AIG plans to buy back its bad mortgages

[Playinghardball]

DUBROVNIK, Croatia (Reuters) - Bailed-out insurer American International Group<AIG.N> is working hard to invest cash it set aside for a failed deal to buy back assets from the Federal Reserve, Chief Executive Bob Benmosche said on Tuesday.

But the company is still looking at taking part in the auction the Fed set up for the nearly $16 billion pool of mortgage-backed securities, Benmosche told Reuters in an interview. He was in Croatia to address a U.S.-organized conference on investing in that country.

The Fed bought the securities from AIG during the depths of the financial crisis in 2008 as part of a package to save what was then the world's largest insurer from collapsing into bankruptcy.

AIG had offered to buy the whole of the Fed vehicle Maiden Lane II, which holds the securities, for $15.7 billion. The company had been accumulating cash for months at its insurance units in anticipation of the deal.

Read more at: http://www.rawstory.com/rs/2011/04/05/aig-plans-to-buy-back-its-bad-mortgages/

[trumad]

1. Yep---the Fed was blackmailed by Goldman Sachs into doing it.