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View Diary: AIG Counterparties Revealed! (38 comments)

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  •  No doubt, but I think a less likely one (2+ / 0-)
    Recommended by:
    exmearden, NotGeorgeWill

    The question is whether one prefers the certainty of that kind of cataclysm, or the possibility of one with a chance of avoiding it.  I prefer the latter.

    •  the way forward for AIG (2+ / 0-)
      Recommended by:
      truong son traveler, jayden

      seems completely unclear.

      Doesn't this reveal a completely failed business model run amok?

      How does AIG make its profit in the future?

      AIG's investment house of cards is slowly and painfully unraveling. I can't see how the company's structure, even with the propping of billions, can continue to exist and support the institutions in a functional way, unless it continues to live off of Fed infusions.

      Perhaps I'm missing the overarching picture here.

      The future belongs to those who give the next generation reason for hope.
      Teilhard de Chardin

      by exmearden on Thu Mar 05, 2009 at 12:33:02 AM PST

      [ Parent ]

      •  The problems are just in the financial division . (2+ / 0-)
        Recommended by:
        MJB, JG in MD

        the regular insurance business is still profitable.

        I believe what will happen is the older insurance divisions get spun off and purchased by other companies.  The money from the sale of the profitable divisions goes to pay off a percentage of the massive black-hole that is the financial services side of AIG.  Tax-payers get stuck holding the bag (and the losses) until the issue with the swaps gets cleared up.

        Essentially AIG has been nationalized and the government is buying it time to spin off its divisions that are still viable; the Fed will get the dollars from the sale of parts, and it will dispose of the rest of the company.

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