We all know the outcome now, but in the latter months of 2007 executives at AIG seemed to be only starting to catch wind of the problems that eventually led to the nationwide financial collapse the firm helped precipitate a year later. Were they just overly confident? Clueless? Or were they hiding the fact that they knew very well that the jig was up? The Washington Post has looked into the troubled company’s e-mails to see what some of the key players at AIG were telling each other as trouble began looming large. —KA
The Washington Post:
Whether any violations occurred, the e-mails show AIG executives laboring to understand the flaws in Financial Products’ once-vaunted mathematical models and debating what and how much to disclose to investors.
Publicly, [Joe] Cassano and other AIG executives—including [Elias] Habayeb—presented a unified front of confidence. That optimism was unremarkable at the time, when the Dow was pushing 14,000, AIG’s stock price remained relatively strong and most Americans had no inkling of the subprime calamity just around the corner.
Privately, however, executives found themselves in the financial equivalent of the fog of war, as one of the world’s most successful companies began its descent to the epicenter of last year’s financial collapse.