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Ninjas at AIG Hearing

At the AIG hearing underway on the Hill before the House oversight committee, New York State insurance regulator Eric Dinallo referred to the "NINJAs" of the current financial crisis, the slang term given by shady lenders to people who should never have gotten subprime -- or any kind of -- mortgages.

Somewhat roughly, NINJA stands for: "No Income, No Job [or] Assets."

The juicy stuff at this hearing should be coming up after lunch. That's when former AIG executives -- sans Hank Greenberg -- testify.

Scheduled are: former chief executives Robert B. Willumstad and Martin J. Sullivan.

Rep. Tom Davis (R-Va.) just asked both panelists -- Dinallo and Lynn E. Turner, former chief accountant, Securities and Exchange Commission: "Should anyone go to jail for this?"

"I don't think you send people to jail for making bad business decisions," Turner said. "But if someone knew there were problems at the company and they failed to comply with security laws ... then, yes, I think a little time behind bars would be good for them."

On today's market news, after shooting out of the gates at opening today, the markets have fluctuated, but mildly for a change, in morning trading.

The Dow has inched upward and down following the Federal Reserve's announcement this morning that it will buy massive amounts of corporate debt.

As of about 11:55 a.m., the Dow was down about .17 percent, about 60 points under the 10,000-point psychological barrier.

The S&P 500 was down about the same and the Nasdaq was down about .3 percent.

-- Frank Ahrens

By Frank Ahrens  |  October 7, 2008; 11:57 AM ET
Categories:  The Ticker  
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Next: Former AIG Chief Blames Mark-to-Market

Comments

Of course, as far as the AIG is concerned, it is business (almost) as usual. Their borrowed capital simply came from the US taxpayer rather than from its usual sources, and had somewhat higher interest payments than usual.

Those who managed to "save" the companay clearly earned their bonuses.

Posted by: Anonymous | October 7, 1908 3:13 PM | Report abuse

My question is what role did the rating agencies play? It appears that adverse risk was not considered when looking at these companies balance sheet.

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Posted by: Anonymous | October 7, 1908 3:18 PM | Report abuse

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