Archive for the ‘finance’ Category
We have all wondered how the financial wizards down on Wall Street managed to help tank the economy. No doubt creative accounting played a substantial role. This clip will explain to you, in a straightforward and easily accessible fashion, just how simple creative accounting can be.
The word is out. Unless AIG pays their executives millions more in bonuses, they might lose the best and the brightest of their employees. Corporate raiders will swoop out of the clouds and plunder their human capital. And then where would AIG be? And then where would we be? (According to FOX, if AIG cannot retain their top execs, it has threatened to morph into a black hole and take the inner planets with it.)
But wait. We may have nothing to fear but fear itself. Let us not forget that AIG is in the business of insuring companies against their own incompetence. The solution is simple. AIG should insure itself against its own incompetence through one of its products, for example, FinancialGuard (see below). So, even if it were to lose its best and brightest by not paying out the bonuses, AIG could still survive through the miricle of insurance.
Here is AIG/Australia hawking one “product” that can help save it (and us):
What is it?
Professional indemnity insurance on a civil liability basis
Why do you need it?
The activities of regulators, the changing distribution of financial institutions products and a more informed and litigious consumer environment lie behind the increase in the frequency of civil liability claims against financial institutions….
Our Civil Liability product provides blanket protection against the financial consequences of a legally enforceable obligation in which a civil liability is incurred arising from services provided. Covers includes defence costs and civil penalties.
Who needs it?
All Financial Institutions including Banks, Building Societies, Investment Management Companies, Insurance Companies and Stockbrokers.
And under a discussion of assets on the AIG site we find the following pitch:
A company’s assets are vital to its operations. And protecting those assets is essential to the well being of a business. Assets can be tangible and intangible and can include a company’s corporate reputation, as well as physical assets such as property or goods. We offer standard or customised programmes on a domestic or global scale as well as a wide range of products covering more demanding and specialist risks.
Protection of assets!! Protection for corporate reputation!! Protection from the activities of regulators!! AIG can save itself (and us).
Up until now little beside blind greed and gross incompetence have been offered to explain AIG’s behavior. Here is an alternative hypothesis: Someone inside AIG decided that the best way to stimulate the market for its financial insurance products was to come up with an example (AIG’s own failure) that would scare the daylights out of even the most confident of finance people, pushing them right into the arms of AIG’s financial insurance sales force. Insanely diabolical, wouldn’t you say?
And if this hypothesis is incorrect, I have another: AIG is a corporate comic genius.
P.S. Here’s five bucks. Feel free to buy yourself half a dozen shares of AIG.