Financial Python

Studies in Finance and Python

AIG Fuels Bank Profits

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Tyler Durden at Zero Hedge publishes a provocative post regarding bank profitability and AIG CDS payouts. In some ways, this should not be a surprise. As described in my previous Soros post, AIG was long lots of credit risk by selling protection to banks. Given how far credit has deteriorated, banks SHOULD be deeply in-the-money on those contracts. Indeed, these contracts are precisely why AIG has been bailed out multiple times by the government. So as these contracts get unwound, a significant amount of P&L should be flowing to the banks.

Nevertheless, Tyler always offers an interesting opinion, so have a look.

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Written by DK

March 30, 2009 at 10:56 pm

Posted in Finance

Tagged with , ,

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