AIG - What to do?

I am watching AIG Insurance's stock price on Google finance. It is shocking to watch the ebb and flow today as one of the world's largest insurers struggles to stay solvent.

The news is filled with speculation that some form of bridge loan in the form of federal money may be in the works. But, a Bloomberg news report just a few minutes ago quotes Senator McCain and Treasury Secretary Henry Paulson as being opposed to the idea. A New York Times article states private efforts have "faltered" and bankruptcy may be filed by the giant as soon as Wednesday.

On August 6, 2008, AIG released 2008 Second Quarter results. The numbers were not good. But the stock was still trading at $27 and its credit rating remained high. The big insurer was at the top of the list, but with some recognized issues and substantial losses. At that time in the quarterly report, AIG Chairman and Chief Executive Officer Robert B. Willumstad was quoted:

"Our second quarter results were adversely affected by the severe conditions in the housing and credit markets and a very difficult investment environment. These results do not reflect the earnings power and potential of AIG's businesses and it is clear that we have a lot of work to do to restore AIG's profitability to where it should be."..."We understand the challenges ahead of us and we are developing a plan to see AIG through these difficult times and rebuild shareholder value. We will report on our progress in late September."

It does not look like AIG will have until "late September" to "develop a plan."

We have many insurance industry readers of this guidesite and I would be interested in any comments you may have regarding a possible federal bail out or interim loan to AIG.