AIG's Small London Office May Have Lost $500B

[sabra]

Source: ABC News

Feds, Brits Probe AIG's London Office on $500B Losses

Ground zero for AIG's spectacular implosion, which has soaked up more federal bailout money than any other entity, appears to have been a small London branch office that may have lost nearly half a trillion dollars in bad deals.

The disastrous deals were built up in a decade and, when the crisis hit, the man who ran the unit for the last eight years retired after making $280 million for himself and leaving with a $1 million-a-month consulting contract.

...

The unit's small group of traders risked nearly half a trillion dollars to insure U.S. mortgages and other debt using complex financial products called credit default swaps, according to recent congressional testimony.

...

For about a decade it went OK," Koenig said. "And then, when the U.S. housing market fell out instead, they suddenly realized they had to come up with a half a trillion dollars and all they had was a couple of million in the bank."

The collapse became so severe that AIG warned the U.S. Treasury Department last month that if it wasn't given more federal aid, its failure "could potentially bankrupt or bring down the entire system."



Read more: http://abcnews.go.com/Business/story?id=7045889&page=1

[sinkingfeeling]

1. Joseph Cassano may well be one of the first crooks to be charged.

Joseph Cassano, an American who ran the group for eight years, declined through his lawyer to talk with ABC News. But ABC News obtained a tape of Cassano from August 2007 telling investors just how confident he was.

"It is hard for us with, and without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions," Cassano bragged.

[depakid]

17. That seems to be the case

From Oct 8, 2008:

http://www.youtube.com/watch?v=zv1xSipXWM8

However- one wonders whether he's simply going to be a fall guy for many other equally if not more culpable parties with less provocative names.

[jimshoes]

2. Fraud come readily to mind

as does prison time if not capital punishment for these crimes against humanity. Not much less severe than genocide if you ask me. Thievery on an unfathomable scale.

[MorningGlow]

3. How in hell do you "lose" $500B and nobody says anything for that long?

Did they check under the couch cushions?

[CJCRANE]

4. "$1 million-a-month consulting contract".

"The disastrous deals were built up in a decade and, when the crisis hit, the man who ran the unit for the last eight years retired after making $280 million for himself and leaving with a $1 million-a-month consulting contract."

:wtf:

[aquart]

22. Has anyone terminated that contract yet? Anyone?

[KansDem]

5. "May have lost" half a trillion?

May have lost...? A "half trillion" dollars? They don't know yet?

[dkf]

6. They are still unwinding trades.

Its not over yet.

[Buttercup McToots]

12. Rumor has it...

700 Trillion...is the damage cost...
See why they don't want to tell you anything?

[jimshoes]

14. Who will be the first to use the term

Quadrillion Dollar loss

[Buttercup McToots]

16. Still waitin`

for the multi trillion word...

[dkf]

7. Oh the irony! Were these British traders?

[Skink]

8. So of course the Govetnment of England, Oh nevermind.

[bvar22]

9. No Sweat.

The American Taxpayer will bail them out!
WE have such a nice government.

[dipsydoodle]

10. How fortunate

it wasn't a big office :sarcasm:

[Buttercup McToots]

13. Little office...

Little office...with just over 300 peeps...
They broke it...or the greed did...

[NorCalDem]

11. It's Obama's fault right?

I mean, he both convinced them to make these deals AND he busted consumer confidence all month. This has to be his fault, right?
:sarcasm:

on a more serious note, nearly all who worked in that London office belong in Jail by the way. I'm quite sure they all make a comfortable living on what is now known to be stolen money!

[Buttercup McToots]

15. highly confidential document where AIG explains to the government why it has to be saved.Sickening

http://www.scribd.com/doc/13112282/Aig-Systemic-090309

AIG -Still A Pain

AIG has Bernanke steaming and most taxpayers as well. Those in the business always had an extreme dislike for the good folks at AIG. Let's just say the company was the 800 pound gorilla and it used its weight to get its way more often than not. If there was a way to game the system, AIG found it. So I have to say those in the industry are not shedding big tears.

