2009年2月24日

AIG Countdown to Annihilation

Lawyers and law makers, pick you weapons. 

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AIG Countdown to Annihilation

Assuming rumors of AIG's Q4 results are correct -- $60-billion in losses -- we will have on our hands the largest loss in U.S. corporate history. That is, of course, impressive, but it is the downbound trajectory that has me thinking more. The insurance- company-for-the-uninsurable's losses are mounting rapidly, with a doubling period of a little less than a quarter. Assuming that rate holds constant over the next few quarters, here is what we have to look forward to:

aig-counter

The black hole known as AIG will be eating up a trillion dollars a quarter a year from now, and then all of U.S. GDP in the fourth quarter of 2010 (denoted by an "*"). It will then move on to absorb all of global GDP a quarter later (denoted by "**").

The good news: It puts an outer bound on our current problems. If we haven't settled the current crisis by December 2010 then AIG will simply absorb the world and that will be that.

I'm mostly kidding. I think.

[Update] Tyler at Zero Hedge points out this great AIG cartoon over at CR, so I have added it here as well.





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