Mirror, Mirror On The Wall, When Is The Next AIG To Fall?

This is presented by Marc Faber at “Austrian Economics and the Financial Markets,” the Mises Circle in Manhattan on 22 May, 2010 in New York, New York. Includes an introduction by Mises Institute president Douglas E. French.

Marc Faber is a Swiss investor. Faber was born in Zürich and schooled in Geneva, Switzerland, where he raced for the Swiss National Ski Team. He studied Economics at the University of Zurich and, at the age of 24, obtained a Ph.D. degree in Economics magna cum laude. Faber is best known for the Gloom Boom & Doom Report newsletter and its related web site featuring “Dance of Death” paintings created by Kaspar Meglinger.

During the 1970s Faber worked for White Weld & Company Limited in New York City, Zürich, and Hong Kong. He moved to Hong Kong in 1973. He was a managing director at Drexel Burnham Lambert Ltd Hong Kong from the beginning of 1978 until the firm’s collapse in 1990. In 1990, he set up his own business, Marc Faber Limited. Faber now resides in Chiangmai, Thailand, though he keeps a small office in Hong Kong.

Faber has a reputation for being a contrarian investor and has been called “Doctor Doom” for a number of years. He was the subject of a book written by Nury Vittachi in 1998 entitled Doctor Doom – Riding the Millennial Storm – Marc Faber’s Path to Profit in the Financial Crisis. Faber has become a frequent speaker in various forums and makes numerous appearances on television

American International Group, Inc. or AIG is an American multinational insurance corporation. According to the 2011 Forbes Global 2000 list, AIG was the 29th-largest public company in the world. It was listed on the Dow Jones Industrial Average from April 8, 2004 to September 22, 2008.

AIG suffered from a liquidity crisis when its credit ratings were downgraded below “AA” levels in September 2008. The United States Federal Reserve Bank on September 16, 2008 created an $85 billion credit facility to enable the company to meet increased collateral obligations consequent to the credit rating downgrade, in exchange for the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. The Federal Reserve Bank and the United States Treasury by May 2009 had increased the potential financial support to AIG, with the support of an investment of as much as $70 billion, a $60 billion credit line and $52.5 billion to buy mortgage-based assets owned or guaranteed by AIG, increasing the total amount available to as much as $182.5 billion

Dr. Faber‘s PowerPoint file is available for download