Bloomberg Video: AIG Earnings

Yesterday, I was supposed to do a quick 3 minute spot at Bloomberg, so I headed off to the studio after the close to talk about AIG earnings.

Only the AIG earnings were rather delayed (more than 20 minutes), so I got to babble for a good long time.

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click for video

Aig_bloomberg
Running time 13:38

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Barry Ritholtz, chief executive officer of Fusion IQ, talks with Bloomberg’s Julie Hyman in New York about American International Group Inc.’s second-quarter loss reported today, his recommendation of Western Union Co. and the outlook for the financial industry. AIG, the world’s biggest insurer by assets, posted a $5.36 billion loss as writedowns tied to the housing slump wiped out profit for a third-straight quarter. (Source: Bloomberg)
13:380 AIG, Western Union, Fannie Mae, Freddie Mac

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short embed video (2 minutes)

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Source:
Fusion IQ’s Ritholtz Expects More Writedowns at AIG: Video
Bloomberg, August 6, 2008 19:58 EDT
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avZEKuMTaGME

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What's been said:

Discussions found on the web:
  1. Hugh Son commented on Aug 7

    American International Group Inc., the biggest U.S. insurer by assets, fell the most in at least 28 years of New York trading after writing down more than $11 billion of holdings and saying it won’t rule out raising capital.

    “It’s very hard to predict right now when and if we’ll need more capital,” Chief Executive Officer Robert Willumstad said today in a conference call with analysts. “Future losses can change that assumption and we’re obviously dependent on the condition of the U.S. housing market.”

    Willumstad faces increasing pressure to turn around AIG after the insurer posted more than $18 billion in losses over the past three quarters. The second quarter’s $5.36 billion loss, reported yesterday, was worse than analysts predicted and renewed concern that AIG may need to raise cash by selling shares. Willumstad called current capital “satisfactory.”

    AIG slid as much as 18 percent in New York Stock Exchange composite trading, its biggest one-day drop since at least July 1980. The stock declined $5.11 to $23.98 at 11:21 a.m., leaving the shares down almost 60 percent this year. AIG’s quarterly loss was driven by $5.56 billion in pretax losses tied to credit- default swaps.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aRMdGkQ.ukgg&

  2. Jeff commented on Aug 7

    AIG has definitely “bottomed” though. I just know it. Far too many people are worried about missing “the bottom” for it to be THE actual “bottom”.

  3. mo commented on Aug 7

    Heard this segment on Bloomberg Radio last night. It didn’t sound like babbling to me. It certainly made the ride from Long Island to Northern Westchester tolerable.

  4. MitchN commented on Aug 7

    Nice job, BR. Looking sharp, too!

  5. shtove commented on Aug 7

    Gravamen? That’s some heavy stuff you’re talking.

  6. wunsacon commented on Aug 7

    AIG losses. Increasing employment. Walmart misses. But, the market is trying to shrug it off.

    I ask you: in a situation like this, where you need someone to express anger about the market not going down enough to reflect reality, where is Michael Schumacher??

    I don’t have the stomach (or nearly the technical knowledge) to complain alone…

  7. The Great LIBOR commented on Aug 7

    Barry,
    Great job as always. On the lighter side – I think you’ve been giving that purple tie a lot of camera time. That’s fine – it looks good on you. But… be careful or you will become that “purple tie guy.” Maybe this is intention a la Tucker Carlson’s bow tie.

  8. ssm commented on Aug 7

    Barry,

    You are going to have to write a long paper on your comments:

    1. The market doesn’t sort out this stuff
    2. Shrewd bets made that the government would bail out Fannie & Freddie

    The problem is that the biggest player with the biggest effect in the game is not ‘an act of God’ but ‘an act of Government’.

    If the government would get the hell out of the business of tinkering with the economy the market would do a pretty good job of things.

    Experience seems to be showing us that the biggest problems occur when the government regulators get involved.

    SSM

  9. thomas commented on Aug 7

    have you heard about AIG being recapitali
    zed by some Gulf funds and to be rename Arab Insurance group ?
    ;-)

  10. AGG commented on Aug 7

    “I live in a world where crisis management is the norm, not the exception, and you learn a few things” El-Erian said. “You learn never to underestimate the destructive power of negative feedback loops.”

