Meet the new and improved AIG

It now has a reputation as a terrific, safe earner.

By Jim Cramer Sep 11, 2012 8:56AM

TheStreet.comTrying to find $13 billion to get into a secondary is no mean task in this market.

 

Yet that's what funds had to scrape up Monday if they wanted to be in on the big AIG (AIG) deal, one that is regarded as a virtual cleanup of the U.S. government's position, because the rest isn't big enough to be considered a true overhang.

 

With declining participation, money out week after week and a financial sector with little momentum save a couple of days lately, there's not a lot of spare change to get into the deal. I think that was a major reason for the hideous reversal in the last hour: raising cash to be in this deal.

 

We have been advising Action Alerts PLUS subscribers to take down as much AIG as possible because of the earnings momentum here as well as the discount to tangible book value as it trades at about half of it. AIG is actually trying to bring out value.

 

I tire of hearing from Hank Greenberg, the man who built AIG, because, while he didn't destroy it himself, he did set up a world where cowboys with no data insured the uninsurable.

 

Those days are over now, and Robert Benmosche has turned AIG into a very good insurer that makes money around the globe. That business and the fact that the government scrubbed the books clean while it owned it have given AIG a reputation as a terrific, safe earner that makes it all the more likely that this stock works. There's still tons to buyback, and obviously this is not a chimerical buyback.

 

But nothing I write is revelatory to those investors who tried to sell stock to get into a deal that was tightening up by the hour.

 

That meant you saw a ton of unrelated stocks coming in as capital was raised, including stocks as diverse as Apple (AAPL), which was easy to sell after this run, and Google (GOOG), which has had a most-favored-nation run -- based on what, I do not know, other than the fact that it is in the headlines a lot and is inexpensive.

 

So with the capital raised for AIG, let's see if the worries about Germany and the Fed develop into two more Big Bad Events that simply have to be gotten through. I know I probably should be sweating the Spanish program, too, as the government there is supposed to go hat in hand yet is showing some unneeded and unnecessary pride about the whole thing. You know, for all things Spain, I take my cue from Banco Santander, and the fact that it has remained strong during these headlines tells me that the worries there are, indeed, overblown.

 

Jim Cramer, TheStreet.com


 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long AIG and AAPL.

 

 

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22Comments
Sep 12, 2012 6:17AM
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Sep 11, 2012 10:41PM
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Screw this.

 

Get out your cheerleader pom poms.                                Here we go!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

Down grade America Moodys!

 

I miss the emoticons.

 

 

 

Sep 11, 2012 8:07PM
Sep 11, 2012 5:23PM
Sep 11, 2012 5:04PM
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Jim, should i buy Bear and Stearns?

 

 

Sep 11, 2012 4:17PM
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Did you know Jim, that AIG is releasing US workers and hiring people from Malaysia now? Isn't that something Jim? The American people bailed this company out and now outsource overseas. How do you feel about that Jim? Wouldn't you say that's a slap in the face? Why not leave the jobs here and assist the unemployed? Why is our Government allowing this to happen, when the American people still have ownership of this company? I guess it's just all greed. God help us...
Sep 11, 2012 3:55PM
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It is just not the same company anymore. I base this on family members who have or do work in the insurance industry. One currently works for AIG. Another was a top executive with an AIG competitor. I'd buy it but I'm invested to my limit and won't sell other stocks to do so.
Sep 11, 2012 3:36PM
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This is the same idiot that said to buy Alcoa. After his recomendation pushed the stock up a very little, it went down fast. Don't make the same with AIG. I know as was associated with AIG and left with very little respect for this company. 
Sep 11, 2012 3:02PM
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Only short-seller not heard from this week is Anthony Mirhaydari so watch for it and do the opposite !!

More than likely another piece after QE3 on how he "predicted" QE3 was coming and why. OMG. I want to know if this market is going to sell off before December or if we should stay long.

