Tuesday, December 09, 2008

AIG: A Black Hole?

by Calculated Risk on 12/09/2008 09:45:00 PM

From the WSJ: AIG Faces $10 Billion in Losses on Trades

American International Group Inc. owes Wall Street's biggest firms about $10 billion for speculative trades that have soured ... The $10 billion in other IOUs stems from market wagers that weren't contracts to protect physical securities held by banks or other investors against default. Rather, they are from AIG's exposures to speculative investments unrelated to insurance, which were essentially bets on the performance of bundles of derivatives linked to subprime mortgages, commercial real-estate bonds and corporate bonds.
Meanwhile, from Bloomberg: AIG Says More Managers Get Retention Payouts Topping $4 Million
American International Group Inc., the insurer whose bonuses and perks are under fire from U.S. lawmakers, offered cash awards to another 38 executives in a retention program with payments of as much as $4 million.

The incentives range from $92,500 to $4 million for employees earning salaries between $160,000 and $1 million, Chief Executive Officer Edward Liddy said in a letter dated Dec. 5 to Representative Elijah Cummings.
Please make it stop ...