What's the deal with A.I.G.? Well, here it is

From the New York Times Business pages: "Desperately Protecting A.I.G.'s House of Cards." I've read this type of analysis before, and am satisfied this is the case. They took advantage of the lack of regulation and let their greed overcommit financial resources HUGELY. Yeah, CDSs should have been treated just like conventional insurance--requiring capital to be set aside against losses. But no, they sold CDSs (credit default swaps--"insurance" on investments) like drunken sailors. Bad metaphor, I know. They abused A.I.G.'s triple-A rating and sucked it dry.

The US taxpayers are now paying to clean up the mess, and all this while we're going down with the ship. Fun stuff.