We’ve been watching the first panel of the AIG hearings this morning. It’s not getting much play on the cable news channels, but it’s been pretty entertaining and surprisingly informative. You can watch on CSpan’s website by clicking here.
Without a doubt, the best line of the session came from Congressman Gary Ackerman, a Democrat from New York. He actually uses three fun analogies to describe the AIG CDS products.
- “Most members of Congress didn’t know what CDS is. I want to make sure I understand it,” Ackerman said. “Two guys on a life raft. A storm blows up. There are sharks in the water and waves 10 feet high. First guy says, I’m scared, so the second guy sells him a policy. You’re selling something with nothing to back you up, no money in wallet, if everything goes right, you’re collecting a premium.”
- “It’s like snake oil salesman, and they don’t even have the oil in hte jar”.
- “There’s a great company called I can’t believe it’s not butter. This is insurance without being insurance, but if they called it “I can’t believe it’s not insurance” maybe nobody would buy it. How is this suddenly an industry?…How did we allow this to happen? You’re playing “I can’t believe we’re not regulators.” And we’re playing “we can’t believe we’re not oversight.”
We’ve given Ackerman a pretty hard time in the past over his support of the uptick rule. But this was pretty good stuff.