by Calculated Risk on 9/21/2009 03:00:00 PM

First a repeat of Eric's great AIG cartoon! Click on cartoon for larger image in new window. Cartoon from Eric G. Lewis

A report on AIG from the General Accounting Office (GAO):

While federal assistance has helped stabilize AIG’s financial condition, GAO-developed indicators suggest that AIG’s ability to restructure its business and repay the government is unclear at this time. Indicators of AIG’s financial risk suggest that since AIG reported significant losses in late 2008, AIG’s operations, with federal assistance, have begun to show signs of stabilizing in mid 2009. Similarly, after a declining trend through 2008 and early 2009, indicators of AIG insurance companies’ financial risk suggest improved financial conditions that were largely results of federal assistance. Indicators of AIG’s repayment of federal assistance show some progress in AIG’s ability to repay the federal assistance; however, improvement in the stability of AIG’s business depends on the long-term health of the company, market conditions, and continued government support. Therefore, the ultimate success of AIG’s restructuring and repayment efforts remains uncertain. GAO plans to continue to review the Federal Reserve’s and Treasury’s monitoring efforts and report on these indicators to determine the likelihood of AIG repaying the government’s assistance in full and the government recouping its investment.
emphasis added