Dave Purdy sends this story from the New York Times, "A Question for A.I.G.: Where Did the Cash Go?" The insurance company has been burning through its $123 billion bailout loan from the Federal Reserve.
Regulators are now looking into whether AIG knew it was coming in for major losses months ago — losses that weren't apparent on the company's balance sheet. The Times reports:
For $59 billion of the $72 billion A.I.G. has used, the company has provided no breakdown. A block of it has been used for day-to-day operations, a broad category that raises eyebrows since the company has been tarnished by reports of expensive trips and bonuses for executives.
As Purdy points out, the article says much of the money appears to be backing AIG's credit default swaps. He also highlights this paragraph:
"We may be better off in the long run letting the losses be realized and letting the people who took the risk bear the loss," said Bill Bergman, senior equity analyst at the market research company Morningstar.