... the net loss for 2008 [was] a spectacular $99.3bn — just shy of $100bn.

There’s lots going on here, but at a glance we note the effect of fair value accounting on AIG’s financial services unit, which posted a $17.6bn fourth-quarter loss.


The U.S. Treasury will exchange its existing $40 billion cumulative perpetual preferred shares for new preferred shares with revised terms that more closely resemble common equity and thus improve the quality of AIG’s equity and its financial leverage.

Note the last part. This is more playing pretend, officially sanctioned (perpetrated) by the government. Converting the holdings to common equity doesn't meaningfully change the bank's situation -- it just juices the Tangible Common Equity ratio.

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