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.