Regular pen pals: the SEC and AIG
Speaking of AIG, on Tuesday the SEC released a virtual treasure trove of comment letters — more than 30 — between the agency and the troubled company dating back to the months before AIG (AIG) practically imploded and took the economy along with it. Judging by the first response in the batch, the SEC began asking questions in April 2008 and were particularly focused on the Credit Default Swaps. We particularly liked this statement in a May 23 letter to the SEC:
Under the terms of most of these credit derivatives, losses to AIG would generally result from the credit impairment of the referenced CDO bonds that AIG would acquire in satisfying its swap obligations. Based upon its most current analyses, AIG believes that any credit impairment losses which may emerge over time at AIGFP will not be material to AIG’s consolidated financial condition, but could be material to the manner in which AIG manages its liquidity.
Not exactly how it turned out, huh?
We haven’t read all of the letters — there’s simply too many, even for us. But we’re guessing that there’s lots of other pearls in there so feel free to take a whack at them — the whole sorry stack can be found here and let us know if you find something else juicy.
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Posted in Tags: AIG, comment letters |
 3 Comments » |
August 19th, 2009 at 2:16 pm
In Barney Frank’s words: “What planet do you spend your time on”, you you understand the business you are writing about? because what AIG said was absolutely accurate and is still completely accurate. It was the liquidity crunch that cause the down fall and all those credit securities are safe with the Government in the shape of Maidenlane II and III. Next time you get the urge to make a fart like this, please stop, think and then dont.
August 19th, 2009 at 2:39 pm
@zia44444: Sorry you disagree, but that’s not the way I’m reading it. And, next time you get the urge to post a nasty comment on my site, please stop, think about it for a moment and use spellcheck since footnoted readers tend to be a bit more intelligent than the typical blog reader.
August 25th, 2009 at 9:57 am
“liquidity crunch” = writing “insurance” with no collateral ?
anyway, at the link i ponder:
To the uneducated, say someone like me, it appears AIG gave “x” number of employees early vesting, re: faster bonuses, at the same time they were trying to explain to the SEC why their hallucinogenic valuations of their credit default swap portfolio was $18B “off”.
Note the date of this correspondence? March 2008.
i did not spend more time digging beyond that particular letter.