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Amazon’s penultimate Draw | Advantage O’nomics

Holiday sales took fourth Quarter performance to $9.52 billion and they also upped Q1 forecasts to $6.45bn to $7 bn

Amazon seems quite ready to open the war front with iPad, but as of now it is fair for both companies to hedge their bets with Kindle choosing a 70% commission on each sale over a smaller base than the $10 plus billion in real books, while the iPad would like to be compared with Samsung and Nokia,”part of the iPod and iMac family?” This is probably the penultimate fr Amazon to draw but it has one more fight in it to get to $100 billion

Amazon’s Operating Margins YOY growth does not mean much but the margins are healthy at 5% with net income of $384 mn at 4.03% based on the use of cash to drive down costs and get more volumes online. It mustt be remembered that Black Friday was beaten by Cyber Monday again this season. Amazon’s Warehousing and delivery modelling is a treat to watch in liquid motion.

The $2 billion buy back should keep the Amazon investors happy while the Kindle franchise develops more lung power in the market place. Kindle recently reworked its commission structures to 50% for the Author/Publisher

WE WILL WAIT for the content library on the iBook store to be updated for a more valid comparison, Amazon’s market development strategy is economically more powerful in the new digital footprint, while Apple is great at marketing. Amazon is also getting better at publisher deals, so it is a fun game for consumers and subscribers..It’s tempting to get everyone to plan a subscription model in the digital media game, but it hasn’t worked, with or without paywalls. Also an idle mind starts wondering if they can get to Facebook and Twitter to use as a backbone for the next digital age effort?

To reiterate our stand, Amazon has single handedly done more to bring this economy out of recession than the others in the Top 100, tech or mobile or even Media

High speed trains, lower Job claims, the ‘uprising’ is here and USA won’t be number 2

America liked Clunkers’ speed,

Caulkers are Green?

If you hated Obama administrations climate Change plan, America’s denizens could soon put you in a minority. Because Obama has found a way to spend the extra cash he saved from TARP ( see O’nomics:wow-it-might-add-up-advantage-zyaada/)  I have been unable to catch this anywhere else except our Time Warner scoop-a-thon CNN Money yet, but it is a valid program after the unprecedented success of Cash for Clunkers that kept erstwhile and current homeowners busy in August, September and October

President Obama proposed a new program Tuesday that would reimburse homeowners for energy-efficient appliances and insulation, part of a broader plan to stimulate the economy.

The administration didn’t provide immediate details, but said it would work with Congress on crafting legislation. Steve Nadel, director at the American Council for an Energy-Efficient Economy, who’s helping write the bill, said a homeowner could receive up to $12,000 in rebates.

The proposal is part of the President’s larger spending plan, which also includes money for small businesses, renewable energy manufacturing, and infrastructure.

We know energy efficiency “creates jobs, saves money for families, and reduces the pollution that threatens our environment,” Obama said. “With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs.”

The program contains two parts: money for homeowners for efficiency projects, and money for companies in the renewable energy and efficiency space.

The plan will likely create a new program where private contractors conduct home energy audits, buy the necessary gear and install it, according to a staffer on the Senate Energy Committee and Nadel at the American Council for an Energy-Efficient Economy.

Big-ticket items like air conditioners, heating systems, washing machines, refrigerators, windows and insulation would likely be covered, Nadel said.

Consumers might be eligible for a 50% rebate on both the price of the equipment and the installation, up to $12,000, said Nadel. So far, there is no income restriction on who is eligible. That would mean a household could spend as much as $24,000 on upgrades and get half back.

via Cash for Caulkers could mean $12K per home – Dec. 8, 2009.

Things are looking up too! Bernanke is. | O’nomics

Watch our related post on how we have the snowmobile working to clear the c’congested’ road out to work..(TARP)

Well, all we needed to get on the road was pleasant musical carols singing we have cut down the debt..people almost rose to the occassion, refusing to pull out credit cards, but consumer credit overall is up with spending on cars and other personal loans..mortgages haven’t really taken off yet only the superbargain homes being bought up at less than $100k from foreclosures..Out here in the emerging markets, you can’t get easy credit for more than one home per family too and that might still be something to do for Bernanke ( if he makes it!)

October consumer credit outstanding fell at a 1.69 percent annual rate to $2.48 trillion. September’s figures were revised to show a $8.77 billion drop, previously reported as a $14.8 billion fall.

