In the case of AIG, the value of its derivative insurance coverage, in 2008-2009, was being determined on the basis of fictitious existing market value. Not on possible claims in the future, at the maturing of AIG company obligations, but at supposed current valuations.
That produced a condition that induced premature bankruptcy, in a panic venue; a rush to judgment when cool heads and hands ought to have been the hallmarks of expertise.
The AIG panic was evidenced by the rescuer’s paying of debts on the basis of 100 cents on the dollar to some bankers in this country and abroad.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)
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