GS751 (28.93)

American Equity - An Oxymoron

September 29, 2008 – Comments (1) | RELATED TICKERS: AEL

American Equity Ticker - (AEL) - Ran across this one while working my way through the list of short banned stock lists... I had to do a little catching up on my Annuity Knowledge... I figure that if management is out to blame the short sellers for their stock price, then there some sketchy to start with.  I found some Sketch Ball's here.... I call this one an oxy moron because from the looks of it there is not much equity in this baby.

Check out the Recent 8-K (link here)

They made some great investments in WM, AIG, LEH, FNM, and FRE Mac..  It hasn't written down its investment in AIG yet, which I think will have to happen...  They have all these nice counterparty exposure to derivative transactions with Lehman.....  They are "evaluating the recoverability of these....."

Remember guy's: it is ok for them to Use Non-GAAP measures to state their income because everybody else in the life insurance business does it.......  Not that GAAP provides any clarity....... GAAP still leaves plenty of room to dick around with earnings...

Here is their most recent 10-Q.. a sizable chuck of those annuity investment's (read how an annuity works here) on the balance sheet were made in Real Estate and Mortgage loans... They are Floridabuilders favorite because they are about to bingo, run out of cash..... Most of their other assett's are BS things like deferred costs....  I would love to sit here and rip on them but gotta get to the next one on the list...  I'm gonna pull the insolvency card on this baby because from the looks of it.  I will say 2 words.. Red Thumb...