14-10-2008, 07:02 PM
Poor Hank wasn't feeling well.......
http://www.property-casualty.com/2008/10....html#more
AIG Agents »
Greenberg Missed The Fun On Capitol Hill!
![[Image: Greenberg--Lascaro.jpg]](http://www.property-casualty.com/Greenberg--Lascaro.jpg)
Hank Greenberg is known for having the constitution of an ox, thus it was both a surprise and a huge disappointment that he failed to show up on Capitol Hill this week to testify at a hearing on how AIG got into so much trouble that it needed an $85 billion government bailout to survive.
Mr. Greenberg, AIG's longtime CEO before leaving in 2005--he says he "retired," while others insist he was forced out after the company was rocked by charges that it cooked the books with bogus finite reinsurance transactions--begged off his appearance before the House Oversight and Government Reform Committee.
“Regrettably, Mr. Greenberg has told the committee that he is too ill to appear today to answer questions,” said Rep. Henry Waxman, D-Calif., chair of the committee.
That's a real shame, because I had my popcorn all ready and couldn't wait to settle in front of the TV to watch Hank tell everyone how AIG went to hell in a handbasket after he left, live on C-Span.
Sure, Mr. Greenberg had plenty to say in a written statement to the committee--mostly serving to distance him from the problems that sunk the firm.
But he didn't have to respond to any questions, and was spared the barbs and wrath of Rep. Waxman, who noted that while Mr. Greenberg "blames" former CEOs Martin Sullivan and Robert Willumstad for "the downfall of AIG, many others think it is Mr. Greenberg who sowed the seeds that led to AIG’s failure.” Exploring the truth of the matter was left for another day.
Without knowing what's ailing Mr. Greenberg, or how serious his illness was, I was not really surprised he didn't show.
The picture on our Oct. 13 cover has Mr. Sullivan and Mr. Willumstad standing before the committee, with hands raised, being sworn in. I can't see Hank up there completing the trio.
After all, Mr. Greenberg never was one to be just part of the pack. Even at industry conferences, I can't recall him delivering anything but the keynote address, while other, lesser industry players were reduced to joint panel discussions.
Given the blame he laid at the feet of both his predecessors, I also imagine he would not be comfortable sitting next to them, let alone have to endure a congressional grilling. Why risk guilt by association with such characters, who he said tossed risk management concerns out the window in the short-sighted pursuit of higher profits.
Mr. Greenberg--now chairman and CEO of C.V. Starr & Company--instead got to take his shots unchallenged, via his written statement.
As reported by our own Washington Bureau Chief Dave Postal, Mr. Greenberg said AIG’s financial products unit “reportedly wrote as many credit default swaps on collateralized debt obligations in the nine months following my departure as it had written in the entire previous seven years combined.”
He added that unlike what had occurred during his tenure, “the majority" of the credit default swaps written by AIG's Financial Products unit in the nine months after he "retired" were reportedly exposed to subprime mortgages. "By contrast, only a handful of the CDS written over the entire prior seven years had any subprime exposure at all.”
He said AIG’s problems occurred because the “risk controls my team and I put into place were weakened after my retirement.”
Mr. Greenberg took pot shots at the bailout deal as well, arguing that to repay the federal loan, “AIG will have no choice but to engage in a fire sale of profitable assets”--a point vigorously disputed by the company's new CEO, Ed Liddy, in an earlier call to analysts.
Mr. Greenberg also argued that giving you and I and all the other taxpayers who coughed up the billions in bailout dough a 79.9 percent ownership interest in return for our loan was foolish on AIG's part.
“AIG has more than $1 trillion in assets, including key AIG assets that already act as security for the $85 billion loan facility,” he said. “It was not necessary to wipe out virtually all of the shareholder value held by AIG’s millions of shareholders, including tens of thousands of employees and many more pensioners and other Americans on fixed incomes.”
Indeed, he suggested, it would have been better for AIG to just have bitten the bullet and gone Chapter 11. “Those millions of Americans could have fared better if AIG had filed for bankruptcy protection, since they would have at least have had the chance of recouping value on their investments in AIG over the longer term,” he said.
Will Congress get another shot at "grilliing" Mr. Greenberg about all this? I tend to doubt it. Attention spans in Congress are notoriously short. Already, the next crisis is upon us, and AIG's woes are quickly becoming a distant memory in Washington.
That is, unless asset sales don't go as smoothly as planned, and AIG has trouble repaying the loan. Or, even worse, if AIG needs more than $85 billion to keep going. Now that Uncle Sam is in for a penny, he's in for every single pound, right?
Stay tuned!
