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AIG Posts Profit of $455 Million

Published 11/06/09 Craig Harrington - Print Article
E-mail - editor@economyincisis.org

American International Group, the beleaguered and bailed-out insurance giant, reported its quarterly earnings early Friday morning. According to CNNMoney.com, the firm posted a net profit of $455 million, or $0.68 per share, during the second fiscal quarter of 2009. This marks the second consecutive period over which AIG has made a profit.

Investors seem much more interested in the company; sales of AIG shares are up 189 percent from the previous period. Total stock sales topped $26 billion, more than 10 percent more than the forecast $23 billion.

Despite the profits, AIG is not quite a formidable financial power once again. According to analyst Robert Haines, reporting to Bloomberg News, the firm is still “a sick company” with some fundamental problems yet to be worked out.

AIG Chief Executive Robert Benmosche, who took over control of the company in August, made retaining customers and employees a primary objective of the firm moving forward. American International will have no way of stabilizing itself and eventually paying back its enormous $182.3 billion federal bailout unless it is able to retain its old business while attracting new capital, customers, and talented employees.

The problem with AIG is a sort of microcosm of the entire economy. With GDP numbers on the rise many Americans began to sense some relief. Then it was revealed that the national unemployment average had increased in October 2009 to 10.2 percent.

The slight growth in AIG’s income, as was the case with national GDP, does not accurately indicate how the company as a whole is trending. Share prices are up and new capital is beginning to flow in but the backlog of bad bets and unfunded debt is still blocking any real progress.

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Article Comments From Readers

guest says "The directors of AIG are buddies of the bankers. " on 11/07/09
They are part of the Network. So the central bankers that control the government will look after their friends, and that means giving AIG billions of dollars of taxpayer's money - no questions asked, no conditions.

guest says "Wasn't it the big banks that hugely supported NAFTA and WTO so called free trade agreements whom just recently had to be bailed out by Money Printing which is not free trade" on 11/06/09
During the debates about NAFTA and WTO If I recall correctly, it was the big commercial and investment banks that lobbied hard for the NAFTA and the WTO protectionist agreements called free trade to confuse people. Its amazing how everthing but tariffs and quotas is considered free trade. How ironic is that some of the banks that lobbied hard for free trade had to beg the government for bailouts in which money had to be printed out of thin air which can lead down the road to our money being worth less than before. Where is there defense and belief in Free Trade now.

guest says "Take it slowly" on 11/06/09
It's a good step forward. The US banks and big firms has crashed horrendously after years mismanagement. They are now picking up the pieces but they have to do it slow and manage very carefully by competent and responsible people.