AIG owes Wall Streetâs biggest firms about $10bn for speculative trades that have soured, reports the WSJ, underscoring the challenges facing the troubled insurer as it seeks to recover under a US government rescue plan. The details of the trades go beyond what AIG has explained to investors about the nature of its risk-taking operations, which led to the firmâs near-collapse in September. In the past, AIG has said its trades involved helping financial institutions and counterparties insure their securities holdings. The speculative trades, engineered by the insurerâs financial-products unit, represent the first sign that AIG may have been gambling with its own capital. The soured trades and the amount lost on them have not been explicitly detailed before. In a recent quarterly filing, however, AIG does note exposure to speculative bets without going into detail. An AIG spokesman characterised the trades not as speculative bets but as âcredit protection instruments.â He said that exposure has been fully disclosed and amounts to less than $10bn of AIGâs $71.6bn exposure to derivative contracts collateralised debt obligations as of Sept 30. http://online.wsj.com/article/SB122887203792493481.html?mod=testMod Just call Helicopter Ben...
I would urge everyone here to trade extra carefully because it is you that ultimately has to pay for this out of YOUR winning trades