AIG's Small London Office May Have Lost $500B

ABC News ^ | March 10, 2009 | Jay Taylor, Lauren Pearle and Tina Babarovic

[CutePuppy]

Feds, Brits Probe AIG's London Office on $500B Losses

Ground zero for AIG's spectacular implosion, which has soaked up more federal bailout money than any other entity, appears to have been a small London branch office that may have lost nearly half a trillion dollars in bad deals.

The disastrous deals were built up in a decade and, when the crisis hit, the man who ran the unit for the last eight years retired after making $280 million for himself and leaving with a $1 million-a-month consulting contract.

The struggling New York-based insurance giant has avoided collapse with the massive infusion of $160 billion in taxpayer money. The U.S. government has agreed to prop up AIG because it fears that AIG has such extensive financial involvement around the world that its failure would be far more costly.

Britain's serious fraud office and U.S. regulators are combing through the records of AIG's Financial Products Group, formerly located on the fifth floor of an office building in London's Mayfair section.

The unit's small group of traders risked nearly half a trillion dollars to insure U.S. mortgages and other debt using complex financial products called credit default swaps, according to recent congressional testimony.

"AIG Financial Products was the core, the hottest point of the global financial crisis," freelance investigative reporter Peter Koenig told "Good Morning America" today. "It was the epicenter."

The group's traders "found a crack in the system that was unregulated," Koenig told "GMA."

Joseph Cassano, an American who ran the group for eight years, declined through his lawyer to talk with ABC News. But ABC News obtained a tape of Cassano from August 2007 telling investors just how confident he was.

.....

[CutePuppy]

Joe Cassano at AIGFP London office thought he had invented a money printing press in the form of CDSs...

[dennisw]

Joe Cassano at AIGFP London office thought he had invented a money printing press in the form of CDSs...

His compensation should be taken and he should be tossed in prison. He made $28,ooo,ooo in his best year

[DB]

Joe Cassano, at a minimum, should be stripped of every asset he has or has passed to his family.

[dennisw]

For years, the system worked fine for Cassano and, during his eight-year reign as head of the Financial Products Group, Cassano pocketed $280 million in salary and bonus. But about one year after Cassano boasted that he wasn't worried about losing a single dollar, AIG began bleeding billions.

[tcrlaf]

bookmark

[tcrlaf]

WELL, DUH!!!
Of COURSE he is a DEMOCRAT!!!!!!
And a Close friend of one SENATOR CHRIS DODD!!
WHO’D A THUNK IT???!!!!!

Cassano, Joseph
WESTPORT, CT
06880 AIG Financial Products Corp/Fincial $2,500 07/24/2008 P OBAMA VICTORY FUND - Democrat

Cassano, Joseph
WESTPORT, CT
06880 AIG Financial Products Corp/Fincial $2,300 01/10/2008 P OBAMA FOR AMERICA - Democrat
CASSANO, JOSEPH
WESTPORT, CT
06880 AIG/PRESIDENT $2,000 03/16/2007 P FRIENDS OF MAX BAUCUS - Democrat

Cassano, Joseph
WESTPORT, CT
06880 AIG Financial $2,100 11/22/2006 P CHRIS DODD FOR PRESIDENT INC - Democrat

CASSANO, JOSEPH
WESTPORT, CT 06880 AIG FINANCIAL/PRESIDENT & CEO $2,100 FRIENDS OF CHRIS DODD - DEMOCRAT P 11/22/2006

CASSANO, JOSEPH
WESTPORT, CT 06880 AIG FINANCIAL PRODUCTS $718 FRIENDS OF CHRIS DODD 2004 - DEMOCRAT P 04/28/2004

CASSANO, JOSEPH
WESTPORT, CT 06880 AIG FINANCIAL PRODUCTS $1,200 FRIENDS OF CHRIS DODD 2004 - DEMOCRAT P 04/18/2004

[PGalt]

The supremacy of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy; it means that a small number of financially “powerful” states stand out among all the rest. The extent to which this process is going on may be judged from the statistics on emissions, i.e., the issue of all kinds of securities. - Vladimir Ilyich Lenin

We the people, our children, our grandchildren are being economically $ubjugated by our overlord$ and master$. We have become economic pawn$/peon$/involuntary $ervant$.

[Darkwolf377]

"It may have started here, but it's an American company," Sugar said. "It just happened to be their place where plots were threaded." Sugar said that British Prime Minister Gordon Brown -- a "good friend of mine," he said -- "secretly blames the American businesses, banks that Europe looks up to." Sugar described the American fiscal atmosphere before the crisis as "over enthusiasms in business, greed. You maxed out over there, as you say."

It's pretty funny how quickly some Brits, who are so quick to brag about any connection, however tenuous, to any good thing on the planet, are even quicker at distancing themselves from any part in a disaster.

What's that about failure being an orphan?

[ScaniaBoy]

Good post - but is ABC really in the business of NEWS???

This story about Joe Cassano and the London office of the AIG was published in the Daily Telegraph months ago. (Yes, I think it was our good old friend Ambrose Evans-Pritchard who was on the ball again.)

Anyway, better late than never...

:)

[CutePuppy]

... at a minimum...

[CutePuppy]

but is ABC really in the business of NEWS???

No, but even a blind squirrel finds a nut and manages to keep it, now and then.

[ScaniaBoy]

Architects of AIG collapse were in London (Daily Mail 21 September 2008)

AIG trail leads to London 'casino' (Daily Telegraph 18 Oct 2008 - and, no, it wasn't A E-P)

[ScaniaBoy]

No, but even a blind squirrel finds a nut and manages to keep it, now and then.

LOL! (Hope it sees them over the cold winter.)

[CutePuppy]

Yes, the story is not new, but the “interest” in Cassano, at least in The City, seems to be getting hotter. As you said, better late than never.

Not surprisingly, both publication are British. And the story, both about the principals and the instruments (CDS), deserves to be more widely known and better understood in US.

Ambrose did maintain in his blog that the crisis “originated” in UK, which most people - unfamiliar with the story - would find shocking and probably simply dismiss him as ignorant.

[ScaniaBoy]

Ambrose did maintain in his blog that the crisis “originated” in UK, which most people - unfamiliar with the story - would find shocking and probably simply dismiss him as ignorant.

They usually do that, and he now goes under the name "Armageddon" Evans-Pritchard. The problem is, when it comes to the financial crisis - he has been right and he has been early!

[Right Wing Assault]

$718 FRIENDS OF CHRIS DODD 2004

Dear Joe, thanks for your recent contributions to our Dodd campaign. Would you please consider donating $718 to help us out?

[agere_contra]

Cassano: an American citizen working for an American company dealing with financial objects based on American mortgages.

And every CDO sold is legally rolled back to the seller if the credit for the mortgages was obtained fraudulently. Which an astonishing proportion of them were. So the America Government which backstopped AIG is legally required to repay the buyers every penny.

America, America, America all the way. But oh no, AIG sold through an office in Britain. So its a British problem?

[FreedomPoster]

I did the same thing with Madoff. Same sort of list, only much longer.

[Darkwolf377]

America, America, America all the way. But oh no, AIG sold through an office in Britain. So its a British problem?

I didn't say it was a British problem. But you can bet if AIG were a success we'd be hearding about what a British success story it was, and how The Yanks couldn't do such a thing in the States.

I guess the point is that America rules the world, and all other countries have no accountability for the financial institutions allowed to operate on their shores, they're just robots who have no say in that, and just nod and say "We hear and obey" to the US.

I just wish they'd admit it, not just when it's conventient for their poor little egos.

[mewzilla]

Bump for your list :)