AIG - Why doesn't an insurance company own insurance?
We have to pay PMI if we clutch a risk
Even companies have to pay dismissal insurance.
Answers:
Ahhh, the Emporer isn't wearing any clothes.
Insurance compaines are supposed to be investing
in ultra-conservative investments with the money
beneath their control in order to foot out on claims.
In AIG's case, the company got exceptionally greedy
by taking risks surrounded by what is known as the deriviative
market, a open market created to cover a risk on sub prime
mortgages that should never have been taken.
As long as sub prime loans did not non-attendance, there was
no risk to AIG as the company collected massive
premiums, the proverbial free lunch.
Once the sub prime mortgage bazaar was exposed for
the sham it is, as a result of Wall Street greed pushing
bankers to take home loans to anyone who could fog a
mirror, AIG all of a sudden had to produce good on paying
for bad loans for which they could not cover.
Now the Federal gov't have kicked the printing presses
into super-high gear, creating unprecedented amounts
of new debt. Guess who is going to pay the piper on
that?
In a sense, since the gov't bailed them out, that sounds close to insurance??
Related Questions:
Even companies have to pay dismissal insurance.
Answers:
Ahhh, the Emporer isn't wearing any clothes.
Insurance compaines are supposed to be investing
in ultra-conservative investments with the money
beneath their control in order to foot out on claims.
In AIG's case, the company got exceptionally greedy
by taking risks surrounded by what is known as the deriviative
market, a open market created to cover a risk on sub prime
mortgages that should never have been taken.
As long as sub prime loans did not non-attendance, there was
no risk to AIG as the company collected massive
premiums, the proverbial free lunch.
Once the sub prime mortgage bazaar was exposed for
the sham it is, as a result of Wall Street greed pushing
bankers to take home loans to anyone who could fog a
mirror, AIG all of a sudden had to produce good on paying
for bad loans for which they could not cover.
Now the Federal gov't have kicked the printing presses
into super-high gear, creating unprecedented amounts
of new debt. Guess who is going to pay the piper on
that?
In a sense, since the gov't bailed them out, that sounds close to insurance??
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