What's a good book on AIG's collapse?
February 17, 2010 1:09 PM   Subscribe

I'm looking for a really good book that describes AIG's collapse, and the reasons for it. Do you have any recommendations? Alternatively, how can I educate myself on it, besides reading Wikipedia? Thanks in advance!
posted by monkeyman82 to Education (15 answers total) 1 user marked this as a favorite
Not limited to AIG, but Too Big To Fail by Andrew Ross Sorkin is supposed to be very good. It's sitting in my to-read pile.
posted by smackfu at 1:15 PM on February 17, 2010

I think it's still too early for a "really good" book to have been published yet. As far as I can tell, we're at the point where a number of journalistic works have come out, but it hasn't been long enough for anything book-length with real academic rigor to have made it to publication.

I'm more than happy to be corrected here--I want to read that book too!--but I think it will probably be at least another few months if not years before a definitive work is published.
posted by valkyryn at 1:19 PM on February 17, 2010

Seconding Too Big To Fail.
posted by Perplexity at 1:20 PM on February 17, 2010

Another place to look is at the Planet Money blog/podcast by NPR.

I've only listened to the ones that showed up on This American Life, so I don't know exactly which article to point you to at Planet Money to talk about AIG specifically, but these shows are written for the non-economist layman. It's pretty easy to understand what they're talking about.
posted by CathyG at 1:25 PM on February 17, 2010 [1 favorite]

No substitute for a good book but I've been keeping up with whats going on through Matt Taibbi's blog. Reading through the old posts and some of his Rolling Stone stuff should get you up to date.
posted by xqwzts at 1:26 PM on February 17, 2010

Let me just put in a recommendation against Too Big to Fail. It's an engrossing read, surely, but Sorkin has a little too much access to be considered wholly impartial IMO.
posted by jckll at 1:41 PM on February 17, 2010

Seconding the This American Life shows, esp the one titled "Bad Bank"
posted by melissasaurus at 1:48 PM on February 17, 2010

Mises Institute has great stuff.
posted by yoyoceramic at 1:52 PM on February 17, 2010

Too Big to Fail is good, but is very focused on detail and minutiae, such as recollected conversations between various senior executives and policy people. This may or may not be interesting to you.

It doesn't explain much about the mechanics behind AIG's interactions with banks or the government, beyond those conversations. For example, if you want to understand what a credit default swap is and how it is structured (arguably important to understanding AIG's fate) Too Big to Fail isn't for you.

The problem is, if you want to understand AIG's fate from the perspective of the financial instruments which did it in, you need a background in those instruments, which most, if not all, writers don't have.
posted by dfriedman at 2:00 PM on February 17, 2010

Not especially about AIG, but The Two Trillion Dollar Meltdown is a quick, enlightening read about the causes of the Great Recession generally. I especially appreciated that it was sufficiently undogmatic that I could recommend it to both conservative and liberal friends.
posted by Clambone at 2:04 PM on February 17, 2010

Came here to mention Too Big to Fail - it is very readable. AIG takes up a big part of the back end.
posted by laukf at 2:05 PM on February 17, 2010

Thirding the This American Life shows - they were really informative and easy to understand.
posted by LZel at 2:16 PM on February 17, 2010

There's also Bailout Nation.
posted by Arthur Dent at 2:30 PM on February 17, 2010

Lucy Komisar
posted by hortense at 3:44 PM on February 17, 2010

The reason for AIG's collapse is pretty simple. AIG is an insurance company. They wrote insurance for a lot of risky stuff. They did not collect enough premiums or hold enough cash to pay off the insurance policies when all of their policy holders tried to collect at once. AIG underestimated the risk of this happening.

You could do the same yourself. Just go to all of the people in your neighborhood and offer to insure their homes for $500 each. You will make a lot of money as long as no one's house burns down. If that happens, you will go broke.
posted by JackFlash at 4:20 PM on February 17, 2010

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