Notice they don't wander far from home
"Mr. Greenberg--now chairman and CEO of C.V. Starr & Company"
http://www.property-casualty.com/2008/10....html#more
AIG Agents »
Greenberg Missed The Fun On Capitol Hill!
Hank Greenberg is known for having the constitution of an ox, thus it was both a surprise and a huge disappointment that he failed to show up on Capitol Hill this week to testify at a hearing on how AIG got into so much trouble that it needed an $85 billion government bailout to survive.
Mr. Greenberg, AIG's longtime CEO before leaving in 2005--he says he "retired," while others insist he was forced out after the company was rocked by charges that it cooked the books with bogus finite reinsurance transactions--begged off his appearance before the House Oversight and Government Reform Committee.
“Regrettably, Mr. Greenberg has told the committee that he is too ill to appear today to answer questions,” said Rep. Henry Waxman, D-Calif., chair of the committee.
That's a real shame, because I had my popcorn all ready and couldn't wait to settle in front of the TV to watch Hank tell everyone how AIG went to hell in a handbasket after he left, live on C-Span.
Sure, Mr. Greenberg had plenty to say in a written statement to the committee--mostly serving to distance him from the problems that sunk the firm.
But he didn't have to respond to any questions, and was spared the barbs and wrath of Rep. Waxman, who noted that while Mr. Greenberg "blames" former CEOs Martin Sullivan and Robert Willumstad for "the downfall of AIG, many others think it is Mr. Greenberg who sowed the seeds that led to AIG’s failure.” Exploring the truth of the matter was left for another day.
Without knowing what's ailing Mr. Greenberg, or how serious his illness was, I was not really surprised he didn't show.
The picture on our Oct. 13 cover has Mr. Sullivan and Mr. Willumstad standing before the committee, with hands raised, being sworn in. I can't see Hank up there completing the trio.
After all, Mr. Greenberg never was one to be just part of the pack. Even at industry conferences, I can't recall him delivering anything but the keynote address, while other, lesser industry players were reduced to joint panel discussions.
Given the blame he laid at the feet of both his predecessors, I also imagine he would not be comfortable sitting next to them, let alone have to endure a congressional grilling. Why risk guilt by association with such characters, who he said tossed risk management concerns out the window in the short-sighted pursuit of higher profits.
Mr. Greenberg--now chairman and CEO of C.V. Starr & Company--instead got to take his shots unchallenged, via his written statement.
As reported by our own Washington Bureau Chief Dave Postal, Mr. Greenberg said AIG’s financial products unit “reportedly wrote as many credit default swaps on collateralized debt obligations in the nine months following my departure as it had written in the entire previous seven years combined.”
He added that unlike what had occurred during his tenure, “the majority" of the credit default swaps written by AIG's Financial Products unit in the nine months after he "retired" were reportedly exposed to subprime mortgages. "By contrast, only a handful of the CDS written over the entire prior seven years had any subprime exposure at all.”
He said AIG’s problems occurred because the “risk controls my team and I put into place were weakened after my retirement.”
Mr. Greenberg took pot shots at the bailout deal as well, arguing that to repay the federal loan, “AIG will have no choice but to engage in a fire sale of profitable assets”--a point vigorously disputed by the company's new CEO, Ed Liddy, in an earlier call to analysts.
Mr. Greenberg also argued that giving you and I and all the other taxpayers who coughed up the billions in bailout dough a 79.9 percent ownership interest in return for our loan was foolish on AIG's part.
“AIG has more than $1 trillion in assets, including key AIG assets that already act as security for the $85 billion loan facility,” he said. “It was not necessary to wipe out virtually all of the shareholder value held by AIG’s millions of shareholders, including tens of thousands of employees and many more pensioners and other Americans on fixed incomes.”
Indeed, he suggested, it would have been better for AIG to just have bitten the bullet and gone Chapter 11. “Those millions of Americans could have fared better if AIG had filed for bankruptcy protection, since they would have at least have had the chance of recouping value on their investments in AIG over the longer term,” he said.
Will Congress get another shot at "grilliing" Mr. Greenberg about all this? I tend to doubt it. Attention spans in Congress are notoriously short. Already, the next crisis is upon us, and AIG's woes are quickly becoming a distant memory in Washington.
That is, unless asset sales don't go as smoothly as planned, and AIG has trouble repaying the loan. Or, even worse, if AIG needs more than $85 billion to keep going. Now that Uncle Sam is in for a penny, he's in for every single pound, right?
Stay tuned!
Notice they don't wander far from home
"Mr. Greenberg--now chairman and CEO of C.V. Starr & Company"
"You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.â€
Buckminster Fuller
Buckminster Fuller