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Thread: What happened to AIG?

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    Default What happened to AIG?

    I'm just trying to work out why it's dying... some people are talking about credit derivatives but I'm not sure what that actually means

    Can anyone explain why AIG is in such trouble, and what is the likely scenario that will play out?

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    Default Re: What happened to AIG?

    AIG is the world's largest insurance company ... with some unusual interpretations of what constitutes 'insurance'. AIG purchased or wrote all sorts of 'swap' agreements ... some constituted 'insurance' against one currency falling versus another, some constituted 'insurance' against mortgaged backed securities defaulting, some constituted 'insurance' against big financial houses defaulting on their commercial paper etc.

    Like all 'insurance' companies, the actual amount of hard asset reserves that the insurer has at its disposal only constitute a tiny percentage of the total amount of exposure the 'insurance' company has ... with the 'insurance' company and its investors 'betting' that the premiums earned from the sale of 'insurance' will exceed the necessary payouts if and when insurance coverage is triggered. If the amount of necessary payouts exceeds the amount of incoming premiums, the 'insurance' company eats a loss. And when a big financial house (like Lehman Brothers) leaves the 'insurance' company on the hook for billions of dollars worth of 'claims' from the owners of nearly worthless ( like Lehman Brothers) commercial paper, that 'insurance' company can find itself headed for bankruptcy in a huge hurry. To draw a crude analogy, conventional insurance companies lost their ass as a result of property loss claims due to hurricane Katrina ... but fortunately Katrina wasn't immediately followed by a new disastrous hurricane hitting every month. Following that analogy, AIG has been repeatedly hit by financial 'hurricanes' with a frequency that was thought to be totally impossible when AIG originally 'sold insurance policies' on the failure of the underlying financial instruments.

    Of course, if an 'insurance' company actually does go bankrupt, this also means that the 'insurance policies' already purchased by other financial institutions on everything from mortgaged backed bonds to gov't bonds to currency exchange rates to who the hell knows what are left swinging in the proverbial breeze. And if that financial institution happens to be for example a huge swiss bank who is holding AIG insured US mortgage paper on which the swiss bank has taken huge 'paper' losses, if AIG does not pay off on the swiss bank's 'insurance' claim that turns into real losses. In the case of a huge swiss bank, those losses would be several times larger than the entire gov't budget of Switzerland ... meaning that if AIG went bankrupt the swiss bank would go banrkupt, the swiss gov't would go bankrupt, and most of the other financial institutions and individual investors who have accounts / arrangements with that huge swiss bank would also face potential bankruptcy. So from that standpoint, should AIG go bankrupt and it's 'insurance policies' become worthless, an unthinkable domino effect of international bank failures could quickly follow due to 'paper' losses instantly changing into 'real' losses !

    Compounding this problem is the likely fact that the sellers of somewhat risky financial instruments ( like California state bonds to name just one example ) are going to have to pony up much higher interest rate payments in order to actually sell those instruments to investors if the investors have to bear 100% of the default risk - as opposed to AIG 'insuring' the investors against loss of principal if a default by the state of California should actually occur. From that standpoint, state and local governments stand to 'lose' billions of dollars in the form of higher interest payments on money they need to borrow if there weren't any AIG insurance coverage available for new muni bonds. This scenario is similar to asking individual depositors to place their money in shaky bank accounts ... but with no FDIC to insure that the depositors would get their original money back if the bank goes into default / bankruptcy.

    As to how this scenario is likely to play out, all I can say is that it appears on the surface that the US gov't is committed to bailing out not only US financial institutions, but also foreign financial institutions that are at risk due to bad US subprime mortgage paper and/or counterparty arrangements with bankrupt / distressed US financial institutions. Thus from a conspiracy theory standpoint, AIG has been used as a 'front' which allows the US gov't to channel bailout money to certain US and foreign financial institutions without the need to force the bailout recipients to receive publicity and/or a grilling in front of a US congressional committee. The 'cost' of these second-hand bailouts really isn't known but it probably runs toward a trillion dollars or more (maybe much more). Various FOIA lawsuits have been filed to force the FED / treasury to release information as to which financial institutions have received how much bailout money via such 'non-transparent' arrangements, and a bit of info is finally being made public ... most recently involving AIG's bailout payments from the US FED and the resulting 'insurance policy' payouts AIG made to foreign financial institutions using that bailout money.

