Understanding the irony in AIG demise

x-man writes:
AIG was founded in China in the 1900s, then kicked out. In the early 90s, AIG wanted back in to China and China wanted to join the WTO. Greenspan make something like 35 trips to China negotiating the deal. China wanted the customary 50 percent ownership of AIG as a foreign company, but they had to give up all ownership to get into the WTO. Now AIG is the only 100 foreign-owned company operating in China. And the largest.

This is where it gets bad.


Basically, the Chinese are savers, so AIG captured almost all of China's private money, setting up a pension fund for the Chinese in the late 90s. They're like the Social Security system. AIG also insures China's own banking investments. When AIG faltered last fall, it almost brought down the Hong Kong Exchange.

We immediately got our marching orders from China on the AIG bailouts.


It amounts to the US paying Chinese pensions, with US pensioners savings.
x-man | 02.24.09 - 12:41 am |