Interestingly, this possibly huge story has connections to Alabama and my former employer, the University of Alabama at Birmingham (UAB). We will examine those connections in a bit, but first let's look at the meat and potatoes.
They are served up by Thomas Gober, a former Mississippi state insurance examiner who has tracked fraud in the industry for 23 years and served previously as a consultant to the FBI and the Department of Justice.
In a report by Newsweek's Michael Hirsh, Gober says he believes AIG's supposedly solvent insurance business might be at least as troubled as its reckless financial-products unit. Reports Hirsh:
Far from being "healthy," as state insurance regulators, ratings agencies and other experts have repeatedly described the insurance side, Gober calls it "a house of cards." Citing numerous documents he has obtained from state insurance regulators and obscure data buried in AIG's own 300-page annual reports, Gober argues that AIG's 71 interlocking domestic U.S. insurance subsidiaries are in hock to each other to an astonishing degree.
What is at the heart of this financial volcano that might erupt at any moment? Gober sums it up in one word: reinsurance.
What is reinsurance? It allows one insurance company to insure the liabilities of another so that the latter doesn't have to carry all of the risk on its books. Why could this be a problem for AIG? Hirsh explains:
Most major insurance companies use outside firms to reinsure, but the vast majority of AIG's reinsurance contracts are negotiated internally among its affiliates, Gober says, and these internal balance sheets don't add up. The annual report of one major AIG subsidiary, American Home Assurance, shows that it owes $25 billion to another AIG affiliate, National Union Fire, Gober maintains. But American has only $22 billion of total invested assets on its balance sheet, he says, and it has issued another $22 billion in guarantees to the other companies. "The American Home assets and liquidity raise serious questions about their ability to make good on their promise to National Union Fire," says Gober.
Gober has a vested interest in keeping up with such matters. He has a consulting business in Mississippi devoted to protecting policyholders. He doesn't like what he sees under the surface at AIG:
Gober says there are numerous other examples of "cooked books" between AIG subsidiaries. Based on the state insurance regulators' own reports detailing unanswered questions, the tally in losses could be hundreds of billions of dollars more than AIG is now acknowledging.
If Gober is right, things could get ugly. As Hirsh reports, perhaps things already are getting ugly:
One early sign of trouble came when Christian Milton, AIG's vice president of reinsurance from 1982 to 2005, was convicted last year in federal district court of conspiracy, securities fraud, mail fraud and making false statements to the Securities and Exchange Commission. (Milton was sentenced in January; his lawyers have indicated plans to appeal.)
Gober has brought his concerns to the attention of the House Financial Services Committee, chaired by Rep. Barney Frank (D-MA). What could it all mean?
If Gober is right, the implications are almost too awful to contemplate. Despite its troubles on Wall Street, AIG is still the largest insurance company in the United States, controlling both the largest life and health insurer and the second-largest property and casualty insurer. It has 30 million U.S. customers. AIG is also a major provider of guaranteed investment contracts and products that protect people in 401(k) plans, as well as being the leading commercial insurer in the U.S. It is one of the largest insurance companies in the world, with insurance and financial operations in more than 130 countries. These insurance businesses were once thought to be so solid that AIG was able to use the triple-A rating it was routinely awarded to start up its vast credit-default-swap business.
Tom Gober's history suggests that he knows what he's talking about. And that's where Alabama and UAB come into play. More on that coming up.
Yes, Legal Schnauzer the hunter who is an "Elf in a Dog Suit" (Schnauzers and all dogs are "light spirits," as you know) ...
AIG IS A/THE KEY FACTOR ...
CHINA, the leading US "Partner" FOR THE PAST .... hmmm, 60 years AND, most especially since the "elite partners" (DAVID ROCKEFELLER, HENRY KISSINGER, RICHARD NIXON, HANKY PANKY PAULSON, ET AL.) ALL got together with the BIG guy himself (Maurice Strong) and devised this illegal purchasing of fiat money with the same ... China, in other words, has purchased our "debt" by way of the same money as the Federal Reserve "Notes" (counterfeit Chinese money has purchased US counterfeit debt, in other words).
It is an interesting web of woe that the 'evildoers' have woven and all with the same kind of "wealth" (counterfeit!).
And, tragically, the US "consumer" swallows this nonsense 'hook-line-and-sinker.'
I had emailed to you THIS, already:
THE PUPPET SHOW OF THE CENTURY, PART ONE
Thus, when do WE THE BILLIONS decide to STOP and allow the FEW THOUSANDS with ONLY THEIR MILLIONS OF MONARCH SLAVES
We have decided having parasites is not good for our health!
Furthermore, now that China has officially "floated the Yuan" as a "world currency" ..
the writing is on the GREAT WALL OF CHINA, as they have also increased their GOLD reserves to BACK the NEW global currency/ies.
Chinese nationals were coming here in droves immediately after 9/11 AND with guaranteed incomes, social security numbers, NO taxes paid for a minimum of five (5) years ...
I can't help but wonder whether or not this was all planned in advance, a long, long time ago it appears.
China is exploding with far too many young males that have been purposely "farmed" out and America is just one of the places where the intention is not at all benevolent or else AIG would NOT be in the cat bird's seat looking mighty starved for more and there appears to be no such thing as being satiated by the poly-addicted beasts.
Mr. Gober seems like a reasonable man. I sure would love to have a chat with him. Thanks for sharing the article,
take care, Lorne
You can find Mr. Gober's contact information at this link from his Web site:
I have another post coming up about him today.
I found this site using [url=http://google.com]google.com[/url] And i want to thank you for your work. You have done really very good site. Great work, great site! Thank you!
Sorry for offtopic
Post a Comment