December 5, 2007: AIG Boss Says Housing Losses ‘Manageable’

Martin Sullivan, chief executive officer of insurance giant AIG, says writedowns the company has been forced to make on assets linked to the US housing market are “manageable.” “The effectiveness of our risk management efforts will show through in our results,” he adds, sending shares up more than 4 percent to $58.15. Joseph Cassano, head of the company unit that sells derivatives known as credit default swaps, says the value of such contracts declined by $1.1 billion in the first two months of the fourth quarter. [Bloomberg, 9/16/2008] Cassano’s statement is inaccurate, and AIG will later reveal the loss is close to $5 billion (see February 11, 2008).