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Call To "Open Source" AIG Investigation
VValdo writes "As you may recall, the citizens of the US shelled out about $85 billion to bail out AIG and its creditors (Goldman Sachs in particular) last year. But as 80% owners of AIG, we still don't know what happened, exactly. That may change. In a new op-ed piece, former prosecutors (including former NY governor Eliot Spitzer) are calling for the US Treasury to force AIG to release its treasure-trove of emails to the public before allowing AIG to 'break free' of our control. As the prosecutors put it, 'By putting the evidence online, the government could establish a new form of "open source" investigation. Once the documents are available for everyone to inspect, a thousand journalistic flowers can bloom, as reporters, victims and angry citizens have a chance to piece together the story.' Good idea?"
We own 80% of AIG, so 80% of AIG is technically part of the federal government. That means we should have open access to everything just like we should have open access to the Congress, senate, court system, etc.
We need that and a 'Cultural Revolution' that fights back against the idea that the upper class knows what's best for the rest of us and that any attempt to eek out even 4% more of their wealth from them is not socialism at all.
We know exactly what happened... a few *idiots* in AIG's derivatives trading department thought they could sell credit default swaps on mortgage backed securities without keeping *anything* in reserve. It's actually a great strategy... unless housing prices go down, in which case you will take huge, mind-boggling losses. Essentially a few people in one department of an otherwise well run institution took down the whole thing by drastically underestimating risk.
Credit default swaps are an insurance product. If you sell them, then you had better keep proper reserves to cover claims AND you had better buy reinsurance in case there is a market downturn. AIG did neither and went kaput.