    As to where all these bailout billions are coming from, the only technically accurate answer is 'out of thin air'. Eventually this is going to tank the US dollar thus triggering nasty US dollar denominated price inflation, as well as force massive future US business and individual income tax increases.

    ~
    Last edited by Melonie; 03-20-2009 at 02:35 AM.

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    Default Re: What happened to AIG?

    There is also this relatively unpublicized tidbit ... which IMHO amounts to the 'guards' suing the new 'warden' for the right to abuse prisoners !




    (snip)"While the American International Group comes under fire from Congress over executive bonuses, it is quietly fighting the federal government for the return of $306 million in tax payments, some related to deals that were conducted through offshore tax havens.

    A.I.G. sued the government last month in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company’s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens.

    A.I.G. is effectively suing its majority owner, the government, which has an 80 percent stake and has poured nearly $200 billion into the insurer in a bid to avert its collapse and avoid troubling the global financial markets. The company is in effect asking for even more money, in the form of tax refunds. The suit also suggests that A.I.G. is spending taxpayer money to pursue its case, something it is legally entitled to do. Its initial claim was denied by the Internal Revenue Service last year.

    The lawsuit, filed on Feb. 27 in Federal District Court in Manhattan, details, among other things, certain tax-related dealings of the financial products unit, the once high-flying division that has been singled out for its role in A.I.G.’s financial crisis last fall. Other deals involved A.I.G. offshore entities whose function centers on executive compensation and include C. V. Starr & Company, a closely held concern controlled by Maurice R. Greenberg, A.I.G.’s former chairman, and the Starr International Company, a privately held enterprise incorporated in Panama, and commonly known as SICO.(snip).


    The conspiracy theorists would tell you that America in particular, and the 'west' in general, are trapped between a rock and a hard place. These days the GDP has less and less of an addition from truly productive industries like manufacturing or raw material production (oil, coal, steel), and more and more of an addition from truly non-productive service industries like banking / insurance / investments. And while the gov't was not dependent on the truly productive industries beyond their being a source of tax revenue, the gov't is indeed dependent on the financial services industries which arguably serve as active 'partners' in implementing gov'ts debt based financial policy . Because of this difference, the failure of an oil refiner or a steel mill has far less importance than the failure of a bank or insurance company, because the latter disrupts a heavily interconnected system of debts and gov't / consumer spending which now constitute the majority of America's current economy. The latter also explains why AIG and certain other troubled financial institutions have been allowed to deal directly with the FED for bailout money instead of being dragged before the US congress (as was required of manufacturers i.e. GM & Chrysler).


    If you're willing to invest 10 minutes of listening, check out to get some idea of where the top dogs in the financial services industry are coming from ...

    ~
    Last edited by Melonie; 03-20-2009 at 06:47 AM.

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    Default Re: What happened to AIG?

    additional example of various entanglements between the US gov't and the financial services industry ... which probably makes my point much more bluntly.



    (snip)NY pension advisers charged in kickback scheme
    Thu Mar 19, 2009 5:20pm EDT

    * Two advisers to former NY state comptroller charged

    * Kickbacks "tainted" more than 20 deals by pension fund

    * Five deals involved Carlyle Group -Cuomo

    * Former fund-raiser, partners got $30 mln in fees -Cuomo

    By Joan Gralla

    NEW YORK, March 19 (Reuters) - The former New York state comptroller's top fund-raiser and pension investment chief on Thursday were arrested and charged with taking millions of dollars in kickbacks from money manager firms.

    More than 20 investment deals made by the state's $122 billion pension fund were "tainted" by the kickbacks, and five of the investments involved The Carlyle Group, one of the world's largest private equity funds, New York Attorney General Andrew Cuomo said.

    Henry Morris, who was the fund-raiser for former comptroller Alan Hevesi, and David Loglisci, who was the state pension fund's top investment officer, were charged with securities fraud, bribery, money laundering and other crimes in a 123-count indictment.

    The two men were also charged in a civil complaint by the U.S. Securities and Exchange Commission.