Analysts polled by Reuters had forecast consumer credit dropping by $9.5 billion in October. Consumer credit has now declined for nine straight months.

Confronted with the worst labor market in 26 years, consumers have been reluctant to spend, raising doubts that the fragile economic recovery might falter once the stimulus from government spending runs out.

“Households are still in the process of deleveraging. They are increasing spending, but its coming out of the savings they have accumulated during the recession,” said Bernard Baumohl, chief global economist at The Economic Outlook Group in Princeton, New Jersey.

“They are not acquiring new debt. We need to have consumers ramp up their spending if this economy is to continue to grow through 2010.”

Nonrevolving credit, which includes closed-end loans for big-ticket items such as cars, boats, college education and holidays, rose $3.44 billion, or at a 2.59 percent annual rate, to $1.59 trillion.

via U.S. consumer credit decline slows in Oct | Reuters.

Wow, It might add up! | Advantage zyaada

This is the jumpropes that you need to give the economy a kicker. But still, there is no snowplough :) And there is still that windscreen covered in snow, you broke the snow-brush too. But seriously, it need not all be that bad..$200 billion accounted for as saved from the TARP funds means a lot, a humongous amount. And this does not include the GM stock you will be able to sell soon. Some Citi stock as well..The other Sovereign funds made a lot of money. The US administration will too. Another $110 billion is said to be ok to be released for jobs in infrastructure reconstruction for which someone has found enough funds available. It just might add up..

People who found Friday’s report useful may not be driving with their head clearly. This is unlikely to bring in benefits before end 2011. What the heck! everyone takes a little time in passing funds from A to B and this one is the entire economy. A lot of retailers had a bad Thanksgiving despite every thing we said..on the other hand, Nordstrom did better..Amazon did great too But we”ll keep posting the data as it happens. I guess this will go the way healthcare did and people would be more jumpy than working to make it happen. Ouch! that hurts. O in the Oval Office not the one that retired in 2011, that O he still has negative approval ratings, Rasmussen reports didn’t swing too hard.

President Obama is expected to announce Tuesday that he wants Congress to redirect a certain portion of leftover Wall Street bailout funds toward job creation measures, White House officials told CNN.

That would come on the heels of news Monday that the White House was reducing the expected loss from the bailout by $200 billion. Potential job-creation ideas include building roads and bridges, “weatherizing” homes to reduce energy bills and lending to small businesses.

via Obama: Use TARP for job creation – Dec. 7, 2009.

In related news, Japan’s PM Hatoyama and his Democrats may run out of ‘charisma‘, and the ‘chamatkar’ [wonder, magic, sorcery, origin hindi] required to come back to power as it tries a stimulus refill in a long despaired Japan..

Japan’s government agreed on a $81 billion stimulus package on Tuesday, aimed at preventing the economy from tipping back into recession as deflation persists and a strong yen threatens exports.

JAPAN |  ECONOMY

Economists said the 7.2 trillion yen plan, equal to about 1.5 percent of gross domestic product, would not provide a significant lift to an economy dependent on overseas demand for machinery, electronics and cars.

While several other economies are already debating phasing out economic stimulus deployed to fight the financial crisis, Japan continues to struggle amid chronically weak consumer demand and falling prices.

The above news was also featured here on our favourite Livemint ( like a couple of pet WSJ writers featured earlier)

Is this the new sponsoring club for American retail? | Reuters & Bronson Point

Two hedge fund veterans who worked at SAC Capital Advisors, LP and Pequot Capital Management, long considered among the industry's most successful, are launching their own firm next month, people familiar with the matter said on Monday.

Larry Foley, who had been a senior portfolio manager at SAC from 1994 to 2008, and Paul Farrell, a member of Pequot's executive committee and co-portfolio manager of its Scout Fund Group, plan to open Bronson Point Partners on January 1, 2010.

Foley and Farrell’s pedigree will likely prompt many hedge fund industry investors to give the pair a close look. But how much money the men will actually manage to raise remains unclear at a time when investors are becoming ever pickier about where they commit their capital.

To woo potential clients, Bronson Point’s principals said they have committed at least $25 million of their own money and promise a “disciplined approach to fund-raising, organic growth and risk management.” They will concentrate on U.S. stocks, running a so-called long/short equity strategy.

Investors traditionally want to see fund managers invest part of their own fortunes, with plans to expand the fund in a measured way.

