ONE of Bermuda's largest employers, the American International Group (AIG), features high on a Wall Street list of 'Companies that won't make it through 2009', echoing the warnings of local economist Robert Stewart (pictured) in the aftermath of AIG's US Government bailout.

Finance web site 24/7 Wall St predicts that ailing reinsurer AIG, which employs around 200 people in Bermuda, will be one of ten well-known large companies to disappear in the next 12 months.

Its list, which was syndicated on other high-profile sites such as Business Week and Market Watch, puts AIG at number three, under troubled car firm Chrysler and debt-ridden radio outfit Sirius XM.

24/7 Wall St editor Douglas McIntyre describes AIG as "the biggest mess of all the financial firms that the federal government has bailed out". He predicts that Congress under new President Barack Obama will start auctioning off divisions of AIG in 2009 as the US Government grows "frustrated" with "writing AIG cheques".

"Congress seems less and less enamored of having a lot of money sitting in troubled companies," he writes. "Watch for the new administration to get frustrated quickly and appoint its own people to auction off AIG divisions. Better to get something back than keep writing AIG cheques."

AIG has been one of the highest-profile victims of 2008's credit crunch. After posting total losses of $18.5 billion over the first three quarters of the year, AIG was bailed out with what the company calls a "revolving credit agreement" by the US Federal Reserve.

Soon after the bailout, Mr. Stewart, author of industry handbook A Guide to the Economy of Bermuda and former CEO of the Royal / Dutch Shell Group, told the Mid-Ocean News that AIG's Bermuda employees would "be better served seeking a job as a waiter in a restaurant".

In September, he warned that "the AIG nationalisation will have an impact sooner or later", adding that the company was "taking huge risks with other people's money."

Bermuda College lecturer and local economist Craig Simmons shared Mr. Stewart's concerns, telling the Mid-Ocean News: "If AIG implodes, the impact of that implosion on other firms within the local financial services sector would be profound."

As well as AIG, Chrysler and Sirius XM, 24/7 Wall St predicts that mortgage groups Fannie Mae and Freddie Mac, chemist chain Rite Aid, and news conglomerate The New York Times will all cease to exist as we know them in 2009.

Rounding out the top ten list of firms that could be on the way out are telecoms outfit Nortel, furniture retailer Pier 1, cable giant Charter Communications and homebuilders Hovnanian, who have suffered due to the sub-prime mortgage crisis.

On Christmas Eve, a fund set up by AIG and the Federal Reserve invested in $16 billion of bonds guaranteed by the troubled reinsurer in an effort to reduce some of its risk. The fund, called Maiden Lane III, has bought more than $62 billion of AIG's collateralised debt obligations, or CDOs, to date.

The multinational insurance company continues to dominate business headlines worldwide, with a Washington Post exposé this week lamenting that the US Government's bailout of AIG "stands at $152 billion and counting – almost ten times as large as the rescue for the American auto industry".