aig (3)


Christmas Came Early For These Sub Sectors

lameduck_matt_605.jpg?width=300Who doesn't love the lame duck session?  It's that special time of year when Santa comes early to Wall Street and you too, can benefit.  As one example, outgoing Congressmen and woman who lost during mid terms, tend to throw in the towel (they won't be around next session anyway) and all types of goodies get through the Congressional pipeline which were stalled during the normal session.  This years winners if you're an investor are:

  • Banks and insurers.  Congress repealed a portion of Dodd-Frank so that derivatives will now be covered once again by FDIC Insurance, thus lowering the risk to banks and insurers like AIG.*
  • Health insurance companies get to keep their special tax breaks.
  • Tourist destinations like Las Vegas get their travel promotion subsidies.*
  • In a victory for food companies, the legislation even makes federally subsidized school lunches less healthy by allowing companies that provide them to include fewer whole grains. This boosts their profits because junk food is less

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Fed To Regulate Insurers?

Moves today in AIG and MET to name a few may be based on speculation whether the Fed will move to regulate some insurers as "systemically important" which was previously discussed in this article on asset managers.  Under Dodd-Frank, the Financial Stability Oversight Council, a newly created super-regulator, can designate “systemically important financial institutions,” or SIFIs, and subject them to rules previously reserved for banks.  Steve Miller, AIG non-executive Chairman shares his view on CNBC.  Full disclosure StockBuz has previously recommended AIG long.

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What's AIG Worth?

Hey technical analysis guys/gals, would love your comment or thoughts:

[Subscriber content from Barrons]

Wall Street derivative traders are wrestling today with how to value the new American International Group (ticker: AIG) warrants the insurer plans to issue later this month to its public shareholders.

Warrants are long-term call options. The value of the warrant is important to assessing the current value of AIG stock since shareholders will get just over 0.5 warrants for each share owned.

AIG stock has been strong lately, rising $1.40 to 61.85 today and up more than 40% since the start of December on hopes for the big insurer's revival and also thanks to the rising value of the AIG warrants.

AIG said today that it plans to issue 75 million of 10-year warrants with a strike price of $45 to its holders later this month, or 0.53 warrants, for each AIG share. When-issued warrant trading is expected to begin on Jan. 13 and the distribution is due on Jan. 19.

The current price of AIG

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