AIG (AIG) needs more money, it seems, and not just to pay the tab on its $400,000 California resort junket. The Federal Reserve Bank of New York said Wednesday afternoon it will lend as much as $38 billion in additional funds to prop up AIG’s troubled securities lending operation. The announcement comes less than a month after the Fed extended $85 billion in emergency loans to keep AIG from filing from bankruptcy, and just days after the Fed said AIG had drawn down $61 billion of that credit line, in part to unwind securities lending transactions.

Under the new plan, the New York Fed will take “investment-grade, fixed-income securities from AIG in return for cash collateral.” The move will allow AIG to roll over securities lending obligations that aren’t, in AIG’s phrasing, being “rolled over or replaced by transactions with other private market participants.”

AIG’s securities-lending business has emerged as one of the company’s two problem areas, along with its AIG Financial Products business that wrote hundreds of billions of dollars in credit default swaps that, when AIG was downgraded, forced the company to post a huge amount of collateral it didn’t have.

It emerged in June that AIG had broken from the time-honored practice of investing the proceeds of securities loans in Treasuries and similarly risk-free, liquid assets, and instead invested them in subprime-related securities in a reach for higher yields. When the market for subprime mortgages collapsed, the collateral pool eventually lost 18% of its value - sticking the securities lending accounts with billions in losses.

The good news, such as it is, is that the latest loan to AIG, the Fed says, will “allow AIG to replenish liquidity used in settling those transactions, while providing enhanced credit protection to the New York Fed and U.S. taxpayers in the form of a security interest in these securities.”



http://dailybriefing.blogs.fortune.cnn.com/2008/10/08/more-taxpayer-money-for-aig/



Now why are they still bailing this company out? What they should've done was give the money to the taxpayers and let us pay off our debts, and in the process tell AIG to go fuck themselves! As soon as they gave them the money last week, they turned around and spent $400,000 at a resort for golfing and spa treatments, to name a few activities. What type of shit is that? I wonder who was the mastermind behind this stupid ass idea. I guess they didn't realize how bad it would look in the public eye. Dumb ass. And now, after finding out this information, it seems the Feds are ready to shelve another $38B to this company. SMDH. After a while, no one will be buying anything except the things they need to get by, like food and water. We're going to all be in the poor house in a minute.

Pay attention to your money. Check your bank accounts regularly and if you have money in stocks and bonds, or a 401(k) plan of some sort, check your balance DAILY! We'll all be working until we're 90 or so. Just to make ends meet. Lord help us all.