When Shit Hits The Fan

AIG loss increases to $5bn

AIG loss increases to $5bn

By David Wighton, Aline van Duyn and Stacy-Marie Ishmael in New York

Published: February 11 2008 16:18 | Last updated: February 11 2008 19:05

American International Group, the insurance company, sent fresh tremors through the markets on Monday when it increased its estimates of losses in October and November from insuring mortgage-related instruments from about $1bn to nearly $5bn.

The announcement came as a number of companies are preparing to release audited accounts for 2007. Auditors have been trying to encourage a common approach to valuation amid predictions this will shed new and harsh light on the full scale of the financial damage caused by the subprime crisis.

AIG produced the revised figures after its auditors, PwC, concluded there was a “material weakness” in the way it valued its exposure. AIG, the world’s biggest insurance company by assets, saw its shares tumble 11 per cent, wiping $14bn off its market value.

Measures of credit risk in both the US and Europe reached new record levels indicating widespread investor risk aversion. This followed persistent pressure on the markets last week amid fears about corporate and commercial property debt defaults.

Shares in European insurance companies fell heavily on the news, though observers said that most did not have such exposure to US credit markets and used different accounting policies.

AIG’s move came after Peer Steinbrück, Germany’s finance minister, warned at the weekend that losses on securities linked to US subprime mortgages could reach $400bn.

Some of those losses will be borne by companies such as AIG which have provided insurance for investors in collateralised debt obligations, complex instruments composed of mortgage-backed bonds. AIG has written $78bn of credit default swaps on CDOs, which protect the purchaser from a CDO’s failure to pay.

The primary providers of these hedges are bond insurers such as MBIA and Ambac, whose ability to pay claims is now the subject of growing concern in global financial markets. These companies have written about $125bn of protection on so-called “senior tranches” of CDOs, according to data from Standard & Poor’s.

In December, AIG told investors that it estimated valuation losses on its credit default swaps for October and November at just over $1bn. But this was after an “adjustment” based on the assumption that the risk of default implied by CDO bond prices was higher than should be reflected in the value of the insurance. This adjustment amounted to $3.64bn in November alone.

But AIG has now scrapped the adjustment because difficult market conditions mean it cannot “reliably quantify” the figure.

Catherine Seifert, analyst at S&P, said the news was “very troubling” and AIG’s management would “have an extremely difficult time regaining investor confidence”.

Copyright The Financial Times Limited 2008

US Electshow

I found this article particularly brilliant. I'm a big fan of the Independent eitherway, but this one..hehehehe

Mark Steel: Change. Hope. America. Vote for Bob the Builder...

Fire Isaiah!

Nothing more to add!

P.S. Per que Company?? Es increible! Debem parlar quan jo veniré en Los Angeles.

Poker is the new Duke Nukem World of Warcraft

Poker is actually a pretty interesting game. The foundations of Game Theory are laid on poker, or let's say Morgenstern and Von Neumann used Poker for their first model for a game. Actually, I should be really into Poker, because it involves some of the most interesting topics in maths, probability theory, game theory and also a bit Markov Chains. It's not just luck or gamble, it's actually pretty scientific. However, to me Poker is just the new Duke Nukem or World of Warcraft. You see, back in the days, when I used to go to my school's computer lab, I saw all those nerdy people playing their ego shooters over LAN and whatever else. They were like, well, how can I say? It was just plain weird and disgusting to watch. They were like zombies. Nowadays, you see those same people grown up playing Poker. It's just nerdy! Nowadays, you see every baker(we use baker in Persian, nothing against bakers) plays Poker, everyone talks about blinds and whatever else, everyone has a Poker round with friends, and you watch these people and you feel back in your old computer lab with the nerds playing their shooters or strategy games.
I believe that for Duke Nukem, you needed to have some type of science too, and World of Warcraft was definetly scientific with strategy and such, but effing hell, Poker is just such a greasy, nerdy, rubbish thing these days, it's just unbelievable.
I personally try to study Poker for my own reasons, to try to apply game theory, but I just can't get over playing once in my life at a table or whatever else. It's just...ugggh..

The photo starting my career in photography

castroni, originally uploaded by Jordi Vendetta.

I still can't believe that ANYONE likes a photo of mine...so..
here it is...this photo is actually among the favourites of a person who can make photos and some online-rome-map-groupwhatever wants to use this photo..or considers using it or whatever.
so..thank you for believing that I can make photos..we all hit the bullseye once!

check out Schmap and The guy who likes my photo

Jay-Zeezee's American Gangstered

I neither liked the American Gangster movie or the album too much. Movie was simply soso, somehow not mine, although good actors and everything, but I didn't buy Denzel being Franck Lucas. The Jay-Z album was lyrically great, but you really felt that the guy worked for around 3 weeks and not more on the album.
But here's the deal..he realesed an a-capella album too, something he did with the Black Album too which led to the Brown Album, the Grey Album etc.
Now, this time, people have been flipping. There's the Cookin Soul remix with Elvis, over to American Godfather with parts from the Godfather movie, Daft Gangster, Real Live Gangster...damn!!
Eitherway, more or less are remixes are here linked and ready for download.
I personally liked the K-Def(great old school producer for Lords of The Underground etc.) and the Shuko&Gunner Marvin Gaye meets Jay-Z versions best. Daft Gangster was alright, Cookin Soul(The Elvis version) pretty good, The American Godfather interesting in concept but those two simply outstanding.

Kevin Nottingham's collection of American Gangster remixes

Estimat Frank

I don't know where to start, I don't know where to end. I always had faith in you, I always believed in you, I always thought that you will cut it in the end and all of the stuff said about you, regarding tactical inflexibility and whatever else was just rubbish.
I knew and expected you to be better, the best possible coach this team can have and your level of tactical knowledge good enough.
So please tell me, how could you blow it that bad last night?
Ok, you gambled on Ronaldinho's pride. Well, the guy has no pride, but either way, you gambled. But why didn't you take him off once you should have realized that he is not working?
Henry was not fully fit, fair enough, you didn't play him. But why didn't you bring in Gudjohnsen as an example to help out Eto'o in attack, to hold the ball for him, to play in his path, to do something apart of letting him die upfront alone against Cannavarro and Pepe? Why didn't you react to the fact that Yaya, who btw. was one of few players outstanding and playing like a man, being pressured by Van Nistelrooy and Robinho, to the man-to-man defense of Baptista against Xavi or anything else?
Why didn't you try to solve the problems but instead of that brought in Giovani, who wasn't the cure of the problem?
Why Frank? What did you try to prove with playing Ronaldinho for 90 minutes against Ramos, knowing that he is lost? Why didn't you tell him to switch sides with Iniesta, to move at all, to do something, anything? Why didn't you react??
You let me down, you let us down, you went from Frank White to Frank Elsner.
If you have enough and want to retire then do it, but you don't need to blow a game like that, because in the end, you took the decisions of that game and you blew it, as sorry as I am to say it.
I'm not over this defeat and I won't be for some time. Yesterday you officially declared that an era was over.