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At A.I.G., Good Luck Following the Money
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About $50 billion of the $170 billion in government money that went to AIG has gone to counterparties that bought credit default swaps from AIG, couterparties like Goldman Sachs, Merrill, Societe Generale, and Calyon another French bank. The Fed has resisted disclosure of these names. If the Fed had not done this insurance experts say some of these banks would have taken hits on their capital cushions, which they keep as reserve against such losses. And they say these banks would have been stretched if that happened. These counterparties were made whole against these losses. Critics ask why these counterparties should not have been compensated with a discount, so that they bore some risk and took a small haircut. But it appears that with the banks in a fragile condition the Fed decided to take this step.
Government Bailout of AIG
02/24/2009
The burgeoning cost of bailing out AIG. The cost is approaching $200 billion and is the costliest corporate bailout so far.
Grouped Articles
Cost of Bailouts Continues to Decline
Wall Street Journal 05/10/2013
Wall Street Journal 06/16/2015
In A.I.G. Case, Surprise Ruling That Could End All Bailouts
New York Times 06/15/2015
Ex-A.I.G. Chief Wins Bailout Suit, but Gets No Damages
New York Times 06/15/2015
AIG Seeks to Ease Its Bailout Terms
Wall Street Journal 02/24/2009
Any Takers for AIG's Asian Arm?
Wall Street Journal 02/25/2009
$52 billion of government money to go through AIG to banks and in turn to hedge funds for betting against the housing market.
01/19/2009
The Financial Products Group's 370 person staff at AIG earns bonueses of $400 million for AIG insurance sold at "fractions of a penny for every dollar covered, less than $10 million for $1 billion of insurance" (WSJ). It costs the government $52 billion to take care of this and $165 million in bonus check go out for retention incentives with binding contracts to these staffthe same week. Thats the kind of financial innovation that has exacerbated the turmoil and created acrisis of condfidence for financial markets in the USA by March 2009.
Grouped Articles
BusinessWeek 04/01/2010
Hedge Funders Are All a Little Nuts
Wall Street Journal 08/27/2013
In New Books, a Look at People and Places That Innovate
New York Times 09/04/2010
Hank Greenberg Still in the Ring at 90, Battling A.I.G. Charges
New York Times 04/30/2015
Wall Street Journal 06/16/2015
In A.I.G. Case, Surprise Ruling That Could End All Bailouts
New York Times 06/15/2015
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