Why is it not criminal ??

[kentuck]

If I am the CEO of an insurance company, I would not insure more than I would be able to back up. That would be common sense.

But the "talented" people at AIG told all these banks that they could back up all the securities that they bought in bundles, as the folks on Wall Street got rich with their schemes. Many, many people made tens of millions of dollars in bonuses and salaries by selling these mortgages in bundles all around the world.

And the people at AIG knew they did not have the money to backup these "securities". Yet, like mad men, they continued to sell and sell and sell. Tell me why this is not criminal.

[Taverner]

1. Well the definition of "having the cash to back things up" is negotiable

Lets just say they put those funds into stocks - then all of that depends on the market

Creative financing, as it is called...

[kentuck]

3. Yes, it was leveraged.

at 30:1 we are told. But it must have been leveraged even higher than that?

[HiFructosePronSyrup]

2. If I take out a small business grant...

to open up a business in a small town, use the money to give myself a bonus, and the business winds up bankrupt because it doesn't have any capital, I'd be arrested for embezzlement.

Why embezzlement doesn't apply to AIG, I haven't a clue.

[Egalitariat]

4. The Credit Default Swaps were unregulated. Therefore nothing was really

against the law. That's why Warren Buffett called them financial weapons of mass destruction and got out of the CDS business long before it imploded.

[Jack Rabbit]

5. That's one of the points to make here

How can you break the law after the law has been repealed?