AIG Under Investigation for Fraud

Rogue executive in a rogue company.

Tainting the purity of Wall Street insiders most likely.

Looks like AIG might have to take a hit for the team.


Ex-AIG exec under probe by U.S. prosecutors
Wed Nov 26, 2008 1:35am EST

NEW YORK (Reuters) - Former American International Group Inc executive Joseph Cassano is under investigation by U.S. prosecutors for possibly misleading auditors and investors about subprime mortgage-related losses, according to a Bloomberg report citing people familiar with the probe.

The report said investigators are asking auditors at PricewaterhouseCoopers about memos they wrote last fall on how Cassano and other AIG executives valued contracts protecting $62 billion in mortgage-backed securities.

The U.S. government is also investigating AIG's reliance on valuations that have been questioned by auditors and banks, according to the report.

Cassano previously led AIG Financial Products, the source of billions of dollars of losses which led to the insurance company needing to be rescued by the U.S. government in a $85 billion deal in September.

In October, U.S. lawmakers criticized AIG for giving Cassano a $1 million-a-month consulting contract after he retired in March.

Having Trouble With This Market? Highest Volatility in a Century at Least

Can't seem to hold a position, make a decent return, keep from getting whipsawed, find a trend?

No wonder, because this is one of the most volatile markets in the past century.

Our opinion, for what it is worth, is that the volatility is being turbocharged by the injections of Fed liquidity into the Wall Street banks, who have few options for higher returns than Treasuries. So their trading desks are churning the markets to hammer the hedge funds and skin the small specs who are loss sensitive and unsophisticated in their use of leverage and hedging.

The financial sector needs to be reformed badly. The economy will not recover until real wages start advancing again so consumption and savings can resume. Look for the well-heeled elites to fight that every step of the way, and appeal to the worst in our character as part of a campaign to do it.

If you are not an experienced trader now is a good time to sit in cash and add some precious metals on weakness, and above all, learn to live within your means.

Russian Expert Says US Headed for Collapse

Are we going to allow the Russians to have the last laugh?

No way.

So get out there and buy some stocks, rubes, and help to fully fund our oligarchs so they do not fall behind the elite that divided up Russia's wealth after its collapse.

We cannot afford to have an oligarch gap.

If you are not sure what fraudulent stocks to buy, just put your money in the long bond, and the Treasury and Fed will manage the distribution for you.

UPI
Russian expert: U.S. headed for collapse
Nov. 24, 2008 at 7:58 PM

MOSCOW, Nov. 24 -- The United States is heading for collapse amid its financial crisis, a leading political analyst in Russia says.

Igor Panarin, a professor at the Diplomatic Academy of the Russian Ministry for Foreign Affairs, said in an interview with Izvestia, published Monday, that the U.S. economy is in dire straits, RIA Novosti reported.

"The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. This is a pyramid that can only collapse," he said.

Asked when the U.S. economy would collapse, Panarin said the process has already begun.

"It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving," he said. "Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world's financial regulator."

The Buck Slumps to Support as Stocks Rally Up to Resistance

The dollar showed weakness today as US equities ran the shorts on vaporous hopes of bailouts for the banks.

Notice though that Bucko has not broken any serious support levels so it is too soon to send flowers. So far this is a normal consolidation in a parabolic short squeeze and flight to safety.

We took profits on our long positions today, and went slightly net short when the SP 500 futures hit our intraday target of 866. This rally has a lot of air in it, but this is a light week, with the US markets closing for the Thanksgiving holiday on Thursday.

We are far from a recovery, and will likely go back down and test those lows again, but first things first, and we may see more rally in US stock indices up to the 62% retracement levels.