View Full Version : AIG - Too Big To Play Fair

mick silver
5th November 2008, 19:09
It sounded like an Enron Raptors deal all over again.

In 2000, Gen Re agreed to buy $600 million in reinsurance coverage from AIG creating the appearance of a $100 million risk. But secretly it was no risk at all because AIG agreed to return the fee and pay Gen Re $5 million for the deal to boot.

So did the collateralized debt obligations (CDOs) which AIG liked to insure because you didn't have to own the illiquid paper and taint your balance sheet with risk--and if their credit ratings tanked, swap owners still got face value.

What risk?

But the same leverage, deception and hubris which demolished Enron caught up with AIG.

Like Enron, AIG directors might have been the smartest guys in the room but their risk control model did not even acknowledge the possibility of people defaulting on their mortgages.

People don't do that.

Nor did it expect parties to take out risk free, pox-on-your-head credit swaps on AIG itself. Oops.

But whereas Jeffrey Skilling and Andrew Fastow are sequestered at Club Feds--as are other white collar criminals like Bernie Ebbers and Conrad Black-- AIG's founder Maurice "Hank" Greenberg still had $49.6 million of his $1.25 billion in September according to the New York Times.

Despite being ousted as AIG Chairmen and CEO three years ago--a collar of the Sheriff of Wall Street, Eliot Spitzer, before he /was/ a collar.

And despite the gift of $122 billion of US tax payer money to AIG.

While the other Hank, Treasury Secretary Henry Paulson said the bailouts were necessary because AIG is too big to fail, recent accounting irregularities--called "mark to market" valuations until the handcuffs come out--imply AIG is also too big to play fair.


7th November 2008, 02:10
And what the hell does this have to do with the silver market? That's not the topic. Please...put in the Open Forum. Ridiculous.

7th November 2008, 11:56
AIG is just another cog in the machine. Not surprising really. Good article though, BTW.

mick silver
7th November 2008, 13:50
IT MEAN the more money they steal , the less money you well have FOR SILVER