Dweezil

AIG Bailout: Over to Congress

Knowitall, AIG has written huge ammounts of CDS's from what I (and everyone else) have read. They were bets AIG was willing to make and if they didn't adequately price the risk or sold more than they could handle that's not my problem.

I look at it the same as writing unsecured puts, no matter how remote the chance there's still the possibility you end up with stock you don't want at a price higher than you can afford. Lesson is don't write something you can't back up. If AIG can't back up the CDS's that were written then they should be left on there own to sort it out.

If other companies suffer from contracts they wrote and get exercised because of it, let them all fall apart. There's nothing backstopping the individual if they make bad calls, what makes a multi-national any different?