    From the author of “When Markets Collide”.

  11. JustinTheSkeptic commented on Aug 7

    ssm, perhaps this is where the U.S. falls behind China, because China has the advantage of going from a command economy to a capitalist one, and the U.S. vic versa. If we don’t turn our collective asses around we are going to get them kicked big time! Have you noticed Beijing’s sky-line lately? Their air quality is no worse than ours was during our industrial revolution.

  12. HCF commented on Aug 7

    Don’t forget guys, according to our esteemed friend Dennis Kneale, we’re gonna have “melt-ups” soon. They keep on saying that in a year, we’ll be shocked to see how cheap we could have bought investment banks, etc.

    I would say in a year, I’d be more shocked to see too many investment banks still independent and still in business…

  13. Wes Mantooth commented on Aug 7

    “Say, is that George Clooney in the purple tie?”

    jk Barry

  14. Jeff commented on Aug 7

    How can someone be so WRONG, not to mention annoying, (Neale and a host of others but Neale bothers me the most, by far) and still keep their jobs? Are we officially in “Bizarro World?”

  15. zackattack commented on Aug 7

    I look at BKX as a bear wedge on a short-term chart. I ought to hit the downtrend line around 75-ish if both keep their trajectory.

    Long-term chart, it’s coming back up toward the bottom of the channel around 80-ish.

    That 80 level looks like your entry point, if it manages to get there. Not looking so good on a day like this, though.

  16. Jeff commented on Aug 7

    What flabbergasts and aggravates me the most is that none of the ne’er-do-wells (Kneale, Luskin, Bowyer, and the rest of the perma-bull posse) ever admit that they were wrong or are never forced to admit they were wrong. They simply get more appearances on TV but are never called out for how egregiously wrong they’ve been.

    ~~~

    BR: I did an interview with Barron’s up in Maine, and I called a few people out for being almost always wrong for an entire year.

  17. AGG commented on Aug 7

    By the end of the year the price of a share of many of the big FIRE corporation stocks will be much higher; It’s the old reverse split trick.

  18. ToddinFL commented on Aug 7

    BR

    Closet that tie for a spell. It’s a bit overplayed. Where’s wardrobe when you need them ?

    Good commentary nonetheless …

  19. Jeff commented on Aug 7

    Barry:

    I salute you for calling out these folks for being dead wrong but unfortunately you’re in the minority. What I’d also like to see are these shows “hosts” (e.g. Goldilocks Kudlow) calling these people out for their horrific calls but I guess many of the hosts were also wrong, so they conveniently fail to call their comrades out because it would admitting they wrong as well. Too many mainstream “pundits” are all riding the same incestuous gravy train with the “cool kids”, so there’s no motivation on their part to “rock the boat” with each other by calling these people out. Where’s the integrity or honesty? I’m I just being naive? It’s just aggravating and one reason I stopped watching many of these shows (e.g. Kudlow) a LONG time ago. They’re useless tripe and not even very entertaining at that. I’ll stick to watching baseball every night. Not sure what I’ll do after the summer ends though and winter hits here again in the North Pole (read: Minnesota).

  20. jf commented on Aug 7

    Chinese water torture death of a thousand cuts like a falling knife in the back of the bus to nowhere?

  21. mw commented on Aug 7

    Barry when I saw the interview I was impressed on your “smoothness of delivery”. Every point was made clearly, and right to the point. You hit all the areas of concern with AIG and you explained with great clarity the possible future problems this company faces.. Hats off!.. GREAT JOB! PS…. I am very tired of the media calling this a CREDIT CRUNCH.. let’s leave CREDIT in there but let’s call it by its real name we are in a CREDIT CRASH!!

  22. Joe commented on Aug 7

    Dennis Kneale calling pre-2000 purchases all safe is laughable. Guess he is living in a fantasy land where he hasn’t heard of everyone using their home as an ATM through equity lines/loans. Great job Barry being the voice of reason.

  23. m3 commented on Aug 7

    kill the bold.

  24. Mike in NOLa commented on Aug 7

    Good Job BR. Clarity of thought and speech.

  25. kurtmilne commented on Aug 8

    Great Job on this video Berry! You are on top of your game. Nice to hear your thinking with more than the usual 90 second bits you get on other shows.

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