Thursday, September 18, 2008

AIG Loan
I was talking to a knowledgeable financial person yesterday, and he thinks the Government's loan to AIG is going to make the Government some big money. AIG has significant assets and stripping these out will easily repay the loan. I agree, and I think the loan will be repaid in less than two years, too. The loan terms show Hank Paulson's Wall Street savvy. He got a two-year loan at Libor plus 8.5%, and it controls management. What banker wouldn't like those terms. The Wall Street Journal has an article today on the unknown nature of the Government's loans and their profit potential.

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