Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of bailed-out insurer AIG (NYSE: AIG ) jumped more than 14% in intraday trading, as investors reacted to its plan to pay back the Federal Reserve Bank of New York.
So what: After receiving a government bailout that amounted to more than $180 billion, AIG has been hard at work trying to right the wayward ship and raise cash to pay back its government saviors. The deal today would use proceeds from the sale of the company's non-U.S. life insurers -- AIA and Alico -- to close out its $20 billion credit line with the New York Fed. It's expected that this will pave the way for a broader government exit from AIG.
Now what: While this is certainly a step in the right direction, there's still a long way to go before AIG is a fully privately held institution again. The U.S. Treasury is expected to convert its preferred stake in the company to 1.66 billion shares -- or 92% of the total -- during the first quarter of next year. The question then becomes how much of an appetite public market investors will have for cashing out the Treasury. If the experience with GM (NYSE: GM ) and Citigroup (NYSE: C ) is any sign, AIG may end up finding a pretty receptive audience.
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