BlackRock's Downgrade Reaction

The timing of the downgrade of U.S. credit did take us by surprise,said Peter Fisher,head of fixed income trading at BlackRock,but we did a great deal of planning to protect our clients.It's a wake-up call about the level of risk in the world.A number of investors will take it as one more risk.They're selling risk assets,not Treasuries.
We're not mechanistic sellers or buyers.We are managing risk and looking for opportunities that this downgrade may create.The risk that the U.S. will not pay is pretty marginally increased.Clearly,coming in the fragile markets,it's one more straw breaking the camel's back of investors.
U.S. Treasuries were 60% of all AAA assets.It's a liquidity pool with great transparency.There's a little too much overreaction.Do not change behaviour abruptly.We've been up in quality and liquidity to try and brace ourselves,Mr.Fisher indicated.
BlackRock is the largest money manager in the world,with 3.66 trillion dollars of assets under management.It provides investment,advisory and risk management solutions from offices in 26 countries.
BlackRock(BLK)

Fiscal Reform:Geithner's Global Optimism

In the view of U.S. Treasury Secretary Timothy Geithner,the journey to fiscal responsibility is well underway worldwide.In the U.S.,Mr.Geithner said,the important thing for the economy now is to lock in reforms to bring down the long term deficit.It's not surprising that average people are sceptical of Washington.I'm confident we will start the process.I think it's achievable.There's an emerging consensus on how much we have to do-four trillion in cuts-and the time frame.
The more details you have,the more credible it's gonna be.Faced with enormous challenge,Washington has always come together.You have to do it in a balanced,comprehensive way.There's no way to do this without changing our tax code.Life's about alternatives.We need a balanced,comprehensive package that will add modestly to the burden of the most fortunate Americans.
We have to earn the confidence of investors,but I didn't have to reassure foreign investors when Standard&Poor's downgraded their U.S. credit outlook to negative.We don't know how much is gonna be possible,but we have good prospects of laying down a foundation.
For its part,Europe is doing incredibly difficult reforms.The leaders of Europe have said they will do whatever is necessary to address the sovereign debt issue,and they're making some progress,in Timothy Geithner's estimation.
Before assuming his cabinet post,Mr.Geithner was president of the Federal Reserve Bank of New York,where he played an integral role in dealing with the financial crisis,assisting his predecessor at Treasury,Hank Paulson.Although initially disliked by some in Congress for mistakes he made on his income taxes some years ago,he has developed a decent working relationship with lawmakers over time.

AIG:Rescuing a Business

We've resolved the debt to the Federal Reserve.The real challenge is making sure we have good performance,said Robert Benmosche(pronounced "Benmoshay"),CEO of American International Group.Treasury's goal is to get as much as it can from the next initial public offering of AIG stock.My focus now is tomorrow.You can't make yesterday better.
How do you make the most money from selling the smallest amount of profits?Among AIG's businesses are SunAmerica Financial Group,U.S. Life,aircraft leasing and Mortgage Guaranty.We're gonna continue to look overseas.
AIG has the most entrepreneurial culture.That capability is not easy for people to underprice.Our turnover is below normal levels;our retention of clients is above normal levels.We have a core of people in leadership positions-they're excited.
We have a succession plan in place.I would love to see this all the way through,to see the last share be sold.The government will probably sell over a year and a half.
Europe is gonna be a tough haul.My sense is,they're gonna work through these problems.I don't see this as a disaster.It's just gonna slow things down a little bit,observed Robert Benmosche,the veteran business leader with a shock of gray hair to prove it.
AIG has repaid four billion dollars to the Federal Reserve Bank of New York,a milestone on its way back to independence from the government following the bailout that rescued it from the financial crisis.Plans for the sale of Treasury's stake in the company are well underway,which will mark AIG's return to normal corporate life.
AIG is a leading property-casualty insurer and financial services provider in more than 130 countries and jurisdictions.Its stock is listed on exchanges in the U.S.,Ireland and Japan.AIG employees are still aggressive achievers and pleased to be part of the recovery plan.
American International Group(AIG)