March 19, 2009 (New York Post) -- The investors that own many of the derivative securities at the center of American International Group's collapse are among the world's and this country's biggest investors, sources told The Post.
People familiar with the matter said buyers of AIG Financial Products' derivatives, which consist mostly of collateralized debt obligations tied to mortgages, include Middle Eastern sovereign-wealth funds and the Chinese and Indian governments, which are also among the biggest holders of US Treasury securities.
Exactly how much AIG has in derivative exposure is subject to debate. While AIG's beleaguered CEO Ed Liddy told a House subcommittee yesterday that the insurer's exposure is around $1.6 trillion, others have dismissed that figure as not reflecting actual losses.
"[If] somebody's got $1.6 trillion in notional exposure, they could potentially be at great risk, but we just don't know," Campbell Harvey, finance professor at Duke University said. "It's really hard to tell, and it's very frustrating. We own this firm but we're not privy to the information."
Read The Entire Story