Empty Pockets Blues: AIG

I'm one of those people who didn't know what AIG was until a couple of months ago. Now, thanks to taxpayer bailouts to AIG of 150 billion dollars, it has piqued my interest to learn more. There is a good piece in the NY Times that explains all. This includes full description of scams that, even now, our bailout money is perpetuating.

"Here’s what is most infuriating: Here we are now, fully aware of how these scams worked. Yet for all practical purposes, the government has to keep them going. Indeed, that may be the single most important reason it can’t let A.I.G. fail. If the company defaulted, hundreds of billions of dollars’ worth of credit-default swaps would “blow up,” and all those European banks whose toxic assets are supposedly insured by A.I.G. would suddenly be sitting on immense losses. Their already shaky capital structures would be destroyed. A.I.G. helped create the illusion of regulatory capital with its swaps, and now the government has to actually back up those contracts with taxpayer money to keep the banks from collapsing. It would be funny if it weren’t so awful."

We own 80% of this company now. Whaaaaaaaa.