Insuring money with money is stupid. As a business person I understand the desire to minimize risk, but insuring a derivative [money] with money is nothing but calculating risk. It starts getting complex from this point on, the concepts are complex themselves… the math as you go deeper into each stage is probably mind boggling, but I have yet to see any. It is pretty unbelievable that Liddy is getting death threats for unwinding the conditions that existed before he even got there. Additionally, he isn’t being paid for it other than the good will that is created. He’s already unwound all of the CDF’s apparently.
Update:
I have a feeling that “too big to fail” is going to change to “too big to exist that big.”
Update:
No one was complaining when there was very dramatic profits, but when the brick wall was hit, everything relied on insurance… AIG and AIGFP playing both sides.
Update:
People tend to think that “Retention Bonus” has to do with keeping them on board now. But it really means having them stay to unwind a bad situation, these guys aren’t even involved in causing the problem. The compensation is apparently in return for staying from January 2008 to December 2008 instad of leaving last year when it all hit the fan.