To get into Bronson Point, investors need to put down $1 million, an average figure for most small hedge funds. It will charge a 2 percent annual management fee plus an incentive fee of 17 percent to 20 percent, depending on how long investors agree to leave their money with the new firm.

Bronson Point in its brochure promises to use an “opportunistic approach combining fundamental research and active portfolio management.” The team, which also includes ex-SAC trader Jonathan Marcus, said retailer Bed Bath & Beyond (BBBY.O) and regional sporting goods store Hibbett Sports (HIBB.O) are among the fund's core holdings.

Read our analysis here The American Lifestyle Economy needs something drastic | Our Seeking Alpha zyaada | The investment blog

via Ex-SAC, Pequot managers to launch hedge fund firm | Reuters.

How WSJ thinks you can make $20 billion – Ha HaHa

It is the end of the year and crisis or no crisis sycophants and foxhole investors are back at what they do best..Witness this precious piece from Gregory Zuckermann in WSJ on John Paulson’s lessons. The ignorance and the lack of polish shines through in another woeful attempt by a media person and countless ‘investors’ or shadows thereof. So i felt bound to finally take the plunge and make matters right. You see, this is not how the Greatest trades were made. ( Link to the article is really superfluous, you can meet umpteen such articles in the financial media and even find ranches in Texas that would hold dinner galas spouting much the same philosophy.)

You see, this is not how the Greatest trades were made. ( Link to the article is really superfluous, you can meet umpteen such articles in the financial media and even find ranches in Texas that would hold dinner galas spouting much the same philosophy.) Also, the book is available from Amazon.com here Our comments are on Gregory Zuckerman’s ‘Lessons Learnt’ post in WSJ (Financial Adviser) The Amazon link with cover is also available on an alternative version of this post

1. Listen to your experts : And this is serious. The man who says the crisis teaches us to “Don’t rely on experts’, he s just taking time off to be a papa stooge. The experts not only have an edge on the information, they also have a ‘record’ behind them. But yes, don’t take one source for granted, be sceptical, trust your judgment

2. Bubble trouble – True. Everyone doing the same thing at the same time changes things. But the tectonic shift is not necessarily better always, or bad OR Black Swan either..and don’t ever use your nest savings..we are never even talking about it. Better still, for this take advice #1 and add to it..Dine with your experts..take an evening walk in the park with them, and don’t forge to be nice to them. This one also is not the excuse to shout and scream like Osama bin Laden, nor does that make you and your investments any better – or grade worthy – or worth selling low and buying high

3. The Contrarian point – is a studied viewpoint, not an allergic reaction to the expert’s makeup and Maria’s sartorial and travel lifestyle ( as ‘reported’ on CNBC. Drink it in with beer at dinner and wake up in the morning to drink another coffee..raving and ranting is counterproductive to gray cells..not the drinking

4. Focus on Debt Markets – That is a great lesson from this crisis. In fact that would even give us some breathing space when we try to avert the next crisis. There is an imperfect natural hedge there, and it saves us, esp when everyone starts thinking of OIL and GOLD too..those times or in a normal economy bubble or ultra mega size bubble, you need to see that the debt is at any time no less than 5 times the size of the entire Global Equity market investments and that is a lot, in fact what went out of equity went to bonds and then it will come back from there too..

5. Master new Investments – On the dot. Exchange Trading Funds are a good idea. Publicly traded debt in india, China and the N11, G8+3 not so much. So here, listen to more than one expert. Read us here. and don’t feel like Bruce Willis in Die Hard, Make the calls and ask around. That gets any thoughts of crises from developing, esp not overnight and not a crisis of the household budget

6. Use Derivatives to your advantage: Getting that safety net in place is harder to do with just CDs and real estate. You need to balance the equation more than once every year. Realign to a new fact or facts. Don’t sit on it. and then making a jump to new products is easier, and the ill-informed salesperson is unable to fool you into buying unsecured, unpayable. ETFs are a great place to start.

7. Reconstruction is the key. So is infrastructure. Keep your eyes open. 3 out of 5 ETFs are going to fail. Derivatives by their nature are going to leave someone stranded again. It will happen. So will real estate, and Lehman Bros. and in fact next time the cash buried in the backyard would not be safe either. Get used to a little higher risk. start small.

8. Experience counts. On the dot. But hero-worship kills, indiscriminately

9. Luck helps? See 1 to 4 above and redo the equation . Talk to us. Talk to your neighbourhood broker. All investment classes are inherently the same once you have figured them out. They make money if they are right. and if they are right they work for you. and your friends.

