Too Much

There’s too much business news and too little time these days. Actually, just following AIG can be a full-time job. Since most of you hopefully still have full-time day jobs, it’s possible you missed some of the most recent AIG developments:

Democrats and Republicans raked former CEOs Martin Sullivan and Robert Willumstad over the coals during Congressional hearings into the $85 billion loan. The CEOs said the company got into trouble because there was just too little private capital available when it was needed. Neither believed he could have done anything differently to save AIG, other than the little he tried. Former CEO Sullivan said AIG actually did heed various market warnings and that as a result AIGFP stopped selling the risky products in 2006 — a little too late.

Congressional testimony indicated that AIG executives reacted either too little or not at all to several warnings about trouble in the London AIG Financial Products unit that sold too many products tied to the subprime market. The warnings included letters from their own accounting firm and from the federal government’s Office of Thrift Supervision saying too little attention was being paid to risk controls.

Management also paid too little attention to the accountant hired to oversee the AIGFP transactions and valuations who quit because he said AIGFP President Joseph Cassano blocked him from obtaining information he needed to do his job.

Politicians and the press got excited about the $400,000 price tag for an alleged AIG executive retreat at a posh resort, which turned out not to be a party for executives or even employees but a motivational meeting of top life producers, complete with golf, sauna and cocktails. Still, it was too much, too soon after the government bailout.

The man who built AIG into a company too big to fail, former AIG CEO and major stockholder Maurice “Hank” Greenberg, has been in the news a little too much for some. First, he maintained that he had offered to help before everything came crashing down but Sullivan and Willumstad were too small to listen. Then he said Sullivan was too willing to weaken risk controls that Greenberg had put in place. More recently, he warned that AIG, too, was likely to fail unless the government reworked the terms of the $85 billion loan. The current terms were too much.

As of Oct. 8, AIG had already used up $70.3 billion of the government’s money and on that day the New York Fed agreed to come up with another $37.8 billion investment to keep AIG operating. Turns out the $85 billion was too little.

Too little, too much, too soon, too big — the news is happening too fast. Those of us with day jobs, including the men and women who still work at AIG, are left to worry: is it also too late?

Topics AIG