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    Michael Lewis' Piece on AIG

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    Michael Lewis' Piece on AIG

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    3K views10 pages

    Michael Lewis AIG

    Uploaded by

    marketfolly.com
    Michael Lewis' Piece on AIG

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 10
    STUDD CRIN Kctemm tie CULES Tole ICUe.cctt Almost a year after A.LG.’s COM CSIC MER ET ANRC Tos PROS BCR nanos ech DUEL ORNEUR ONO CU RUC Ric Gere a AY ICL RVDL RBA noe omc et tite traders of the A.I.G. Financial Products Pi eS UCL RCO have a villain, whose reign of terror over: CTT Re ri tcece ORI UU eReOL LeU a Ti ROMS CITA LEC Re COTE financial system to their knees ix months ago, Ire- ceived an odd phone call from a man named Jake DeSantis at A.1.G. Financial Prod- ucts—the infamous unit of the doomed in- surance company, staffed by expensively educated, highly paid traders, whose finan- cial ineptitude is widely suspected of costing the U.S. taxpayer $182.5 billion and count- ing, At the time A.LG. FP’s losses were re- ported, jt became known that a handful of traders in this curious unit had sold trillions exposure, He'd grown up in the Midwest, the son of schoolteachers, and discovered Wall Street asa scholarship student at MT. The previous seven years he'd spent run- ning A.LG. F-P’s profitable stock-market- related trades, He wasn’t looking for me to ‘write about him or about A.LG. EP. He just wanted to know why the public perception ‘of what had happened inside his unit, and the larger company, was so different from the private perception of the people inside it, who actually knew what had happened. ‘The idea that the employees of ALG. EP. had conspired to maximize their short-term ‘gains at the company’s longer-term expense, for instance, He and the other traders had bbeen required to defer about half oftheir pay for years, and intertwine their lg-term inter- ests with their firm’. The people who lost the most when A.LG. FP. went down were the employees of ALG. FP: DeSantis himself had just watched mote than half of what he'd ‘made over the previous nine years vanish. The incentive system at A.LG. EP, created in the mid-1990s, wasn' the shortierm-oriented racket that helped doom the Wall Street in- vvestment bank as we knew it. It was the very ‘omnipotent ruler—one of those bosses who

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