AIG

I thought that it would take at least three months for AIG to get hit by CDO losses. I was wrong. AIG lost 12% today as it filed this form 8-k. Let's look at the numbers: AIG reported on it's losses on CDS insurance written on CDOs by AIG Financial Products Group. Here are the unhedged loss numbers:

September 30: $352 million
October 31: $899 million
November 30: $5,964 million

With hedges and "structural loss mitigants, such as triggers that accelerate amortization of the more senior CDO tranches" the November 30 loss falls to (only) $1.6 billion. Further digging reveals that AIG insured $62 billion in CDO's, and has written $505 billion overall.

I wonder how AIG hedged their CDS's? I'm still worried about their investment holdings for their insurance division.