    "Morris used the fund as his own piggy bank and took approximately $30 million in fees for himself and his business partners on investments which Morris himself had a role in approving," Cuomo said.

    Morris and an unidentified partner received more than $13 million in "sham placement fees" from five investments totaling $730 million that involved The Carlyle Group [CYL.UL], Cuomo said.(snip)


    ... if only there were an Andrew Cuomo (New York's state attorney general)-esque attitude at the US federal level !!!


    And of course AIG is also being sued by other financial industry players for failure to make insurance payouts on 'fraudulent' home mortgages that AIG insured ...



    (snip)"This promises to get amusing; two headlines:

    "Countrywide sues AIG unit over its failure to cover loan losses"

    and

    "AIG Sues Countrywide for Misrepresenting Mortgages"

    You can't make stuff like this up; here's a few choice quotes from both stories (you match 'em!)

    Eggert added, "Here Countrywide displays a huge amount of chutzpah because it's suing because its loans went bad, and it claims United Guaranty should have done better underwriting, when it's the failing of underwriting by loan originators that got us into this stuff."

    United Guaranty said in the complaint that it had reviewed loan files that showed that most mortgages covered by 11 policies for asset-backed securities were either underwritten in violation of Countrywide’s own guidelines or contained defects, such as missing documents, misrepresented credit scores or false social security numbers.


    You just have to chuckle at the "ready fire AIM!" chutzpa here.

    Never mind the obvious appearance of bribery found in this nugget:

    Countrywide was also a focus of attention Thursday in Washington, where Rep. Darrell Issa (R-Vista) released a 63-page report detailing the company's practice of giving discounted mortgages to influential people, particularly key lawmakers, staffers and other government officials.

    No really? I wrote about this when it first came to light. You don't think that Countrywide was perhaps "buying" a little willful blindness, do you?"(snip)
    Last edited by Melonie; 03-20-2009 at 08:03 AM.

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    Default Re: What happened to AIG?

    and yet another potential example of AIG's entanglements with gov't ...



    (snip)"As it turns out, Obama was the second biggest recipient of AIG campaign contributions, trailing only Chris Dodd, the man who wrote the amendment for the pork bill that allowed AIG to hand out those dubious bonuses. So what did these crooks get for the money? Well, they got the amendment from Dodd, and another $23 billion from Obama. Not bad for a couple-hundred-thousand dollars of our money.

    That’s right, clearly AIG didn’t have any money, so how were they going to cover the contributions? Obama solved that little dilemma for them. How does it feel to find out you contributed to Obama’s campaign? If you’re a taxpayer, and you were currently a taxpayer when the bailout occurred, you essentially donated."(snip)

    Because this is Dollar Den I don't want to dwell on political aspects ... and will also point out that the ABC news story notes similar (but significantly smaller) AIG contributions having been made to republican politicians. The larger economic point from the conspiracy theorists is that the financial industry and the US gov't ... be it the politicians ... gov't employees (i.e. their pension money) ... and especially the GSE's (i.e. Fannie Mae / Freddie Mac / Sallie Mae where the gov't essentially operates financial services businesses of its own) ... are WAY too closely interconnected in WAY too many areas.


    Perhaps the most level-headed perspective regarding AIG comes from Bloomberg ...



    (snip)"March 20 (Bloomberg) -- Last September the U.S. government began to dole out the first of $173 billion to American International Group. A big chunk of it passed right through to banks that had bought insurance from AIG against mortgage and corporate defaults -- foreign banks such as Deutsche Bank and Societe Generale but also some domestic ones, such as Goldman Sachs and Bank of America.

    U.S. government officials then went to great lengths to disguise from the public exactly what they had done, and why, going so far as to declare the ultimate list of recipients of taxpayer funds off limits to the taxpayer. To its immense credit, the media -- or, rather, a handful of diligent reporters, the New York Times’ Gretchen Morgenson chief among them -- prevented the public officials from getting their way.

    This incredible act triggered hardly any political backlash. In effect, the U.S. taxpayer had paid off AIG’s gambling debts. The end recipient of the money was not AIG, but Goldman Sachs, Deutsche Bank and the others.

