AIG Posts Largest Quarterly Loss in History
March 2nd, 2009 by Jeb Foster
If you ever want a readable and accurate description of any aspect of the financial crisis, check if Joe Nocera has written anything about it.
Nocera writes the Talking Business column for the NY Times, and his latest description of AIG’s outsized role in our current morass is a veritable must-read. It will help you get a better idea of what a ‘credit-default swap’ is and, more importantly, why they were (and still are) so destructive.
Nocera’s article will raise your hackles when you learn just how irresponsible AIG was, and how despite (and because of) that irresponsibility, they are currently the largest benefactor of U.S. government bailout funds—$150 billion since September. In essence, AIG thought it could get away with collecting insurance premiums (in this case, fees from issuing credit default swaps) without paying out any claims. (The lesson: bad things happen when insurance isn’t regulated.) But enough preamble. Read the article.
Tags: AIG
