July-September 2007: AIG’s Profit Falls Sharply

The profit of the insurance corporation AIG falls by 27 percent in the third quarter of 2007, to $3.09 billion. The decline is due to housing-related costs, including a $352 million fall in credit default swaps, which AIG sold to protect debt investors from losses. Despite the troubles, AIG says it is “highly unlikely” that it will be required to make payments on the derivatives. [Bloomberg, 9/16/2008]