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The Man Who Crashed the World (AIG)
- thomasmallen 17y agoEh, why not. Pages took so long to load, so let's see if my host holds up to their unlimited bandwidth promise. http://www.703designs.com/sites/default/files/article.pdf http://www.703designs.com/sites/default/files/article.pdf Awaits threatening email. If you read this comment after today, expect the link to be dead.
- deleted 17y ago[deleted]
- schizoidboy 17y agoIt would be nice to have something like antiscribd.com.
- thomasmallen 17y agoYea, Scribd was aggravating enough in this case for me to return from a half-year hiatus...I imagine the demand is strong for such a thing!
- jonah 17y agoOr a hypertext version: http://www.vanityfair.com/politics/features/2009/08/aig200908?printable=true¤tPage=all http://www.vanityfair.com/politics/features/2009/08/aig20090...
- christofd 17y agonice article (this is more or less a summary for myself to remember the highlights): -AIG FP was created in 1987 when Howard Sosin, former Drexel Burnham, created a model on how to value and trade interest-rate swaps -The company to make money insuring these transactions could not be a bank (which would be bound by law to hoard unreasonable amounts of collateral), but needed AAA status: thus... an insurance company -AIG stops sub-prime mortgage insurance business in 2005 after realizing that 95% of their mortgage-related portfolio is sub-prime -Other firms instead jump into the lucrative market after 2004/2005... Wall Street underwrites 1.6 trillion $ in sub-prime and 1.2 trillion in Alt-A mortgages from 2004-2007 -AIG is bound by contract to provide collateral in case they lose AAA rating; as such legacy business (built up until 2005) traps them into bleeding collateral in the 2008 crash on their sub-prime credit default swap business -In result AIG runs out of capital reserves to provide collateral -By comparison, no money is lost on their corporate credit default swap business