Time to laugh or cry? AIG, the company so stupid and greedy that it insured practically the entire subprime mortgage bond market against the possibility of default, without in any way, shape or form having the resources to pay up if the bill came due, reported a fourth quarter loss of $8.87 billion dollars.
Bloomberg passes along a statement from the CEO, Robert Benmosche.
"While we are not out of the woods by any stretch, these numbers represent a substantial improvement from just one year ago," Benmosche said today in a recorded message on AIG's Web site. "While a tremendous amount of work remains to be done, and there are no guarantees in life, we believe we are on our way to regaining our stature as one of the world's largest and most successful property-casualty insurance operations."
The Wall Street Journal echoed the positive spin: "The results were a significant improvement from the year-ago period... "
Yes, this is true, but only because AIG lost $62 billion a year ago -- the worst quarterly performance by any company, anywhere, in the history of capitalism. In fact, it is difficult to imagine what AIG could possibly have done not to show significant improvement compared to last year.
But I am even more taken aback by Benmosche's statement that "there are no guarantees in life." This seems like a remarkably inappropriate comment for an insurance company CEO to make. Isn't his entire business premised on the idea that if something bad happens, AIG <i>guarantees</i> to make it good? And isn't his company's sorry history proof that if you are a big enough financial institution, no matter how badly you fail, the government is <i>guaranteed</i> to come to the rescue?