    Some large portion of the billions obviously wound up, in one form or another, in the pockets of their employees and shareholders. A few people on Capitol Hill moan and groan but there is popular agreement on the wisdom of this transfer of ONE HUNDRED AND SEVENTY THREE BILLION dollars from the taxpayer to the financiers."(snip)


    Yet US mainstream media still fails to point out the $173 billion in stealth bailout money that was channeled through AIG by the US gov't, and instead dwells on the issue of employee bonuses which only involves $160 million i.e. less than 1/10th of 1% of the total amount of US taxpayer money handed to AIG !!! In other words, mainstream media is reporting about one sinking lifeboat while failing to mention the sinking Titanic that the lifeboat came from - not to mention that mainstream media also fails to report on who is responsible for steering the Titanic into an iceberg in the first place !!!

    ~
    Last edited by Melonie; 03-20-2009 at 07:42 AM.

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    Default Re: What happened to AIG?

    I don't think it is a question of "how long to leverage the economy" as it is "how long to de-corrupt the economy." The US is rife with corruption in so many ways at so many layers that at times I wonder how we are going to get past it.

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    Default Re: What happened to AIG?

    Quote Originally Posted by salsa4ever View Post
    I'm just trying to work out why it's dying... some people are talking about credit derivatives but I'm not sure what that actually means

    Can anyone explain why AIG is in such trouble, and what is the likely scenario that will play out?
    I'll try to be a whole lot simpler than Melanie's long and good answer.

    AIG used their excellent credit rating to borrow money. Normally when companies with excellent credit ratings borrow money, it is thought they are going to extend the business that got them that excellent credit rating in the first place. However, that is not what AIG did. They borrowed money to finance their credit default swaps line of business, a very risky business indeed. (Much riskier than their traditional life insurance business.)

    That move into insuring credit default default swaps would not have been so bad, if they had followed normal accounting rules. Under FASB rules credit default swaps should have losses reserved against income at the time the swap is entered into. AIG did not do that. Instead, they booked the income at the time of the deal and when they actually had to pay off on a contract, they then and only then booked the loss. That wasn't so bad because in most years, they had far more income than claims as very few people actually defaulted on their mortgages that were the underlying securities in these credit default swaps. AIG's accounting allowed people in the department at AIG (Financial Products Group, or FPG) to get huge bonuses for years as income was generally overstated and losses were realized in later years. It is my understanding that FPG even paid bonuses based on sales alone, not claims paid.

    Still, not a huge problem until 2008. By that time, new home mortgages were slowing greatly. Worse, defaults were soaring. As the defaults came in, AIG had to pay the contracting parties. But, without a source of income, remember home sales and mortgages were down, the losses started to overwhelm not just FPG but also AIG as a whole. As late as July 2008 AIG was reporting solid income. But in the third quarter, the number of mortgage defaults got so large that all of AIG's profits were wiped out. Things only got worse. Now, there are practically no mortgages being written that even remotely qualify for credit default swaps. (That is a good thing for the economy and for home buyers and owners.) But, under the AIG accounting, there is no income from which to pay the defaults. (A bad thing for AIG and its majority shareholder, the people of the United States.)

    Can we solve the AIG mess? Yes. First, AIG's books have to be restated. To the extent allowable by FASB and by law we will have to go back and reserve losses out of past years income. That will cause AIG to have considerably less profit in those years and considerably less book value. They may be owed some income tax refunds. (They'll need the cash to pay their existing and future claims.) This will more accurately reflect AIG's true financial condition.

    Second, we, meaning the United States government, will have to sue a bunch of AIG employees to recover their unjustly obtained bonuses. (Not a problem, we've done that before in the S&L crisis.) We will have to reclaim some dividends. AIG may have to be liquidated or substantially reorganized becuase they really are not worth what they say they are.

    Third, FPG and a lot of other AIG businesses will have to be put into receivership. Probably something like the Resolution Trust Corporation did with the S&Ls a couple of decades ago. The life insurance business probably will have to be spun off to allow it to continue to function paying claims as it always has. (Otherwise, the healthy life insurance business will be overwhelmed by the unreasonably risky credit default claims.)

    Finally, the contracting parties to the credit default swaps will have to take a severe haircut. Perhaps their insurance will be only 50% of the default rather than 100% now. Don't a cry a tear for these folks, they knew or should have known how risky the business was they were getting into. Now the risks have come to pass.

