Blah, blah, blah, etc.

My Response to Soros' Views of CDS

"Perhaps I’m reading in too much into this sentence but to expect AIG (AIG) to somehow have hedged or offset its CDS trades is akin to an insurance company kidnapping sick people who have bought life insurance and sticking them in incubators to prolong their life."

Insurance companies (responsible ones, anyway) have reserves and investments that are intended to guarantee payment on the policies. When they sell guarantees (in variable annuities, for example), they do buy hedges and make offsetting investments. Also, half the policyholders won't die in a nine-month period, which is what happened to AIG