Bob Moon: What's the rush? That's what investment consultant Chris Whalen was asking today at Institutional Risk Analytics. He says the government seems to be in a hurry to get the word out that it's aiming to start unloading its $49 billion in AIG shares within the coming year. Whalen warns the market isn't ready and won't support it.

Chris Whalen: We're trying to do a public offering of shares in a company that can't stand by itself, that has to have government support. That's not going to work.

Flooding the market with shares, he cautions, is a money-losing proposition. He says it's the same catch-22 the government faces with General Motors, and has already run up against trying to sell its Citigroup shares. Gauging by AIG's total market capitalization -- the value of all outstanding shares -- he argues the idea of taxpayers making all their money back is pie-in-the-sky.

Whalen: The market cap of this company is single digits. They owe us $100 billion, right? So what the market's telling you is that the company is worth, today, a tenth of what they owe us.

Read or listen to it all.

Filed under: * Economics, Politics • Economy • Corporations/Corporate Life • Stock Market • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • The September 2008 Proposed Henry Paulson 700 Billion Bailout Package • The U.S. Government • The National Deficit • Politics in General • House of Representatives • Office of the President • President Barack Obama • Senate • * Theology • Ethics / Moral Theology

1. Br. Michael wrote: It’s probably for political reasons.  No surprise there. September 30, 9:40 am | [comment link]

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