Tuesday, April 12, 2005

What did AIG do?

So, last night I was flipping through radio stations, trying for a little news on the way home from the parking lot. 10 minutes isn't a lot of time, so I get snippets from several stations and then pick the interesting one. Last night it was 'Marketplace' on NPR. Despite the insidious left-wing bent, sometimes I pick up useful stuff from them. Heck, I read Al-Jazeera and the New York Times daily, too. Anyway, it was an interesting segment on how the great liberal financier and guru Buffet was exonerated during the hearings, but that that eeevil Greenberg was going down. In fact, Greenberg was probably going to take the fifth, further evidence of his malfeasance. Hmmm…I thought that wasn't quite the way that was supposed to work. But before I had time to ponder that, the conversation changed to the nuts and bolts of what AIG did.

Basically, as the expert explained it, AIG created an entity which they then paid some current receipts to in a re-insurance scheme, borrowing the money back in order to make it look like they had higher reserves than they actually did. Thus they were able to 'plow more money' into dividends and profits, making the company look more financially sound than it was.

Ah, the criminals! Only Congress is allowed to engage in that kind of activity, and they call it 'Social Security', not 'insurance'.

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