Do not miss this front-page article in today's Washington Post on AIG:
The Beautiful Machine
By Robert O'Harrow Jr. and Brady Dennis
Washington Post Staff Writers
Monday, December 29, 2008; Page A01
By Robert O'Harrow Jr. and Brady Dennis
Washington Post Staff Writers
Monday, December 29, 2008; Page A01
This is the first of three articles in the Washington Post detailing the history of AIG's Financial Products division and how it brought down the venerable (and surprisingly vulnerable) international insurance firm.
Many of the most compelling aspects of the economic cataclysm can be seen through the story of AIG and its Financial Products unit: the failure of credit-rating firms, the absence of meaningful federal regulation, the mistaken belief that private contracts did not pose systemic risk, the veneration of computer models and quantitative analysis.
AIG insiders cooperated with the journalists, both on the record and of, making for a detailed and nuanced story.
UPDATE: Links to Parts 2 and 3:
Part 2 | By 1998, AIG Financial Products had made hundreds of millions of dollars. Then it subtly turned in a dangerous direction.
Part 3 | How could a single unit of AIG cause the giant company's near-ruin and become a fulcrum of the global financial crisis?
