Dan M wrote: > The problem was that no-one (including the board of directors of AIG knew > that AIG was insolvent until the day the government intervened. Bubbles and > panics are part of the nature of the market. You can repeat your mantra of > free markets are perfect until you are blue in the face, but AIG was the > biggest insurance company in the world and no one had any idea of their > problems There is a management consultant named Bob Lewis who puts out a weekly newsletter I get that illustrated the problem very neatly.
Set up a spreadsheet so that cell A1 has the formula "=B1 +1". Then go to cell B1 and enter the formula "=A1+1". Now, most decent spreadsheet programs will not let you get away with this circular reference, but an unregulated market can. Essentially, it all came down to a shell game where everyone was insuring each others risks, and then convincing themselves that they had laid off the risk this way. Regards, -- Kevin B. O'Brien TANSTAAFL [EMAIL PROTECTED] Linux User #333216 "Good teaching is one-fourth preparation and three-fourths theater." -- Gail Godwin _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