Paulson made his greatest trades after he had made a few winning trades every year. that is the only thing to learn, rest is the debate..and hating the experts is only handing America’s markets to the Osamas of the world..

Also if you are a corporate denizen, take a lesson from the lady that failed to catch Cadbury and her investment bankers..you go in with only one price and you come out empty handed.

[Tag Paulson, investing, US, Retail Lifestyle, Wealth]

A leg of tweets .. Holiday season in the US 2009 & Bank results

Barack Obama is learning testimonial marketing on the ground for healthcare, clunkers are away and superbowl is already 2/3rds sold with Red Sox and Cardinals falling away to give a sticky brand even with fat expenses for Yankees, Phillies and both the LA franchises ( Dodgers – NLCS and Angels – ALCS, for the newbies)

In Asia, IPL has taken root, Champions League has shown the other Cricket brands in the Commonwealth and probably US has a couple of teams switching from Soccer to T20 Cricket this time :)

Closer to where it hurts, Apple is redesigning Disney retail ( one last time?) IBM is riding god knows what hopscotch strategy, and Amazon and Walmart are getting ready for the holidays – some more would be shutting down this time in the face of retail discount wars…

Funding new infrastructure..a global imperative The new USA with new infrastructure « Obamanomics http://bit.ly/3kSJ2k
about 3 hours ago from HootSuite

Apple is not going to ruffle anyone as Windows 7 brings $MSFT back into the game (by the by, just to wake up your senses before dinner ..)
about 5 hours ago from HootSuite

Two-thirds of Superbowl AD inventory was sold/booked even before Week 1 of NFL..and there is six more months for the “new” network CBS
about 6 hours ago from HootSuite

Dow 10K definitely took its time coming! G’night all
about 13 hours ago from HootSuite

Gas sales ( At pump) down 25% from last year ( US, September 2009)
about 16 hours ago from HootSuite

car sales dropped 10% in september “After Clunkers” shock, October shd indicate holiday season
about 16 hours ago from HootSuite

$GLD up above $107..can it cross $115?
about 16 hours ago from HootSuite

Why is $CI getting such a great buy rating? One can’t believe the industry’s whitepaper of all things! The fool’s in goop http://ow.ly/un4a
about 16 hours ago from HootSuite

I am not so sure I got any follow up report of InBev’s amusement parks’ sale? A $2 billion business..
about 16 hours ago from HootSuite

Goldman Sachs $GS scored pretty much lower in Securities services and investment banking income in June ..a start of a bad trend? #Q3results
about 16 hours ago from HootSuite

The 0.9 t Balance sheet of GS could easily grow to $1.5 t by tonight :) as 713 billion is just investments with MTM 2b upped after reval !!!
about 18 hours ago from HootSuite

Will $GS follow $JPM into the emerging markets, and expand globally? $GS earnings could far exceed expectations of $4.24, JPM likewise
about 18 hours ago from HootSuite

$JPM Treasury and Custody Portfolio of $16 trillion likely to grow along with fee services of investment bank.. Buy to USD 60-65 in 2009
about 19 hours ago from HootSuite

And after receiving the Nobel Peace Prize! RT @barackobama humbled.
about 19 hours ago from HootSuite

Sign here! RT @barackobama Health reform just took a huge step—but the insurance lobby is.. Urge Congress to pass reform: http://u.nu/6jhi3
about 19 hours ago from HootSuite

$JPM reports restructuring with Jes Staley taking over as CEO at the $1.9 billion richer investment bank, Mary C Erdoes takes over at AMC
about 20 hours ago from HootSuite

$JPM reported a further $2 billion added to loan reserves and $3.7 billion in extra charge offs in retail, Credit card losses of $700 m
about 20 hours ago from HootSuite

$JPM and $GS results of $3 billion profit may look very different if unrealised gains on their fixed income portfolio are not included
about 20 hours ago from HootSuite

$OIL at $75 looks precarious, $FXE looks well done at 1.50 Can equity look subdued after the banks have published “rosy results”?
about 20 hours ago from HootSuite

If the Chargers win today, they will likely meet the Blues for the next KITA motivation #clt20
about 20 hours ago from HootSuite

Welcome @hotshotsin to the Advantage zyaada fold @zyakaira @zyaada
8:13 AM Oct 14th from web

Gyancafe follows http://advantages.us/brands for updates on Sports Marketing, IPL and social media #clt20
7:48 AM Oct 14th from HootSuite

