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Chapters 8-9 Summary and Analysis
Chapter 8 looks at American International Group, or AIG as it is commonly called. AIG started out as an insurance firm and grew into prominence in the financial products industry under the leadership of Hank Greenberg. In the early 2000s, AIG's financial products section had run afoul of federal regulators and was forced to pay heavy fines for misleading federal investigators at the Securities and Exchange Commission.
The financial products arm of AIG, called FP, was started in 1987 and traded heavily in derivatives, which are financial instruments based on underlying assets like residential mortgages. The department made a great deal of money, boosting AIG's earnings and convincing them they were practically indestructible. By May of 2008, however, the derivative market had sunk and the firm posted a first quarter loss of $7.8 billion.
AIG's board fired Martin Sullivan, the CEO and hired Bob Willumstad, one of the board...
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This section contains 399 words (approx. 2 pages at 300 words per page) |
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