Friday, March 6, 2009

Whopping $62 Billion Loss in 92 Days

American International Group Inc. managed to lose $62 billion in just 92 days. That's nearly $470,000 a minute. And it's more money than Bill Gates' net worth.
The insurance giant's quarterly loss reported Monday was the biggest in corporate history, topping the previous record of about $45 billion set by Time Warner Inc. during the fourth quarter of 2002.

That news came as the government said it would plunge another $30 billion in taxpayer money into the ailing New York-based company, which already has received some $150 billion in U.S. aid since September. The government is bailing out AIG as it could not afford another ‘Lehman Brothers’ which cause a series of serious consequences in the financial market. ($150 plus $ 30 billion and counting – whopping sum for a single bailout and dwarfed our very own bailout in previous downturn!)

The company, first wounded when the housing slump and credit crisis decimated the value of its investments in mortgage-backed securities, is now being hurt by the recession as well. AIG's quarterly loss totaled $61.7 billion for the October to December period, about 12 times the $5.3 billion it lost in the same quarter of 2007. AIG lost more in the fourth quarter of 2008 than it made from 2001 to 2007, when net income totaled more than $58 billion.

This super-sized loss stands out. Take a look at followings:

AIG's loss is more than Bill Gates' net worth of $57 billion as of last September, according to Forbes magazine's "400 Richest Americans" list.

The government provided $62 billion for immediate relief and rescue efforts in the months after Hurricane Katrina in 2005.

If $62 billion was spread across the U.S. population, Americans could each get about $200.

AIG's loss amounts to 92 percent of the $67.4 billion that Americans spent at world largest retailer Wal-Mart in the fourth quarter, which includes the holiday season.

It would take a person spending $1 million per day, everyday, the next 169 years to spend as much money as AIG lost during the fourth quarter, which lasted just 92 days.

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