By @zyakaira Cape Cobras meet Victoria Bushrangers in the Super League Kickoff #CLT20 Sad day for Wayamba and Sussex #clt20
7:48 AM Oct 14th from HootSuite

By @boutred :ask for analysis CIT debt swap struggles, bankruptcy looms: NEW YORK (Reuters) – CIT .. http://bit.ly/9hApR @zyaada
7:47 AM Oct 14th from HootSuite

Wonder how soon we can extend the IPL club brands to Cape Cobras and the Sydney Blues ( sponsor the SA/CA teams) #CLT20 #ipl

Limited Sale of Toxic Assets | Marketwatch

zyakaira notes:

You would have also noted the change in IMF estimates bringing the potential industry losses to $2.8 trillion of which less than half have been recognized as of yet in hope of recovering asset prices. European Banks are as usual the bigger perpetrators, not having recognized these losses. Needless to say, Private investors stayed away as use of government capital, provisioning and IFRS are being put into limited use by the global banks not used to disclosures and public vilification..retail interest is almost non existent, much like the early years of debt markets in Asia and now in Africa as people compare the risk and the return unfavourably with good old Gold and Oil

Private investors have injected $1.13 billion of funds into a much-anticipated Treasury Department program seeking to remove toxic mortgage securities from financial institutions, the Treasury Department said Wednesday.The plan, known as the Public Private Investment Partnership, or PPIP, has the Treasury investing up to $30 billion of equity and debt into the program to match as much as $10 billion put up by private investors. Treasury will match up to $10 billion in equity from private investors along with as much as $20 billion in debt financing.The purchases would be made through auctions, and the government financing and equity was included to give the private investors an incentive to participate.As part of the initial investments, Ivesco Ltd. And The TCW Group Inc. have each committed $500 million to the program.The $1.13 billion of private capital has been matched 100% by Treasury, representing a total equity capital commitment of $2.26 billion. Treasury also is providing debt financing capital bringing the total purchasing ability of the firms to $4.52 billion.”I am pleased with the progress we have made in launching PPIP,” Treasury Secretary Tim Geithner said in a statement. “This program allows Treasury to partner with leading investment management firms to increase the flow of private capital into the market for legacy securities and give taxpayers a chance to share in the profits.”Treasury acknowledged that the program is much smaller than it initially envisioned because “financial market conditions have improved.” The program was originally envisioned to remove $1 trillion of toxic securities from financial institutions. However, Treasury said it would expand the program, if needed.

via Investors raise $1.13 billion to buy toxic assets – MarketWatch.

Gaining market share in Life Insurance

The New York Life Insurance Company, 9th till last year, jumped to No. 2 in market share behind Metlife with a near 6% market share in Life taking a leaf out of the book of the World’s best. AIG dropped just 4 places in the whole melee of the stimulus and this continuing depression. New York Life simply ‘educated’ prospects about how it was properly capitalised and fully ready in case of any further financial breakdown, bringing it a whole lot of new business ( see story: Slump spurs grab for Markets)

NY Life always had a vibrant sales force and with its diligent processes and adequate attention to current relationships, it has also managed to keep its existing customers happy, increased its share in market friendly Variable Life plans and kept its leadership in Whole Life plans for more than a decade. There is definitely one underlining factor that believers in the risk driven markets model do not realise. The underlying fact in winning is sanity in leadership and focus on the good pieces of business. It is not about Richard Branson and other half baked half thinking brazen tomfoolery like at BofA after the purchase of Merill ( there are some Indian examples that you can also read at http://zyaada.info Or http://india.advantages.us ) or the GOP reaction to Obama’s healthcare plans. ( And how is Obama’s plan going to make insurance cheaper? It does not seem to be the issue at all!!)

New York Life also lost $3.5 billion on its investment portfolio like the other big banks and AIG but Metlife having taken all of the business headed for AIG ended up with a sky rocketing 12% market share and NY Life managed to increase market share by a further 180 basis points. True, NY Life is but a can of soup for those hit by the recession opportunity..because there are other ways to beat the old leaders in the recession.

One of these popular ways this time has been to give jobs to out of work investment bankers from Goldman Sachs, Lehman and others at Deutsche Bank and some boutiques, that were not owned by these ex bankers.  However, Deutsche Bank has already been caught in trying to beat the losers of the recession, continually facing funds shortages in the market and hungry for Capital after market adjustments caught up with its losses.

