Web Letters: AIG: Billions Dished Out in the Dark

Yes, it is quite a rip-off to pay the billions to AIG, but hardly an astonishing insight. Give us some some ideas, some analysis. What should have been done? Would it be less damaging to simply let the company go out of business? Or not? All I can get from this article is one more cry about how awful things are. Yes, let's put few of them in jail, but what should the policy be? Where are you, editors? Get some writers with ideas, perhaps even original.

William Haynes

Lynchburg, VA

April 13, 2005

Ex-AIG CEO gives $2.2B in stock to wife

Gift of 41.4 million shares given three days before Greenberg forced from post

WASHINGTON (Dow Jones) - Maurice "Hank" Greenberg, who last month relinquished his posts as chairman and chief executive of American International Group Inc. ( AIG) amid intense regulatory scrutiny, reported Tuesday a gift of 41.4 million company shares to his wife, Corinne P. Greenberg....

Jean Robertson

Cleveland, Ohio

Unfortunately, the former treasury secretary, the fed chairman and the current treasury secretary all knew full well that AIG would need more money. AIG's CDS counterparties did not require them to post any collateral for the trades they made. As their insurance on company bonds and mortgage-backed securities requires them to pay out, there is no money in the lockbox to pay these premiums already. This is in contrast with Lehman Brothers CDSs, which at the time of their bankruptcy many feared would be ruinous. However, on the date of settlement, because Lehman was forced to post collateral, the contracts were enforced without a hitch. That said, anyone who thought AIG would not need much more money at the time of the first $80 billion was surely betting on market recovery between now and then. There is nothing fraudulent or insidious about AIG's need for more money: things are continually getting worse, and they made naked bets that things would continue to get better.

Brent Lundberg

Dallas, TX

Sure AIG acted irresponsibly, as Scheer and Fed Chairman Bernanke note. But still the government (we the people) ponies up another $30 billion to keep this insurance/hedge fund behemoth afloat. More to the point, AIG acted criminally when it attached its AAA ratings to the sub-prime toxic junk mortgages that it insured and turned into derivatives in its dealings with Citibank and a whole host of now zombie banks around the world. So Iceland went down. And now Latvia and soon Ireland, and who know who's next? Some "free market"! Is it asking too much that these criminal actors be brought to justice?

Howard Kaplan

Belmont, MA