Go read this very good (and disconcerting) post on AIG by Sam Jones at FT Alphaville (hat tip reader Richard). Key sentence:
Goldman won’t say it, but we will. AIG is going the way of the monolines… but on a much larger scale.
Boldface his.
Note that the Bloomberg story on the same Goldman research report is comparatively anodyne.
The problem of management not really knowing balance sheet exposures is actually widespread and long-standing, as Michael Lewis has argued (and reader Danny has provided further supporting evidence).
I know of one bank that recently provided a large loan to AIG and said it went over the financials in detail and was “completely comfortable” with the credit (and this is after the insurer’s not-pretty second quarter earnings release). It is remotely possible that AIG has some undervalued assets somewhere. If so, they had better start realizing value on them, or at least talking them up, pronto.
S 
Posts
wow FT site is down