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AIG Bonuses: Legalized Theft Has Found Its New Champion
Whatever happened to being paid for performance and rewarding competence? Have corporations and the present day slime that runs them become so corrupt that all hope for some kind of decency and moral leadership has become lost?
You see, there’s something to be said about recessions, or a more severe recession in this case. Anything bad that can happen — will happen. When the economy hums along, most people gain from the “rising tide that lifts all boats” theory, or at least they are able to keep their heads above water long enough to not feel compelled to say a…
16Mar2009 | Oxbury Research | 0 comments | ContinuedThe Inside Story of the Collapse of AIG
There’s nothing fundamentally wrong with the core insurance business units of American International Group Inc. (AIG). Nothing at all. What imploded the venerable insurance giant was an accumulation of misplaced bets on credit default swaps.
By the best estimates of the International Swaps and Derivatives Association and the Bank for International Settlements (BIS), often referred to as the central banks central bank, the notional value of credit default swaps is some $62 trillion, or 35 trillion British Pounds at an exchange rate of $1.78.
A credit default swap (CDS) is akin to an insurance policy. It’s a financial derivative that a debt…
23Sep2008 | Money Morning | Comments Off | ContinuedFed Steps in and Bails Out AIG to the Tune of $85 Billion in Taxpayer Funds
In a stunning reversal, the U.S. Federal Reserve offered American International Group Inc. (AIG) access to $85 billion in exchange for a 79.9% stake in the largest domestic insurer.
After AIG shares were violently whipsawed in the market, first on reports of a possible bridge loan, then later on reports that the $40 billion emergency loan request from the government had been denied, representatives from the Fed and U.S. Treasury Department met to discuss the fate of the insurer deemed by many “too large to fail”.
“The administration is approaching an unprecedented step, but unfortunately we are living in unprecedented times. Hearing…
18Sep2008 | Money Morning | Comments Off | Continued
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