    That's my take on the AIG mess.
    HTH
    Z

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    Default Re: What happened to AIG?

    I happened to stumble across this 'flowchart' showing where the FED's bailout money to AIG actually wound up getting 'spent' ...




    And if you are not aware, Maiden Lane is a new financial company which was specifically created by the US FED in 'partnership' with AIG to allow the (illegal) de-facto FED purchase of distressed assets ( by law the FED can only lend it cannot buy ). Because of the formation of Maiden Lane, we still don't know who actually received that slice of AIG bailout money.

    (snip)"Using the loophole it had learned during Bear Stearns, the Fed set up two new companies: Maiden Lane II and Maiden Lane III. Two dealt with the secured lending and Three the shitty credit default swaps. The Fed lent each Maiden Lane $20 billion and $25 billion and then Maiden Lane paid off the investors that had either lent AIG the money to buy the shitty mortgage backed securities (ML II) and those who had the shitty mortgages and the corresponding insurance (ML III). To avoid booking a loss on the Fed's balance sheet, because the Fed had some legal problems if either of these Maiden Lanes lost money, and because of a reporting requirement that Dodd had put into TARP which actually required the Fed to report to the Congress and the public about the cost to taxpayers from ML I, the Fed did some creative accounting. They still paid all of the investors off at full value (par), so that they didn't lose anything. But they booked the loss on AIG's balance sheet and kept Maiden Lane clean. This is the hidden story behind how AIG went from losing $38 billion during the first 9 months of 2008 to losing $61 billion in the 4th quarter.

    This was all exposed at today's hearing. And despite repeated requests from Senators on both sides - Dodd, Shelby, Corker, Warner - the Fed is still refusing to say who it bailed out through Maiden Lane II and III."(snip)




    Using the ever reliable 'follow the money' theory, who actually benefitted the most from the AIG bailout ?

    - foreign banks, and the 'uber rich' Americans who had anonymous investment / hedge fund accounts ithrough those foreign banks, that have had investment losses covered dollar for dollar by the US taxpayer

    - Goldman Sachs ( Paulsen's former employer ) and Merrill Lynch ( Bernanke's buddies ... now part of B of A) who avoided all of the bad press / congressional strings that have befallen other US financial instutions who directly took bailout money, but still had investment losses covered by the US taxpayer via 'back door' bailouts through AIG.


    The US is rife with corruption in so many ways at so many layers that at times I wonder how we are going to get past it.
    The deeper the digging into AIG, the stronger the smell of 'rotting corpses' becomes. Of course, nobody knows what to expect since many of the politicians who are supposedly doing the digging have arguably been 'accomplices in the crimes' they are supposedly investigating ( political contributions, sweetheart deals re personal finances ) ! Arguably, FED officials supposedly charged with regulating these financial institutions also have ( implied ) fingers in the pie as well. However, as long as US mainstream media continues to focus on the relatively trifling matter of AIG executive bonus payments, attention can continue to be deflected from the REAL issues behind the AIG bailout !


    ~
    Last edited by Melonie; 03-21-2009 at 07:05 AM.

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    Default Re: What happened to AIG?

    Awesome find Mel!

    XOXO
    Z

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    Default Re: What happened to AIG?

    so basically the endgame of all this will be hyperinflation (i.e. massive indirect taxation on anyone stupid enough to hold US dollars?)

    So one proximate cause of the AIG bust is that they sold a lot of credit default "insurance", and now they're being hit with heaps of credit default that's all linked in a daisy chain and they're fucked...

    Are credit default swaps the same thing as collateralized debt obligations (CDOs)? A subset? I feel like all this jargon is trying to obfuscate and hide the issue... which I'm sure is happening.

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    Default Re: What happened to AIG?

    credit default swaps are one specific type of collateralized debt obligation ... with the uniquely dangerous aspect being that the party buying 'insurance' on a particular security is not required to actually OWN that security. Thus hedge funds were able to load up on 'insurance' coverage to cover, say, a default on Corporation X bonds, while at the same time they were shorting the hell out of Corporation X stock to the point of forcing Corporation X into bankrutpcy ( example Lehman Brothers ) ... meaning that the hedge fund profits during the stock decline, and the hedge fund profits again via the 'insurance' payout when the company goes bankrupt from the naked shorting and defaults on their bonds - without the need for the hedge fund to actually invest money buying Corporation X bonds in the first place.

