tag:blogger.com,1999:blog-5880610.post5258147103545980025..comments2024-01-13T18:57:18.243-05:00Comments on Information Processing: Money talksSteve Hsuhttp://www.blogger.com/profile/02428333897272913660noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-5880610.post-64879063221652374762010-02-04T21:51:18.666-05:002010-02-04T21:51:18.666-05:0060 billion dollars? You are upset about 60 billio...60 billion dollars? You are upset about 60 billion dollars? Are you serious?Xiaodinghttps://www.blogger.com/profile/00239287510764217450noreply@blogger.comtag:blogger.com,1999:blog-5880610.post-45747596766914180752010-02-01T19:19:24.349-05:002010-02-01T19:19:24.349-05:00rp - I love your questions, let me paraphrase: &qu...rp - I love your questions, let me paraphrase: "nice narrative LY, but do the numbers foot?"<br />I don't know, I would love to see someone disciplined try to work it out. It's easy for me to bloviate about generalities, but opening excel and collecting info on the net is beyond me for today. I hope the following helps:<br /><br />I don't think AIG's fall was "LondonYounghttps://www.blogger.com/profile/09677529514013996419noreply@blogger.comtag:blogger.com,1999:blog-5880610.post-37190434405578725612010-02-01T08:40:27.665-05:002010-02-01T08:40:27.665-05:00OK, pricing uncertainty adds another layer to the ...OK, pricing uncertainty adds another layer to the mix. But still missing something essential. How are all of the following true: pricing uncertainty leaving AIGFP obligations unclear, FP counterparties were fully collateralized even once the worst case pricing scenario becomes clear, and sudden bankruptcty of the overall AIG business with little warning? If they were paying the counterparties rphttps://www.blogger.com/profile/16186782639003121304noreply@blogger.comtag:blogger.com,1999:blog-5880610.post-30038108549723289502010-02-01T02:02:52.966-05:002010-02-01T02:02:52.966-05:00LY's long response means he wants to toss your...LY's long response means he wants to toss your salad Steve.Ian Smithhttps://www.blogger.com/profile/06837467954881003505noreply@blogger.comtag:blogger.com,1999:blog-5880610.post-24822241843138975142010-01-31T17:58:05.741-05:002010-01-31T17:58:05.741-05:00I will try to answer what I can:
Why did AIG seem...I will try to answer what I can:<br /><br />Why did AIG seem to melt down so suddenly in late 2008? As I've said, there was a binary debate over the value of these securities. Previously on Steve's blog, I have referenced this post: http://economicsofcontempt.blogspot.com/2009/06/aig-internal-memo-on-collateral-calls.html<br />Now, a bit of fine detail on collateral - as I've said,LondonYounghttps://www.blogger.com/profile/09677529514013996419noreply@blogger.comtag:blogger.com,1999:blog-5880610.post-60951351482275258932010-01-31T16:24:18.588-05:002010-01-31T16:24:18.588-05:00Yeah, this stuff is really interesting although I ...Yeah, this stuff is really interesting although I say again it seems like the stuff that is unclear isn't unclear because it's all that complex. Are journalists just not that good? The questions/inconsistencies seem obvious to highlight even if one doesn't understand them enough to explain them. Or are the scientist/finance people I talk (science background, finance learned on the rphttps://www.blogger.com/profile/16186782639003121304noreply@blogger.comtag:blogger.com,1999:blog-5880610.post-37672321777198982292010-01-31T16:01:14.069-05:002010-01-31T16:01:14.069-05:00RP: I hope LY posts some additional comments here ...RP: I hope LY posts some additional comments here that address the points you raise. <br /><br />Overall, his story hangs together but I also have some questions which, after more reflection, I'd like to pose. (I'm thinking about other stuff at the moment and would have to go back and re-think a lot of stuff from back in 2008 to recall how I saw it at the time, or even in light of Steve Hsuhttps://www.blogger.com/profile/02428333897272913660noreply@blogger.comtag:blogger.com,1999:blog-5880610.post-20500896783592530812010-01-31T15:33:20.460-05:002010-01-31T15:33:20.460-05:00Thanks for this - helpful to someone who's fol...Thanks for this - helpful to someone who's followed this with amateur interest, thanks. A few remaining oddities for me that keep me confused and support lingering doubt. On the one hand the RE price decline devastation flowed through structured products and into balance sheets over months as you say (I'd peg the clear start earlier, say July when the Bear hedge funds got hammered) whichrphttps://www.blogger.com/profile/16186782639003121304noreply@blogger.com