> Sam wrote: > > So you're saying AIG gambled with it's assets that covered insurance > policies. But insurance wasn't the problem.
Nope. You've forced me to try an analogy. Let's say you run a business and your wife runs her own separate business: You sell widgets and she sells insurance, but you co-own both. You've paid for your inputs, are selling your outputs, and your widget biz is making a decent profit. Your wife has sold $40 million in house insurance, she's collecting premiums, and you two are living like royalty. But there's a catch: your wife didn't call it "insurance" she called "a swap" which means she doesn't have to follow insurance regulation which means no reserve. Then a hurricane hits and wipes out every house your wife sold a swap on. Her biz now owes those swap counter-parties $40m. Since she has no reserve she can't pay so now both your business and her business are bankrupt. Plus the home policy owners are out of luck because you're broke. That was AIG. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Want to reach the ColdFusion community with something they want? Let them know on the House of Fusion mailing lists Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:307304 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=89.70.5