Yet it is relatively easier, and thus there is an opportunity during a bad recession to catch up with the falling Joneses and come up ahead in the race. It visibly happens in retail in the Coke vs Pepsi and the P&G vs others wars (Unilever in Asia and Europe) or in GM vs Ford, but is equally vehement in markets in banking and insurance. Competition is the life blood of the economy and without such acts it is very difficult to beat any recession.

On a relatively obscure note, that is also why banks running away from Asia are unlikely to survive in the coming decade, as the growth and the money here ensure that the growth is sustainable, and Life and P&C entrants in this market would also do well to learn more regulatory control from the economies in Asia that remained capitalized and capable despite investments sinking..but then that is another article altogether.

AIG sells fast to make $80b

AIG (used earlier)AIG is in quite a turn having to sell most of its profitable Asian and other International Insurance and Investment Management Businesses ( also see here)

While it announced the division of its businesses into AIA + Alico in Life in Asia, Chartis for Property & Casualty and the Domestic US insurer, it has not gone much further. Till date it has sold the following:

1. Energy & Infrastructure Assets for $1.9 billion : A power generation plant operated by First Energy, a tax equity interest in a Texas wind farm and two lease equity interests in rail car portfolios. Earlier the AIG financial products unit sold an interest in Tenaska Marketing Ventures, its interest in two volumetric production payment transactions and its stake in three Spanish solar power plants

2. Hong Kong based Consumer Finance Unit for $627 million

3. AIG Systems Solution, its IT Outsourcing Unit sold to Mphasis (800 staff would have easily netted $35-50 million but not more than $75 million with all premium) which is likely small change of Rs 225 crores

4. It has earlier sold its Canadian Life subsidiary for $308 million and its Aircraftleasing business ILFC is expected to fetch less than $2.2 billion (assets worth $7 billion)

5. Its Life Insurance Premium Finance business was sold to Wintrust Financials (Ill.) for upto $740 million

According to Businessweek in a report published on Sept. 23, 2008, the Credit Suisse Group (CS) put an aftertax value on AIG’s assets at anywhere from $94 billion to $122 billion. The final tally will depend on how big a “distressed discount” it will face.

It is trying to sell the following for which deals are in process:

A. AIG Investments ( see article here) Earlier proposed to be bought by Franklin Templeton and Temasek, they are still being tracked by Crestview partners and Religare Enterprises of the erstwhile pharma major Ranbaxy. This sale will net at least $300 million, while AIG is likely holding out for $500 million for $80 billion AUM. AIG Investments has lot of fresh investments in Africa and Latin America (private Equity funds)

B.  The Global Real Estate Management Business with $12.4 billion in assets and $5.2 billion likely has suitors for $9 billion including the AIG and TARP advisors Blackstone(BX) and Blackrock. According to the dealcom, the Japanese HQ itself is worth $1 billion

C. The AIA and ALICO IPOs could net $25 billion including purchases by Benmosche’s erswhile Metlife, for which Benmosche will have to clear conflicts of interest ( by staying away from negotiations?) . Benmosche owns about 2.5 million diluted equity ( incl options ) of Metlife

D. Private Equity boutiques like Lightyear have shown interest in AIG advisors. Surprisingly, no such interest from the PE firms has come in AIG Global Investments. AIG ADvisors includes AIG Retirement Advisors ( Sage, FSC and Royal Alliance) which has lost 1 in 6 of their Advisors. As is the norm, most of the first bidders including Warburg Pincus have retreated, and the situation is very tense

E. Chartis carved out of all of AIG’s P&C business desires to sell a 20% stake through IPO

F. The Taiwan Life unit: The recent laundry list of asset sales planned by AIG see here continues to find conflict of interest in almost each of its deals, as AIG remains the buck stopper of the entire industry’s claims good or bad.. also this unit (Nan Shan was out of cash earlier last year)

Though some of the initial deals have gone well, each of these deals seem likely to be pie in the sky w.r.t valuations and AIG faces a challenging task ahead.

On the other hand it has been stuck with proposals to sell $20 billion worth of AIA and ALICO Life Insurance in Asia, and another 20% in its restructured Chartis business (P&C) and is not likely to get a price that will pay off the expected debt out of the $80 billion outstanding. They have however made proprietary profits to pay off $2.67 billion in the 2nd Quarter, which is not much considering its global assets in life are $560 billion !!

references via thedeal.com