Don't Put All Your AIGs in One Basket

Several times recently, I have been stunned by something I have read in the NY Times: NEWS.The latest stunner is, “Propping Up a House of Cards," an informative description of the troubles of the most troubled commercial enterprise in the world, American International Group (AIG).  Taxpayers, probably American, appear to be on the hook for up to one-quarter of a trillion dollars to bail out AIG, even though, interestingly enough, the damage was done primarily in the London office of AIG.AIG will not be allowed to collapse because of the worldwide financial destruction that would ensue. That would be in addition to the $40+ trillion, and counting, financial destruction we have already seen.  Lehman Brothers, minute in comparison to AIG, was allowed to collapse and the collateral damage was devastating. Never again! ... or at least that is the argument.Long story short, AIG used its sterling AAA business rating and its cozy relationship with regulators to sell...(Read Full Post)

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