AIG became the risk nexus that itself was vulnerable to the rug being pulled out from under them by mark to market and FASB Rule 157. When coupled with the SEC’s elimination of the Uptick Rule, the collapse of asset values became a self-sustaining chain reaction downward.
BTW: the SEC still has not restored the Uptick Rule, and FASB is just this week reconsidering Rule 157. Each rule change was (again) only well-intentioned by learned committees of well-credentialed people, but each rule worked to make the collapse possible. And look at how reluctant each agency is to accepting that
Your mistake is to consider this all an intellectual exercise with no impact on the greater society
But billions were made and taken home. Joe Cassano made $280 million in 8 years
Stan O'Neal ruined Merrill Lynch and his reward was a $160 million severance package
My rule is cui bono
Those who made the most money are the ones I blame the most
They are not idiots and they knew the risk calculations in the derivatives were very fragile and based on phony assumptions. In some cases it was ever rising real estate prices
I would throw the largest profiteers in prison and strip them of ill gotten gain.
I have zero sympathy for pirates who crashed our financial system
Yes, they are evil, but was what they did provably illegal?