Evidence Mounting That AIG is the Money Black Hole

AIG is at it again.  I had written previously that AIG is throwing your money into a sinkhole by using taxpayer money to realize the value is hastily written derivatives that should have little or no value.  In doing so, AIG has helped to prop up other banks by paying out handsomely on insurance policies to cover their losses in the sub-prime debacle.  From an AIG source of TPM:

Our source says it "is becoming assumed throughout the industry that AIG FP finding new ways to roll over" -- which is to say, using bailout money to offer counterparties on its trades generous terms in closing out its contracts with the massive issuer of credit default swaps and other exotic derivatives options.

Thus, banks have turned in an unexpectedly good quarter with help from the taxpayer. Wouldn't it be nice if all insurers would roll over and give generous pay outs? Instead, there is the standard operating procedure of low balling blue-book while keeping your car and it's many salvageable parts and then forcing you to keep it or fight through layers of call centers (paid for by your insurance premiums) to get the actual fair replacement value.

The joke doesn't stop there though.

While he did not want to name names or go into detail about any specific transactions, he said we should watch for signs of AIG FP employees being rewarded for their generosity with jobs working for their old counterparties under eyebrow-raising terms -- "like if you have a noncompete," the source explained, "and you go to a competing firm doing something far below you for an extreme salary."

Not surprisingly, credit for keeping the banking sector will go straight to the banks, and perhaps those smart cookies at AIG who knew how to spend billions of taxpayer dollars.  The price for gambling and losing your investors money, then asking the government to bail you out so your poor decisions would not allow other gamblers to fail? A new cushy job when your unit bites the dust.  No thanks to that evil government of the people and their ill gotten bailout dollars.

Keep those eyes peeled for richly rewarded underperforming executives to continue to be richly rewarded for underperforming.