AIG

Nomura has released a report highlighting the stocks with the greatest monthly turnover ratio (the ratio of trading value to market cap). And while overall turnover ratio has increased materially in the US, while not so much in other markets, once again making the case that US stock markets have become an exclusive hot potato gambling center, the monthly turnover of some stocks is staggering with AIG hitting an unprecedented 806% monthly turnover ratio.

I have found evidence that this bank has $32 billion of naked (as in apparently unhedged) swaps on its books - just like AIG. The difference is this bank is bigger, probably has more exposure, and has already been bailed out - several times. Oh, did I mention the insured collateral is nearly half BBB rated or lower??? How about extreme management issues at the top, and I mean all the way to the top. A trunk full of junk, surrounded by drama! It should be an interesting conference call tomorrow when they report, that is if anybody decides to ask the right questions...

Tsy Pay Czar Wants $198M In AIG Retention Pay Reduced -Report

Tsy Pay Czar Wants $45M In Pledged AIG Repayments

Tsy Didn't Take Broad Look AIG Pay Packages

AIG Execs Only Returned $19M Of $45M In Pledged Repayments -Report

A California Court case is headed for a resolution. It looks like AIG is the loser. But that means the taxpayers will suffer. If the case is overturned then the taxpayers will suffer. Another no win situation for the folks writing the checks.

The last part of the Max Keiser interview with Janet Tavakoli. All relevant topics covered.

They just need about $100 billion in new equity for the stock to be worth anything (oh yeah, and a little more dilution). Let the mutual fund managers line up. They can still make their year.

"American International Group Inc.’s equity is currently worth zero, whatever manic depressive Mr. Market may say today. It is likely to remain zero based on AIG’s own analysis of its future over the next few years. In fact, its obligations to the U.S. Treasury would trade at a discount today. The only reason AIG’s stock should trade above zero today is if you believe crony capitalism will fund the birth of an AIG clone—in other words if you believe AIG’s future will be a rigged game."

...or not

A new proposal by MIT professors seeks to involve the Fed directly in the wholesale selling of CDS. According to recent TIC data, perhaps the Fed is doing this already.

The Treasury has provided a substantial FOIA disclosure packet to the good folks over at Judicial Watch. At this point we are awaiting a similar FOIA response from the Fed, which was requested by Zero Hedge previously and we expect to have it within 1 month.

Zero Hedge recently submitted a FOIA to the Federal Reserve regarding information prepared by Davis Polk and Morgan Stanley in their capacity as legal and financial advisors to the Fed in its negotiations on whether or not to push AIG into bankruptcy. We present their response.

There has been alot of talk over the past few weeks about high frequency trading. We have argued that the volume these high frequency traders are creating is not beneficial to the market. Lets take a closer look at what a high frequency favorite stock looks like. The poster boy for HFT this week is none other than 80% U.S. government owned, AIG. AIG recently underwent a 1 for 20 reverse split since the “issuer” wanted to make their stock look more attractive to institutional clients. You would have expected volume in this stock to be reduced by 20x. Instead, volume has remained at a consistent pre split level of 75 million shares/day. How could this be? Did something change to attract more institutional buyers? Did the black hole of AIG liabilities somehow close? No, the answer here is that the High Frequency traders found a new stock to play in.

Marshall Huebner is a person Zero Hedge has great respect and admiration for. The Davis Polk lawyer, in addition to having an impressive work ethic with many successful bankruptcies under his belt (Delta's 2007 emergence being a case in point: in fact, he will likely be making a repeat appearance there quite soon now that Goldman has envisioned another ramp to $200/barrel of crude), volunteers 13 hours every Sunday night as an Emergency Medical Technician - a noble dedication to his community. Marshall's dedication however is not only to his immediate community, but to American taxpayers in general: a little known fact is that Davis Polk is the official yet still formally unannounced legal advisor for the Federal Reserve.

Recently uncovered critical documents disclosing details about AIG's CDO portfolio and collateral calls, indicate that during a December 5th conference call with Investors, Joe Cassano, famous for singlehandedly destroying capitalism and forcing most financial companies to be subsidized by US taxpayers in perpetuity, as well as then CEO Martin Sullivan, effectively commited 10(b) 5 fraud by misrepresenting material company conditions.

Bloomberg out with an article disclosing what every "tinfoil" hat wearer has known for a long time, namely that it was precisely Goldman's collateral extractions out of AIG that were the cause for the firm's collapse, and the ensuing financial catastrophe that to this day has been propped up only thanks to the US government's backstop of nearly $10 trillion in various worthless assets.