Rolling the dice on AIG The taxpayer-owned insurer, much derided for its blunders in the derivative

08/06/2009 • CNN

I posted an article yesterday "AIG Breakup Is Fee Bonanza" by the WSJ I think that might help explain what is going on. Now snippets from the story... Less than a year after it nearly brought down the financial system with a misguided derivatives bet, AIG is everyone's favorite lottery ticket. Shares in the troubled taxpayer-owned insurer have nearly doubled in the days leading up to Friday morning's scheduled release of second-quarter earnings. It is a flurry of speculative enthusiasm that boggles the mind. Even so, given the scope of AIG's problems -- it reported a $99 billion loss last year and survived last fall's market meltdown thanks only to $180 billion in federal support -- it's hard to square the rally with the company's grim outlook. "This is truly a phenomenon," Tabacco said. "I don't know what is going on, but it appears to be the new game in town."