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...have taken on greater urgency, since it turns out that AIG has become the banking industry's ATM, essentially passing along $52 billion of TARP money to an array of U.S. and foreign financial institutions - from Goldman Sachs to Switzerland's UBS. Those firms were counterparties to the credit-default swaps (CDSs) that AIG FP sold at least through 2005, and the companies were collecting on the insurance-like derivatives. AIG paid out an additional $43.7 billion to many of the same banks, which were also customers of the securities-lending operation run out of AIG's insurance division...

Author: /time Magazine | Title: How AIG Became Too Big to Fail | 3/19/2009 | See Source »

...students see an opportunity here, much to their credit, to re–double their efforts–to start companies or join startups where just a year ago they would primarily have joined multinationals firms almost by default,” he said...

Author: By Shambhavi Singh, CONTRIBUTING WRITER | Title: HBS Responds to Article | 3/18/2009 | See Source »

...Rating: AAA*. Quincy’s default risk is as close to zero as any house. No matter what your persuasion, Quincy will satisfy. So if you get The People's House, just imagine all the people ...who wish they'd blocked with...

Author: By Thomas J. Lawless | Title: The Housing Crisis: Quincy House | 3/17/2009 | See Source »

...take a moment to review how AIG made money and why it's now losing so much. Most of AIG's losses have been attributed to its failing positions in credit-default swaps (CDSs). Essentially, AIG is swapping cash flows with other institutions: those banks pay AIG a small sum on a regular basis, and then under certain conditions - like mass foreclosure or corporations' defaulting on their loans - AIG pays out a large sum. In other words, AIG sold insurance; its problem is that it is paying out too much...

Author: /time Magazine | Title: The Case for Letting AIG Fail | 3/16/2009 | See Source »

Moreover, investors and banks that hold credit-default swaps do not necessarily own the tranches of mortgages and bonds that the CDSs insure. AIG may have even written multiple swaps over the same mortgages and bonds. It would be as if an insurance company had sold earthquake insurance on one house to multiple investors. When the house falls, so does...

Author: /time Magazine | Title: The Case for Letting AIG Fail | 3/16/2009 | See Source »

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