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Aig International Drops Over 6%

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http://www.marketwatch.com/news/story/aig-...619E7505BA99%7D

They seem to be leading the falls today on Wall Street. After $11bn loss you can see investors might feel exposed.

Does this represent the start of a big slide in the insurance sector as the credit crunch and derivative losses. So AVIVA, Royal Sun Alliance, Prudential, L&G...

The thing I can't quite understand is why they would be holding this stuff on their balance sheet to start with? I could understand if it was held in funds managed on behalf of policy holders, but that wouldn't produce a writedown like this. There's more to come on this one at a guess.

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The thing I can't quite understand is why they would be holding this stuff on their balance sheet to start with? I could understand if it was held in funds managed on behalf of policy holders, but that wouldn't produce a writedown like this. There's more to come on this one at a guess.

Following the later stuff in the story

AIG Financial Products sold guarantees on CDOs, using credit-default swaps, a type of derivative-based insurance that pays out in the event of a default. It sold "super senior" credit-default swaps that guaranteed higher-quality parts of CDOs.

But as the credit crunch widened, the market value of even the best parts of some CDOs has declined. The complexity of these securities and a slump in trading activity have made them difficult to value, further adding to concerns.

and the link

http://www.marketwatch.com/News/Story/aig-...2009CB7F385A%7D

Seems they were playing with fire. Surely these losses actually appeared months ago, and seems to have been only declated because PwC insisted they be devalued. Accountancy firms must be finding it hard to balance trying to avoid Enron style blame, vs the desire to earn fees.

I think there is much more to come. The whole monoline issue and the proposed (but now forgotten) super SIV were meant to keep the values of these things high. Presumably the auditors just won't play (or will only play to a limited degree) with allowing companies to avoid losses.

I know there was some weird stuff a few months ago, where Banks like GS were reporting elements into their profits, which were changes in the debts they owed on their own bonds because the bonds were now worth less, and thus they'd have to pay back less... so more profit...

The whole mark to model - issue must be hiding some appaling skeletons.

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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