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    Default Re: What happened to AIG?

    In a nutshell? The financial services industries were deregulated over the last 10 years or so, and Wall street ran away with a lot of people's money. No one was checking out any of these guys, and they were allowed to create their own "Credit Score" in order to continue to borrow money that they couldn't afford to borrow.

    It is a little bit like what happened in the sub-prime mortgage crisis, but on a much bigger scale. A low income homeowner buys a house on credit without proof of income and without any down payment. Then when the house proves to be too expensive for him, the house is foreclosed upon.

    Technically, the US government should have "Foreclosed" on AIG. But everyone is so terrified of having a financial institution NATIONALIZED, instead we gave them billions and billions of tax payer dollars that should be going to things like veterans care, public education and public safety.

    We hand the companies all that money, and still no oversight was insisted upon. That is why the execs are running off with these huge bonuses now. We didn't tell them that they couldn't do that (ie; they weren't regulated).

    I'm sure all the recipients of the bailout bonuses are high fiving Henry Paulson for helping them loot the national treasury.


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    Default Re: What happened to AIG?

    Quote Originally Posted by Paris View Post
    I'm sure all the recipients of the bailout bonuses are high fiving Henry Paulson for helping them loot the national treasury.
    Sounds like they were high fiving more than a few democrats too (Chris Dodd).

    Perhaps why they were not allowed (enough time) to read the bill they were to vote for (to save the country.)

    Corruption runs rampant in so many vital organs of our country right now.

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    Default Re: What happened to AIG?

    Quote Originally Posted by Paris View Post
    Technically, the US government should have "Foreclosed" on AIG. But everyone is so terrified of having a financial institution NATIONALIZED, instead we gave them billions and billions of tax payer dollars that should be going to things like veterans care, public education and public safety.
    Actually, AIG did not owe the US much money prior to our "investment" or the better term bail out, so forclosure by the US was not an option. What was an option was letting them go bankrupt. A better option, I think, was to organize a pre-packaged bankruptcy where the trading partners took a haircut and AIG got sliced up into many pieces.

    We hand the companies all that money, and still no oversight was insisted upon. That is why the execs are running off with these huge bonuses now. We didn't tell them that they couldn't do that (ie; they weren't regulated).

    I'm sure all the recipients of the bailout bonuses are high fiving Henry Paulson for helping them loot the national treasury.
    One of the things that really bothers me is auto workers were told they had to take a pay cut yet Wall Street not only gets to keep their pay AND bonuses for running their companies into the ground. Now that is just not right.

    Z

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    Default Re: What happened to AIG?

    Quote Originally Posted by salsa4ever View Post
    so basically the endgame of all this will be hyperinflation (i.e. massive indirect taxation on anyone stupid enough to hold US dollars?)
    Or massive deflation. Right now, both are on the table and I am unsure which way things will turn out. In many parts of the world, there is a lot of deflation taking place. Bernanke is betting that he can stabilize the banking system and then control inflation. One thing is sure, we have much better means of controlling inflation than we do deflation. (Basically we have no means of controlling deflation.) In the USA, oil prices are down dramatically from last summer. Milk prices are down. I paid $2.49 for a gallon of milk Saturday. There is no way anyone made money on that deal, except me. In fact, wholesale milk prices have fallen so far that lots of dairy farmers are going out of business. http://www.newsobserver.com/104/story/1451980.html

    Z

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    Default Re: What happened to AIG?

    ^^^ however, you really must differentiate between deflation of 'domestic' goods and services prices (i.e. local milk prices, local real estate prices) which are experiencing deflation, and the US dollar converted prices or worldwide commodities (i.e. oil, wheat, gold) which are actually rising again. The former are decreasing due to lack of local demand and/or lack of ability of local customers to afford to consume, whereas the latter are increasing due to a devaluation in the exchange rate 'value' of the US dollar.

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    Default Re: What happened to AIG?

    and speaking of Senate finance committee chairman Chris Dodd ...



