Now in this article I will be discussing the "QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2008" a report pursuant to the account of what actually occured during the global financial crisis of 2008. AIG an american company was at the center playing a major role in the collapse of the global economy in domino effect. The housing market affected AIG's balance sheets very negatively, as soon as the housing market bubble burst. AIG increased real estate investments in the housing matket while also holding a bond portfolio that need agent risk and portfolio management. Lehman brothers also played a major role in the 2008 financal crisis, nonetheless could never be saved from a distressed state because it had an unmanaged over-blown bond portfolio. In addition to reviewing AIG’s results for the three and nine months ended September 30, 2008, this MD&A supplements and updates the information and discussion included in the 2007 Annual Report on Form 10-K to reflect developments in or affecting AIG’s business to date during 2008. Throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations, AIG presents its operations in the way it believes will be most meaningful. AIG’s securities lending collateral pool held strategic review as well as the liquidity issues arising from AIG’s securities lending program and AIGFP’s super senior multi-sector CDO credit default swap portfolio. On Friday, September 12, 2008, S&P placed AIG on CreditWatch with negative implications and noted that upon completion of its review, the agency could affirm AIG parent’s current rating of “AA-” or lower the rating by one to three notches.At September 30, 2008, the aggregate pre-tax gross unrealized losses on fixed maturity and equity securities were $28.7 billion ($18.7 billion after tax).For the three- and nine-month periods ended September 30, 2008, unrealized losses related to investment grade bonds increased $3.0 billion ($2.0 billion after tax) and $13.5 billion ($8.8 billion after tax), respectively, reflecting the widening of credit spreads, partially offset by the effects of a decline in risk-free interest rates.Which threathened the company in to bankruptcy.You can buy my book called "Bear Market trading strategy: A definitive guide to trading distressed securities" to get more insight about trading distressed securities. You can get it on Amazon. To get your hands on this report and my book you can simply search them on Google, the SEC report is also available online or visit my home page.
Tag Archives: 2008 financial crisis
Refinancing mortgage rates
Refinancing mortgage rates are interest rate charges that normally take a period of three to five years. It is a home loan interest that we can normally receive from our personal banking institutions as a means to leveraging in to supplying one's primary need for appropriate shelter. Your bank evaluates the loan, as long as the debtor is able to pay back the loan according to the banks evaluation with collateral. Collateral means anything that will compensate for defaulting in a loan obligation. The collateral is sold in an auction to the par value of the defaulted loan value and rises according to the auction bidding. Loan obligations on mortgages have proven to have negative effects on the financial markets as a whole, a perculiarly good example is the 2008 financial crisis that was primarily caused by the housing market bubble that burst. Following the dot.com or 2000 technology stock market flash crash, investment firms dived into the housing market with enormously large amounts of bond portfolios investments that within a decade devastated the entire financial markets.
Can I lose money while trading the financial markets?
Intellectually and logically, one has to consider the aleatory of losing money while trading the financial markets. When trading the financial markets one is actually in involution to the process of investing. Investing is a process of collocating capital in an asset or security in trim of geniture to profits with the preceedes, however the process involves risky business. Risks that are involved embody geo-political/sovernty risk, market risk, credit risk, interest rate risk, financial settlement risk, and many more. Losing money on an investment is part and parcel of trading financial market instruments, however the aim is making profits on many investments and having less losing investments in a portfolio. A portfolio consists of x,y shares of a company, z bond investment and w commodity investment altogether as one during a particular time span. There are no risk-free investments in the capital and financial markets. If there is such a vasculum, it is called arbitrage in financial terminology. Arbitrage is a case whereby investors are handed out free money at no investment risk. Although bond investments are considered risk-free investments, they aren't totally free from any risks. Bond investment risk is primarily the fluctuation in interest rates and the fact that bond trustees may default on their debt obligations.Well, yes one can lose money while trading the financial and capital markets, no sooner said than done.
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