AIG's defining moves.
The defining strategic moves at AIG — each one explained and grounded in the record.
The Fall · Decision Forks
AIG Didn't Lose the Bet. It Got Margin-Called to Death.
The story is that AIG lost half a trillion on subprime CDS. The real number is $33.2 billion of paper losses on a $72 billion book — and the killer wasn't a single bond defaulting. It was a credit downgrade that pushed total collateral calls to $32 billion on September 15, 2008.
8 min
The Crisis Response · Crisis Response
AIG Didn't Lose a Bet. It Ran Out of Cash on a Bet It Was Still Winning.
AIG is remembered as the casino that blew up on a $500 billion subprime bet. But only ~$78 billion was on subprime CDOs, and the government's $182 billion rescue ended up returning a $22.7 billion profit. The real killer wasn't loss. It was collateral.
8 min
The Crisis Response · Decision Forks
AIG Didn't Have One Fire. It Had Two, Burning Toward Each Other.
The story is that credit default swaps sank AIG. But a second, quieter book—securities lending—was losing money on a similar scale, and together they hit ~$50 billion by September 16, 2008. The rescue worked. The way it worked is still contested.
8 min
The Fall · Decision Forks
AIG Blamed a London Unit. The London Unit Was in Connecticut.
The story is that a rogue London desk blindsided an innocent insurance giant. But AIGFP was headquartered in Wilton, Connecticut, the riskiest loss came from a business AIGFP never touched, and the parent's own AAA rating was the trigger that pulled the whole thing down.
8 min
The Turnaround · Decision Forks
AIG Paid Taxpayers Back $22.7 Billion. The Number Is True. It's Also Incomplete.
Treasury says it made $22.7 billion bailing out AIG. The figure is real — and it quietly omits a $17.7 billion tax break and the fact that TARP's own AIG investment lost roughly $12.5 billion. The profit was real. So was the part nobody put in the press release.
8 min