In September 2008, the American International Group, AIG, the largest insurance company in the United States, collapsed under the weight of bad debts incurred from insuring mortgage-backed securities. Although the corporation made significant progress in addressing liquidity issues related to its financial products and its securities-lending activities, in the middle of continued financial market turmoil, it failed to preserve and maximize the value of its business practices for the benefit of its stakeholders. As a result, AIG reported the largest quarterly losses in U.S corporate history, $61.7 billion in Q4.

The Federal Reserve bailed out AIG with an $85 billion loan in exchange for a 79.9% equity stake. Three weeks later, AIG was granted $37.8 billion loan as liquidity for its securities-lending business. Even after these initial infusions, losses continued to mount and in November, the Treasury provided another $20.9 billion under a new program, summing up the total bailout package to $144 billion under three different credit line programs. In March 2009, the Federal government agreed on providing AIG another $30 billion with a fourth program raising the bailout bill to $174 billion. By July 2009, the bailout package had reached $182 billion.

At the same time, AIG became the target of extensive outrage as a result of the $165 million paid in bonuses to AIG senior management and traders that actually caused the collapse. Investors, taxpayers and the public in general were disgusted at the idea of the people who caused AIG’s collapse and financial distress to be rewarded as heroes.

The first immediate impact of AIG bailout is evident on investor confidence. In spite of the increased consumer spending and household income in the beginning of 2009, the AIG scandal overshadowed the markets. Considering that more than the US population owns stocks and other securities and with global capital markets reacting aggressively to AIG press releases and government bailout packages, the US economy and, consequently, the global economy, are affected by the governmental actions to help a corporate monster recover.

Besides, since October 2007 when the Dow was around 14,100 until today that is at 9,750, investors have lost 31 percent of their value. Even worse, in fourteen trading sessions, the Dow has toppled from 8,000 to below 7,000. At the same time, unemployment is at an all time high having affected nearly five million Americans, while productions levels continue to shrink and layoffs surpass any growth.

Technically what AIG was provided is a loan, but, in effect, it is a bailout because without that amount of money the company could have gone bankrupt. Now, AIG not only has to pay back the money, but taxpayers are also hooked with the company since they own, along with the U.S. government, 79.9% of it. The question about investors is how AIG can sell off its assets at a high price when capital markets are still in turmoil and there is not much liquidity in the markets? Wall Street is out of cash and investors are out of faith. So, in a way, AIG paying back its debt is a hope given that the company has a lot of debt in its liabilities. If the market explodes, taxpayers and the government are going to be on the hook for AIG.

Another thing that seems to be slightly misunderstood is the fact that AIG failure is not terrible only because the company was so big, but mostly because with AIG getting out of the picture for having backed mortgage-backed securities, the possibility of a domino effect is evident. Any business or individual that has been involved and has done business with AIG faces the reality of seeing own assets going under. And is such an unstable and weak financial environment this would a nightmare scenario.

The government AIG bailout shows the levels of corruption in corporate America. Before AIG, the common measurement of bonuses was a company’s profitability. If the business was profitable, management was compensated with a bonus. If the business was losing money, there was no bonus involved. After AIG, things got reversed.

On the other hand, there are people who think that government bailout to AIG helped US economy to overcome the depression. However, the experience of previous recessions has shown that the end comes only when inflated prices shrink to a level that allows the majority of people to enjoy fundamental goods of life such as housing, clothing and nourishment.

The U.S. government is on the hook for succeeding in saving AIG for the moment. But, those who will make sure this bailout works are the U.S. taxpayers. The systemic risk that AIG posed in the first place and continues to pose combined with the volatility of capital markets, the cost to the US economy and the governmental inaction does little to re-inspire investor confidence. Even worse, government AIG bailout is a straight attack on the common sense of people. Unfortunately, this will take a long time until it can be forgotten and translated into rising capital markets and attractive stock performances around the globe.

A freelance writer, top MBA graduate with Finance major, passionate about business, finance, history and music; this is pretty much me in a nutshell.

I provide high quality writing services since 2005 in the field of Business & Finance, Movie Reviews, Book Reviews, Health & Fitness, Internet and Relationships. I also have a very good knowledge of Politics and History.

My advanced familiarity with financial modeling, financial statement analysis, capital budgeting and market research has helped me a lot, not only to be a successful professional, but mostly to see life under a more creative and innovative perspective. Besides, having lived for two years in Chicago, IL and Boca Raton, FL and for quite some time in Paris, France has provided me with an international aspect and has enlarged the way I see and understand life.

I currently work as a financial and investment advisor at an international financial institution. Yet, my dream is to be able to make a living as a writer.

