late Tuesday. The primary option being hammered out involved the Fed providing AIG with a short-term “bridge” loan of $85 billion, according to people familiar with the situation. In exchange, the government would receive warrants in AIG representing the right to buy its stock, under certain conditions. That could put the government in a position to potentially control a private insurer, a historic move, particularly considering that AIG isn’t directly regulated by the federal government.

HT2 Dietwald Claus for ruining my evening…

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