naked capitalism

mxq says:

imo…i think these failures are ultimately good for the markets. Over the past few q’s (since this mess started) it was interesting that a lot of IB CFO’s would mention that the problem with a lot of abs markets wasn’t that there was a dearth of buyers…it was the fact that there was a dearth of sellers. There aren’t enough people willing to realize their assets are worth 10c on the dollar vs the 70c they have them marked-to-model at.

BSC never really unwound as JPM kept their balance sheet going. LEH (and probably AIG) will be the first time this market has sellers actually selling at prices that people are willing to bid for.

Unfortunately, its taken a bankruptcy and a lot of lost jobs to achieve this end, but my guess is markets improve with the new liquidity at any price provided by LEH unwind.

Anonymous says:

Yves
I am sure that Patterson was using Dinallo as an advisor. And fro m what I know Dinallo’s background is just about ideal to give input.
I have faith that they know where the extra money is, and that it will not hurt insurees.
Besides helping AIG the move seems aimed to keep NYS attractive to Wall Street as downsizing occurs.
plschwartz

mxq says:

Cramer had some good points re: AIG and that business model:

“If you insure something, it had better be quantifiable. If you insure property, you’d better know how much the property is worth. If you insure lives, you’d better know how much exposure you have. If you insure autos, you’d better know the accident rate…

But if you insure the unquantifiable, you are in a different position. If you insure financial instruments and you can’t assess how much you are insuring, then you are taking on a level of risk that is too difficult to handle.

That’s what AIG (AIG) did. It wrote policy after policy insuring mortgages and mortgage portfolios of all shapes and sizes, not just in the United States but in Europe. Especially in Europe.

That’s why AIG is so difficult. We don’t have federal regulation of insurance and we don’t have cross-border regulation of insurance. So we don’t know who has the responsibility of regulating or even helping AIG.”

Anonymous says:

Being someone whos lively-hood depends on an AIG court-ordered structured settlement from a lide altering car accident a couple years ago, I would like to know how this “mess” is going to affect my settlement payments. I called the annuity division and asked the obvious questions and was assured the court-ordered structured settlement annuities are safe. Can anyone shed any light on this situation? I am worried.

Thanks

Lori

howard says:

the fact that warren buffet hasn’t shown any interest in AIG (at least as far as i can tell; admittedly, he could just be discrete) is, to me, an enormous “tell,” and what it’s “telling” isn’t happy….

fred55 says:

without details, i can only guess the following:

(a) the aig company behind the annuity is not the parent

(b) whatever state its in is making sure its adequately capitalized (except in ny, where they are whores now)

(c) the other annuity companies in that state will step in and make up whatever can be made up to protect the industry’s reputation

(d) if you arent going to sleep about this, GET ON THE FONE AND CALL YOUR LAWER AND ASK THE FOLLOWING:

“was the contractual payment obligation satisfied by purchase of the annuity, or was it merely suspended by purchase of the annuity and if the annuity becomes impaired there is a residual payment im entitled to from the defendant”

Anonymous says:

Hi Lori. Fred made some good points. I would however, go to your local state insurance Dept. for assistance. Get the exact name of the insurer that has the annuity. It might not be AIG. I suspect it might be National Union Fire Ins. Co. As long as Nat’. Union or whomever is ‘admitted’ in your state, the Ins. Dept. will have jurisdiction.

Whatever you do, don’t go to one of those viatical settlement companies until you talk to your state Ins. Dept. Good luck.

weinerdog43