You may find me at:
http://christinapomonibusiness.blogspot.com/ http://christinapomonifinance.blogspot.com/ http://reviewsrevisited.blogspot.com/ http://thehistoryculturevenue.blogspot.com/

Article Source:http://www.articlesbase.com/investing-articles/impact-of-government-aig-bailout-on-investors-1357999.html

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Mexico has become one of the most popular tourist destinations.  And just like traveling to other countries and cities, one needs enough information to be able to maximize the experience of staying in Mexico.

Here are some tips to help one prepare for an exciting trip to one of the culturally-rich countries, Mexico.

1.  Learn the language.

Spanish is the main language spoken in Mexico.  Although some residents can communicate in and understand English, Spanish is still the language spoken in commerce.  Spanish is easy to learn and once one has been familiarized with sentence construction, he or she can go far just using an English/Spanish dictionary.

Aurora Lillo Editor of the “Best Hotel Deals” website — http://www.BestHotelDeals.biz — pointed out;

“…Make sure you have an ID with a photo (such as a passport or a driver’s license), your tourist card (which is proof of your permission to visit Mexico) and your proof of citizenship…”

These are the documents that need to be presented before entering Mexico.

3.  Take note of the following items as these are allowed to be brought to Mexico:

Personal clothing, footwear and toiletries in practical quantities
Magazines and books
Personal medicines and prescriptions
Used sporting equipment
One portable TV and VCR and one typewriter
Cassette and records, not exceeding 20
Musical instrument
A set of skiing equipment, fishing equipment and tennis rackets
Alcohol-containing beverage, not exceeding three liters, and 50 cigars or 400 cigarettes, if tourist is over eighteen years old
One still camera and movie camera, with not more than twelve rolls of film

4.  Before entering Mexico, there are two forms to be filled out.  It is better to prepare a black pen for these.  These are usually distributed at the airline ticket counter or while on the plane.  The first one is the temporary visa.  The second form is for the Customs and Taxation called Hacienda.

5.  Although there are businesses that accept foreign currency, make sure that you still have some of your dollars exchanged for the Mexican peso.  Credit cards, particularly, those with MasterCard, Visa and AmEx logo are also accepted.  Bringing traveler’s checks are also preferred.

6.  Drink bottled water or sufficiently boiled water.  Never drink tap water even if the place in which you are staying claim to have a water purifying system.  Before eating fruits and vegetable, wash these in a purifying solution, peel them and cook them.

“… In a location different from that of the originals, store photocopies of tickets and a list of traveler’s checks…” added A. Lillo.

Further information about the cheapest rates on hotels all around the world by visiting; http://www.BestHotelRates.me

With this information, your trip to Mexico will be a safe and enjoyable one.

Philadelphia is a city of historical values and stylish flair. Corporate events in Philadelphia are always impressive as the two blend together for sophisticated occasions. Philadelphia has the opportunity to host corporate events for the large corporations that call Philadelphia its home to University and Hospital events and fundraisers and to National and International corporate events. However, the majority of corporate events in Philadelphia are small and medium size events that take place among the cities finest neighborhoods and establishments.
Corporate event planners find Philadelphia to be a mecca of fine dining and entertainment establishments that are skilled in hosting the perfect corporate event. Events range from luncheons and corporate dinners to cocktail parties and evening entertainment. Corporate events in Philadelphia can enjoy the entire city. Philadelphia’s many eclectic and ethnic neighborhoods give corporate event planners the opportunity to carry theme based events throughout the city. Wonderful hotels and restaurants are tucked away in these neighborhoods.
Philadelphia’s historical waterfront is a fabulous opportunity to see Penn’s Landing and the historical ships at its dock. Penn’s Landing gives the unique opportunity to plan your corporate events in Philadelphia on board the Tall Ship, Moshulu. No other location in Philadelphia can top the atmosphere of dining and entertaining on this majestic ship on the waterfront. The waterfront has easy highway access from any point in the city and is a short walk from the historical district.
Corporate events in Philadelphia are always remembered. This city is so unique that it has many opportunities to impress your participants. The city is filled with history, fine dining and the arts. With so much variety and easy access from all over, planning your next corporate events in Philadelphia will be a pleasure.

Linda Dunkelberger is a freelance writer and editor. The article “Corporate Events in Philadelphia” suggests hosting your next corporate events in Philadelphia. Moshulu, on Penn’s Landing is Philadelphia’s fine dining establishment on board a historical Tall Ship. Moshulu host corporate parties, dinners and evenings under the stars for your next corporate events in Philadelphia

Article Source:http://www.articlesbase.com/food-and-beverage-articles/planning-corporate-events-in-philadelphia-1755088.html