Comments on: Redemptions – The sound of failure.

By: Lars Eirik

Lars Eirik — Sun, 23 May 2010 11:42:54 +0000

The strange thing about the AIG story from NY Times is AIG's assumption that the CDS contracts would become "obsolete" when capital requirements for European banks changed, since the contracts were agreed to only to "help banks comply" with regulations.

The help given was actually insuring those debts from default.

Seems odd that AIG would be so gullible that they believed the banks would terminate the contracts at a time when this protection is more needed than ever - considered as insurance.

The assumptions of AIG imply that the contracts were not from there side entered into as "bona fide" insurance, but more like make-believe contracts for the finance regulation authorities in Europe. It'a a bit similar to Goldman Sachs "aid" to Greece to hide its debts before entering the Euro.

Well, now the situation has changed, and the banks really need that insurance. And the AIG is stuck with it - unless future bail-out money comes with a provision: For US institutions alone.

By: Tam

Tam — Sun, 23 May 2010 09:19:59 +0000

possible good(ish) scenario : http://www.sing365.com/music/lyric.nsf/Nothing-But-Flowers-lyrics-Talking-Heads/630217B28F2ED0BF482568B0002F87FA

very bad case scenario :
http://www.youtube.com/watch#!v=iQo0BQM3OlQ&feature=related

By: RichGB

RichGB — Sat, 22 May 2010 10:12:46 +0000

If Scotty can't find the reset button then perhaps something extraterrestrial can; though, the greatest peril will probably be of our own making.
Would anyone dare to predict how the World will look in 20 years time, both the good and the bad scenario?

By: Golem XIV - Thoughts

Golem XIV - Thoughts — Sat, 22 May 2010 07:47:13 +0000

Mr Eirik,

Thanks of the link. Interesting article.

By: Lars Eirik

Lars Eirik — Fri, 21 May 2010 21:39:36 +0000

http://dealbook.blogs.nytimes.com/2010/05/21/calculating-a-i-g-s-big-european-exposure/?ref=business