Nonetheless, AIG has itself so intertwined financially with so many other entities that it is able to convince the U.S. Government that it is indispensable. And so far, we are biting. Here is a highly confidential document where AIG explains to the government why it has to be saved. This is truly sickening.

http://seekingalpha.com/article/125014-the-fed-and-aig-still-give-the-market-troubles

[aquart]

20. Buy them and wind them down.

And the cost of doing business with them is FIRST a clean sweep of their executive staffing. And everybody leaves emptyhanded. No one should give those bastards a penny. It's good money after bad. It won't save anything they are claiming to save.

Don't give them anything that isn't designed to remove their existence from the planet.

[On the Road]

24. That's Pretty Much What's Happening

Last I remember, 80% of AIG was owned by the feds.

[ConcernedCanuk]

18. And I'm tryna survive on 500 bucks a MONTH

.
.
.

HEY

If I had that 500 billion

I could live for a billion months!

as for the guy who ONLY gets 1,000,000 per month

I could live on that for 2000 months

or use 1,000 a month and live for another 1,000 months

hell - that's over 80 years

I'm almost 60

so let's go fer $2000 a month

and should take care of me till I'm 100

damn

WHAT DO THE RICH DO WITH ALL THAT FUCKING MONEY!!

Watch us poor people die on their big-screen TV's??

end of rant . . .

(sigh)

[JFKfanforever]

23. Try one of these "bailout banks" for a loan....

Banks Grabbed $50 Billion in AIG Bailout Cash 

By Barry Ritholtz 

March 7th, 2009 

Yesterday, in Backdoor Bailouts for Goldman Sachs, we noted
that GS, 
as well as Morgan Stanley, Merrill Lynch,
and Deutsche Bank, were all 
made whole on their bad
bets with AIG. 

That's right, what was misleadingly described as systemic risk
turned 
out to be in large part little more than a
counter-party bailout - 
money for the very same
people who helped cause the problem. 

Only the $25 billion figure I mentioned was off by 100% - the
WSJ is 
reporting this morning it was $50 billion
dollars, almost a third of 
$173 billion total AIG
loot: 

"The beneficiaries of the government's bailout of
American 
International Group Inc. include at least
two dozen U.S. and foreign 
financial institutions
that have been paid roughly $50 billion since 
the
Federal Reserve first extended aid to the insurance giant. 

Among those institutions are Goldman Sachs Group Inc. and
Germany's 
Deutsche Bank AG, each of which received
roughly $6 billion in 
payments between
mid-September and December 2008, according to a

confidential document and people familiar with the
matter. 

Other banks that received large payouts from AIG late last
year 
include Merrill Lynch, now part of Bank of
America Corp., and French 
bank Société Générale SA.


More than a dozen firms with smaller exposures to AIG also
received 
payouts, including Morgan Stanley, Royal
Bank of Scotland Group PLC 
and HSBC Holdings PLC,
according to the confidential document." 

Now you know why the Fed was so reluctant to reveal who the

coutnerparties were. 

This is a giant FUCK YOU to the American taxpayer. Isn't there
some 
Congressmen (besides Ron Paul) who are morally
offended by the Paulson 
plan, which is slowly
becoming the Geithner plan? Isn't there 
anything
that can be done? 

According to the WSJ, these are the counter-party banks paid
by AIG 
with bailout money: 

Covered Counterparties 
 
Goldman Sachs 
 
Deutsche Bank 
 
Merrill Lynch 
 
Société Générale 
 
Calyon 
 
Barclays 
 
Rabobank 
 
Danske 
 
HSBC 
 
Royal Bank of Scotland 
 
Banco Santander 
 
Morgan Stanley 
 
Wachovia 
 
Bank of America 
 
Lloyds Banking Group 

This is simply unconscionable . . . 

[On the Road]

25. That's Why AIG Needed So Much

and why the government has been so willing to bail them out. The losses they incurred were insuring other banks for their own unwise risks.

AIG itself would have been allowed to go under. Problem is, they would have taken most of the companies on that list down as well.

[maxsolomon]

19. but if you don't give them bonuses

all those traders will go elsewhere.

it's in the interests of the global economy to keep them contained.

[aquart]

21. Guantanamo will be vacant. It's a very nice container.

If you really hate someone.

[Sancho]

26. This may be a case where gitmo and torture are justified!

Until some of these people are put in jail, no one will trust any governments. I have Valic annuities, and Valic was bought by AIG. No one knows if all our retirement is gone.

Are financial "wizards" covered by the Geneva Convention. They don't seem like combatants to me.


:grr: