I met someone from AIG

This is not intended to be news, and I don't make any money on the stock market so I have no personal interest in this subject. I just encountered a person that spoke candidly about where they where at in a circle of friends. I doubt he intended it to be repeated, but thought it was weighty enough that I didn't want it to end with just me.

So friend of a friend of a friend this weekend while I was out for 4th of July festivities turned out to work for AIG. He introduced himself as working for a failed financial institution, but his friend refused to let him get away with it so lightly and insisted that he tell the whole story. He started there in September and is working in the infamous risk management group, now given his recent tenure I will assume that he was a late comer that had little to no impact on the eventual (one month later) collapse of the company; but what struck me was that he was previously employed as a mechanical engineer. It immediately jumped out to me given my business school requiring me to take a finance course that both jobs where basically just math, so learning new equations to a scientifically minded individual would be a fairly natural transition. The draw of the job was that he moved from a small boring stodgy old town to New York, and claims that the dating pool is much better. I tend to believe that this is true, and can see the appeal to someone under 30 and still single.

His insight into the company is was that given that his direct manager of the group that his is associated with has yet to directly communicate any form of strategy, or relay any info about their future path, or really do anything even remotely manager-like is an indictment of the whole management staff. His manager only arrived 1 month before the chap that is the focal point of this story did, and has yet to have a single strategy meeting with the group, much less send an email outlining what the company was going to do to pull itself up from the hard times that they got themselves into, and he theorizes that he never will. He suggests that given the amount of fuck off time he has, AIG won't be rising from the ashes. They are no longer the bankable name they once where, and are not doing anything to improve that status.

I am glad the bailout failed here are some better ideas

I do realize this is a little off topic for a personal technology focused blog, but I think the scope of the matter is broad enough to warrant some discussion, or at least some opinion. The companies that have been complicity playing on cheap credit extended to those that could not afford it and thriving off of the associated rapid appreciation of land that landed excessive amounts of cash in the hands of most everyone that glad handed the whole process along are due. The bell is tolling for the greedy and they are hoping that their ability to peddle fear will be effective enough to get congress to barrow money from each and every American to pay for their folly.

I am not going to say that semi-innocent people such home construction workers, and other associated trades that have lured too much of the population away from productive jobs to support this artificially over heated real estate boom aren't going to be put through hard times. I just don't believe that there is any chance of that money having a "trickle down effect". 700 billion is a lot of money, and it will likely vanish like water on sand. It will not help those struggling to stay in their home find a solution that allows them to gain equity and pay down the principle through partial loan forgiveness (say the value that the land has lost now that everyone is waking up to how inflate real estate has gotten), or any other innovative "help the people" initiatives out there.

For people that bought several houses speculatively there should be some consequence, but not necessarily loosing their primary homes (that are likely the collateral of several other homes). Letting the bank have the speculative properties and erasing the loans, (and the speculators are out all the costs that they have spent getting into those homes) would be another program that I could get behind. The banks could find themselves in the unlikely position of trying to rent houses, but there is demand out there in many markets. I realize this is pretty far out and completely unlikely to boot, but there are ways that we could minimize the damage overall, while not requiring a bailout. This would require actual hard work and true human/honest interactions, but the sting of being out $10-20k or more has to be far less then finding yourself out of home and filing for bankruptcy due to defaulting on several loans simultaneously. This would be so completely out of the character of banks and people in general, I cannot imagine a world where this happened but leasing loan forgiveness properties to property management companies that get to keep the profit between what they rent the land for and what they pay for it would drive efficiencies (property management companies are unlikely lease land they couldn't rent for a profit etc).