In a rather refreshing interview, new AIG CEO Richard Booth got right down to it: and said, (and I’m paraphrasing) ...“We’ve already spent 86 of the original 120 billion dollars given to us by the government and the vast majority of that went to rebalance Credit Default Swaps.”
On this board last week, I did a five part series on derivatives and credit default swaps called Parking Lot Futures. Give it a read under my blogs to get a better picture of what this investment really is (or was). Booth also went on to say that AIG; ‘has closed the door on its financial products division and gone back to selling insurance.’ (also in my series).
And lo’ and behold today, Congressman Henry Waxman (D., Calif.) pointedly asked the former Fed chief Alan Greenspan whether he was wrong (about regulating Credit Default Swaps), and Greenspan acknowledged that he had been "partially" wrong about the need to regulate credit-default swaps.
Also today, AIG named Paula Rosput Reynolds as vice chairman and chief restructuring officer, a new position. Reynolds was previously chairman, president and chief executive of Safeco Corp., a property and casualty insurance company that was bought by Liberty Mutual Group last month. Reynolds will oversee AIG's selling of assets and will be chief liaison with the Federal Reserve Bank of New York.
AIG was trading around $2.10 today on 65 million shares traded.
MarketMan
