I'm Still Shorting AIG
Tim Knight | Nov 09, 2018 12:04PM ET
One of my many short positions is one that I have based my investment on not just a chart but on vitriolic hatred. The company is American International Group (NYSE:AIG). The company cranks out all kinds of deceptive and misleading ads about all the fine work they’re doing, but let’s remember what happened in 2008 and with one particular criminal, Joe Cassano, shall we?
Cassano is alleged to have been responsible for losses of $500bn (£360bn) dealing in worthless ‘toxic’ debts. The team that he headed took huge bets on complex financial instruments called ‘credit default swaps’ used to insure US mortgages and other debts. When the US housing market fell out, the team realised that they had to come up with half a trillion dollars and all they had was a couple of million. The company received a $132 billion taxpayer bailout.
When he was sacked in March 2008 Cassano received $280 million in cash and an additional $34 million in bonuses. He continued to receive $1 million a month until the end of September 2008, even after AIG had received $85 billion in government support. When asked in October why the company still retained Cassano at his $1 million-a-month rate CEO Martin Sullivan told Congress AIG wanted to “retain the 20-year knowledge that Mr. Cassano had.”
Apparently Mr. Cassano has dedicated himself to “philanthropy” since those days, which I suppose means giving 0.05% of his wealth to charity each year so he can attend festive social gatherings. In any event, here’s the chart, and my fervent wish is for a repeat of 2008, except this time, for the company to go bankrupt As God Intended back in 2008.
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