Sep 11, 2012 2:54PM
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With QE3 about to break, be aware that EVERY speaker on MSN MONEY is either a former or current pump-and-dump artist or short-seller. With the government out, touch AIG at your own peril. I blame Bush for this AIG debacle. With only 6 crooked czars watching the entire government and the SEC compromised, our system nearly collapsed. It took 32 MIT-trained Obama czars to repair it to where we are now. Romney says like all the other GOP that they believe in less government but what they really mean is having less government oversight so government can illegally aid and abet their buddies and rush in to help BIG OIL when the dictators they are bribing get in over their heads. Never again will I believe anybody wealthy running for the white house who shrouds themselves in the bible, lies and refuses to discuss their plans if they become President. Even the crooked FOX NEWS was shocked at how badly his convention went. I also blame Walter Cronkite for breaking with tradition and giving his personal views on the Vietnam War. This ended the unbiased reporting by the media and led to the sad fake entertainment news we get today like FOX NEWS where scantily clad idiots prostitute themselves to the religious right. In reality, the Republican Party is dead. They are so far to the right now they make Obama look whiter than Cllinton. Vote Obama and end the madness once and for all. And until we get more details after QE3, ignore every story stock on MSN Money.
Sep 11, 2012 2:22PM
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In defense of Hank Greenberg at AIG, the guy was just a born man of new concepts.  I agree with Jim Cramer too, that the dream of new concepts in this particular area of finance just plain and simple had no place, and regulators, I am sure are equally at fault.  So, with the mess cleaning itself up, AIG to me looks like a good target for Warren Buffett.  Some people think the feelings between the US Govt. and Warren Buffett might be too close.  Can you say sweetheart deal.
Sep 11, 2012 1:49PM
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I'm going to make a prediction here on a future Cramer article with regards to him bashing AIG...

 

''It may be hard to believe, but in September 2012 AIG was at $32.50 and looking like it was headed to the price it carried in May 2008.''

 

This after he publishes his recommendation to buy them on the day half a billion shares are being flooded into the market during an IPO. What was the last IPO he wanted everybody in on? Oh, that's right, FB. And we all know how that went for the unfortunate people who took his advice. The last time anything AIG was flooded into the market (the options they offered to existing shareholders in Jan. 2011) the stock tanked from $60 a share to $20. If you want to keep your hard earned money I'll offer you some great advice for free. Avoid Jim Cramer's recommendations with a ten-foot pole!

Sep 11, 2012 1:19PM
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Please stop posting this crap, Jim. The government bailed the holder of their pension fund. At no time was AIG ever run legitimately. So it got a new hairdo and had it's nails painted. It's still a pig. As far as America is concerned, every financial that colluded to bring us to this imperiled point of no return... needs to be shut down, reconciled and audited. When the entire corrupt management roster gets thrown in a rat hole forever, then we can all look at these financials through fully regulated heavily supervised eyes again.

Close the banks. End the Federal Reserve. Get rid of Wall Street. Either we start talking up jobs as in job recovery RIGHT NOW or we won't be here by New Year. Wake up, Jim. If you went to Harvard and the best you got out of that education was How to Rip Off America, you won't like what happens next. Not a threat, I read the book. Did you? 
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AIG is aboutready to crash and burn once again

 

another pump and dump by crane

Sep 11, 2012 12:47PM
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this guy is no joke..........he is a major pump and dump scam artist...........

the good news is that at least the people on this page are onto him.......

notice the mention of his sell call on CLF...........he actually picked $33+ as his sell point

which was the exact low on friday..........today it is at $42

 

THIS GUY IS EITHER STUPID OR CROOKED...YOU BE THE JUDGE

Sep 11, 2012 12:25PM
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Jim,

 

You're joking................right?

Sep 11, 2012 11:45AM
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It's great for the old AIG executives getting away with murder at the tax payer's expense. You have to ask yourself, why with all the banking fraud does our government keep the Office Of Thrift Supervision shut down? The only plausible answer I can come up with is that this and the previous administration cut a deal with their chief economic advisors to give them immunity from prosecution. I'm sure the number of skeletons in the criminal banker's closets is huge.

Sep 11, 2012 11:36AM
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I don't know.  It might be a good idea to stay in cash through the Moodys downgrade.

 

Anyway, at least we're getting some of our tax dollars back.

 

I miss the emoticons.

 

 

Sep 11, 2012 11:34AM
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So now that AIG has supposedly fixed itself are we just suppose to magically forget that they got 12 billion dollars, directed it to cover Credit Default Swaps on very specific clients at 100 cents on the dollar (like Goldman Sachs) and then just let everyone else burn?

 

Of course no one went to jail on that one either.

 

I won't touch that company with your tool Cramer.  And any older executive that was around there during the bailout period probably knew what was going on and deserves to be in jail.

Sep 11, 2012 10:33AM
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Nice sell call on CLF this week - that one cost your fans a 30% gain. Keep up the bad work.
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