AIG - Thank God I Still Have a Job ...

Many friends have been worried about me, especially since I work for AIG. But thank God, I still have a job for now. What happened was nothing short of scary. Basically (and this is oversimplifying), AIG insured a lot of bad mortgages. They insured payment of a bond if there was a default. Well with the recent credit crisis, this all went down the tubes. Part of the reason is that AIG is as an insurer required to use "mark to market" accounting. What this means is illustrated with this analogy: Suppose you have a home that is worth $250,000, but no one will buy it, so it's market value becomes $0 because no one can or will buy your asset. So, if you were using "mark to market" accounting, you would have to list the value of your house as $ 0 not $ 250,000. So a bunch of AIG assets that had value had to be rescued because their mark to market value was going down rapidly.
What would have happened had AIG gone bankrupt was that they would have to sell all of their assets (including Property & Casualty Insurance) at a deep discount. So we would have been sold off. Actually, the part of the business where I work is over capitalized and last year made a profit of about $2 billion. We have more than we need to do business as a property casualty insurer. But fortunately for us we aren't going anywhere for a while because we are one of AIG's core assets. We're OK! Thank God!