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|Includes: American International Group Inc (AIG)
Below are a few quotes from sequestered emails from AIG. This was in 2007 when the s**t was about to hit the fan.
From the Washington Post:
“The Goldman collateral call raised eyebrows at AIG headquarters. The mantra at Financial Products (me: that’s a unit in AIG responsible for calculating risk of CDO’s) had always been that the credit-default swaps were safe; the models showed a 99.85 percent chance of never having to pay out.”
Brilliant, brilliant modeling. 15 chances to 1000. I wonder if the developer of the modeling programs took the time to calculate the outcome result if one of those 15 occurred, or the outcome if all 15 occurred at the same time?
I would like to know the name of this brilliant math programmer who developed this model so I can personally thank him for the financial destruction he has caused countless Americans.
If someone’s actions are so fragrantly disastrous that they cause you server harm. Can’t you go after them in a civil court? Not AIG vs. the stockholders but the individual making the horrendous mistake vs. the taxpayer? I could hawk his Rolex and buy some stock in AIG.
This from an email dated July 18, 2007. Seems, Joseph Cassano, Tom Athan, Andrew Forster and Steve Bensinger owe me their Rolexes.
“1. AIG’s investment and derivative exposures are very highly rated
(mostly AAA and above) and largely immune to principal loss, even
considering that the mortgage market may have not reached bottom in
view of the large volume of sub-prime adjustable rate mortgages that
will re-set interest rates later this year and in 2008.
2. The majority of the residential mortgage-backed collateral (RMB S)
exposures and almost all the CDO of ABS exposures (both cash and super
senior) with any sub-prime collateral are from 2005 and before
vintages. Thus, they are not exposed to the troubled 2006 vintage,
where low documentation, adjustable rate mortgage collateral dominated
and which formed the basis of most recent rating agency downgrades.”
“4. Most of the CDO of ABS exposures with sub-prime RMBS collateral at
AIG-FP and AIGGIG are in managed pools led by highly experienced
managers of whom AIG officers have done very thorough and continuing
due diligence.
5. The underlying collateral in these CDO of ABS pools is updated and
evaluated monthly by our own investment, research and credit
It sure makes me feel good that these highly paid, big brained, big ego idiots control the collective fait of so many people. I also wonder if Joseph, Tom, Andrew and Steve still work for AIG, now making big bucks courtesy of the US taxpayer, you and me.
And this from CBS, April 27, 2009:
“A $5 million Connecticut mansion. A $4 million London townhouse. A $7 million English estate. The houses are owned by three men CBS News has learned are now the subjects of a Justice Department criminal investigation into how AIG crumbled.

Sources say investigators are digging into whether Joseph Cassano, the former head of London-based AIG Financial Products, and two of his top deputies - Andrew Forster, an executive vice president, and Thomas Athan, a managing director - committed securities fraud and other federal crimes.”
Hay, justice department I want my Rolex!

Disclosure: none