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|Subject: Re: Lifetime Annuity||Date: 10/3/2013 10:34 PM|
|Author: CCinOC||Number: 73394 of 80197|
"...the notorious AIG..."
There's nothing "notorious" about AIG. American International Group, or AIG, is the largest property and casualty insurer in the United States. AIG is also one of the largest companies in the United States placing 10th on the Fortune 500 list of companies in 2007.
From the Wiki link posted by intercst.
AIG faced the most difficult financial crisis in its history when a series of events unfolded in late 2008. The insurer had sold credit protection through its London unit in the form of credit default swaps (CDSs) on collateralized debt obligations (CDOs) but they had declined in value. The AIG Financial Products division, headed by Joseph Cassano*, in London, had entered into credit default swaps to insure $441 billion worth of securities originally rated AAA. Of those securities, $57.8 billion were structured debt securities backed by subprime loans. As a result, AIG’s credit rating was downgraded and it was required to post additional collateral with its trading counter-parties, leading to an AIG liquidity crisis that began on September 16, 2008. The United States Federal Reserve Bank stepped in, announcing the creation of a secured credit facility of up to US$85 billion to prevent the company's collapse, enabling AIG to deliver additional collateral to its credit default swap trading partners. The credit facility was secured by the stock in AIG-owned subsidiaries in the form of warrants for a 79.9% equity stake in the company and the right to suspend dividends to previously issued common and preferred stock. The AIG board accepted the terms of the Federal Reserve rescue package that same day, making it the largest government bailout of a private company in U.S. history.
AIG has fully repaid the assistance from the U.S. Government plus a profit.
I'm no AIG apologist, but this company has been in business for over 90 years and has probably done a lot of good for a lot of people during that time. If anyone is notorious, it's Joseph Cassano.
*Cassano sold hundreds of billions of credit protection in the form of CDSs without having to put up any real money as collateral as this form of insurance had been deregulated with the Phil Gramm-sponsored Commodity Futures Modernization Act of 2000, signed by Bill Clinton. Political writer Matt Taibbi nicknamed him "Patient Zero of the global economic meltdown."
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