Liam Plevin and Aaron Luchetti of the Wall Street Journal have been kind enough to analyze just how much we taxpayers are going to pay Wall Street investment banks to help break up the taxpayer-owned black hole known as AIG.
Answer?
$1 Billion.
Sure, $1 billion sounds like chicken feed these days, but it's actually a lot when it comes to investment-banking fees.
The total underwriting fees on the forthcoming Ancestry.com IPO, for example, will total about $10 million. The $1 billion of AIG fees will also be 4X the fees Wall Street was paid to break up AT&T and 2X the fees paid on VISA's IPO.
So who's cashing in?
Among the biggest beneficiaries is Morgan Stanley, which...could collect as much as $250 million from various AIG-related deals..
Goldman Sachs Group Inc., Bank of America Corp. and J.P. Morgan Chase & Co. have all gotten assignments in recent months to help dismantle AIG...
AIG and the New York Fed, which helps oversee the government's ownership stake in AIG, are paying BlackRock Inc. to manage more than $35 billion of the insurer's toxic assets...
AIG is preparing to offer investors shares in a major Asian life insurance unit, American International Assurance Co., early next year. That initial public offering could raise more than $5 billion. Morgan Stanley and Deutsche Bank have been hired as lead underwriters... Each bank could pocket nearly $45 million in fees...
Accounting firm Ernst & Young has a New York Fed contract that could pay $10 million to $60 million...
Law firm Davis Polk & Wardwell LLP, which was brought into AIG at the peak of its crisis last September, is charging up to $950 per hour for partners' time. That reflects a 10% discount, which "is not a common practice," says Marshall Huebner, Davis Polk's lead attorney on the matter...
Goldman was part of a group of banks that helped AIG raise $1.14 billion this year by selling a large stake in a reinsurance company. The group of banks shared an estimated $39.7 million in fees...
Bank of America advised AIG on the recent sales of its car-insurance unit and a Tokyo building. Those deals generated $5.5 million and $1.9 million in fees, respectively, for the bank and others, according Thomson Reuters and Freeman & Co...
Blackstone Group, which has been advising AIG since last fall, has already brought in around $50 million, according to a person familiar with the matter.
And on and on... (Read the whole thing >)
One mortifying problem: The government is making the AIG bankers fly coach instead of First Class. Can you imagine?
Sallie Krawcheck is already under fine at Bank of America.
That was quick. Stocks are already 10%-15% overvalued.
Sorry, Tim and Ben. The money printing press won't save you this time.
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