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Recovery Applies to AIG Stock, Too
The top executives of embattled insurance giant AIG are getting grilled this morning in Washington. And apparently, the market thinks that’s a good thing. U.S. stocks opened down this morning—at last check the Dow had declined 1.3 percent. But at last check (11:45) AIG’s stock had bounced up nearly 44 percent.
What gives? We know Barney Frank is planning to ask for the names of employees who received $165 million in bonuses after the company received a$170 billion bailout. And AIG C.E.O. Edward Liddy called the payments “distasteful” in his prepared statement to House Financial Services Committee. But that’s no explanation for a rally. Maybe investors misunderstood when members of Congress and the Obama adminstration said they wanted to “recover” AIG money.
UPDATE (1:50 p.m.): In his statement, Liddy announced that he had asked some employees of AIG Financial Products, the division that nearly crashed the company to begin with, to give back 50 percent—if not all—of the bonuses.
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