Elephant Flop

AIG and the Free Lunch Myth

Actually, it does fit the definition of a Ponzi scheme. The "payouts" to increasingly nervous "ground floor" earlier "investors" are the collateral demands
in the above WSJ chart. The scheme collapsed when AIG had no more assets to pony up to the most sophisticated *suckers* in the world.

Or maybe they aren't the suckers since we taxpayers are footing the bailout bill, even as we continue to pay into our own state sponsored Ponzi - trading under the ticker of "social security."

What hurts is listening to Hank Greenberg's Ponzi Polka.

www.indybay.org/newsit...


On Nov 05 12:12 PM mdmrjsds wrote:

> What you describe AIG as doing isn't a Ponzi scheme. The classic
> Ponzi / pyramid scheme has payouts to earlier joiners coming from
> later joiners. e.g. Social Security, Medicare
>
> What you describe above is fraud, taking money from customers without
> providing the value you promised for it. Obviously, AIG had no intention
> of honoring these contracts if they didn't make provision for them.
> They were selling empty promises based on the value of their name.