    (snip)No wonder Senator Christopher Dodd (D-Conn) went wobbly last week when asked about his February amendment ratifying hundreds of millions of dollars in bonuses to executives at insurance giant AIG. Dodd has been one of the company's favorite recipients of campaign contributions. But it turns out that Senator Dodd's wife has also benefited from past connections to AIG as well.

    From 2001-2004, Jackie Clegg Dodd served as an "outside" director of IPC Holdings, Ltd., a Bermuda-based company controlled by AIG. IPC, which provides property casualty catastrophe insurance coverage, was formed in 1993 and currently has a market cap of $1.4 billion and trades on the NASDAQ under the ticker symbol IPCR. In 2001, in addition to a public offering of 15 million shares of stock that raised $380 million, IPC raised more than $109 million through a simultaneous private placement sale of 5.6 million shares of stock to AIG - giving AIG a 20% stake in IPC. (AIG sold its 13.397 million shares in IPC in August, 2006.)

    Clegg was compensated for her duties to the company, which was managed by a subsidiary of AIG. In 2003, according to a proxy statement, Clegg received $12,000 per year and an additional $1,000 for each Directors' and committee meeting she attended. Clegg served on the Audit and Investment committees during her final year on the board. (snip)

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    Default Re: What happened to AIG?

    Quote Originally Posted by Melonie View Post
    and speaking of Senate finance committee chairman Chris Dodd ...

    http://www.realclearpolitics.com/art...irector_o.html

    (snip)No wonder Senator Christopher Dodd (D-Conn) went wobbly last week when asked about his February amendment ratifying hundreds of millions of dollars in bonuses to executives at insurance giant AIG. Dodd has been one of the company's favorite recipients of campaign contributions. But it turns out that Senator Dodd's wife has also benefited from past connections to AIG as well.

    From 2001-2004, Jackie Clegg Dodd served as an "outside" director of IPC Holdings, Ltd., a Bermuda-based company controlled by AIG. IPC, which provides property casualty catastrophe insurance coverage, was formed in 1993 and currently has a market cap of $1.4 billion and trades on the NASDAQ under the ticker symbol IPCR. In 2001, in addition to a public offering of 15 million shares of stock that raised $380 million, IPC raised more than $109 million through a simultaneous private placement sale of 5.6 million shares of stock to AIG - giving AIG a 20% stake in IPC. (AIG sold its 13.397 million shares in IPC in August, 2006.)

    Clegg was compensated for her duties to the company, which was managed by a subsidiary of AIG. In 2003, according to a proxy statement, Clegg received $12,000 per year and an additional $1,000 for each Directors' and committee meeting she attended. Clegg served on the Audit and Investment committees during her final year on the board. (snip)

    Chris Dodd is too stupid to ever be embarrassed by his own behavior. Just wait until next year's re-election campaign when he will be forced to come clean oin the "sweetheart" mortgage he got through Countrywide.

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    Default Re: What happened to AIG?

    Very interesting piece in today's NYT on the Op-Ed page. They re-printed the Letter of Resignation from Jake DeSantis to Liddy of AIG. DeSantis was one of the "bonus" recipients. In his case it was apparently deferred compensation. For others it was commissions. Most, not all, but most of the bonus recipients had NOTHING to do with the credit default swaps. Secondly, most of the bonus recipients that DID, worked in London; have already left AIG and are NOT returning their bonuses. Good luck to Schumer, Fwank, Cuomo , Blumenthal and the other idiots who want to tax it.

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    Default Re: What happened to AIG?

    Quote Originally Posted by Melonie View Post
    ^^^ however, you really must differentiate between deflation of 'domestic' goods and services prices (i.e. local milk prices, local real estate prices) which are experiencing deflation, and the US dollar converted prices or worldwide commodities (i.e. oil, wheat, gold) which are actually rising again. The former are decreasing due to lack of local demand and/or lack of ability of local customers to afford to consume, whereas the latter are increasing due to a devaluation in the exchange rate 'value' of the US dollar.
    One reason why the European Central Bank is so reluctant to go along with the U.S. ; Britain; Japan et.al. and just print money.

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    Default Re: What happened to AIG?

    Excellent piece in the current issue of ROLLING STONE by Matt Taibbi entitled "The Big Takeover". Pulitzer worthy stuff that clearly explains the AIG and related messes.

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