“It Depends on What the Definition of ‘Is,’ Is”
Too much risk is just as bad [as too little]. Just ask the financial wizards at American International Group who ended up on the wrong side of tens of billions of dollars in financial contracts, almost bringing down the world’s biggest insurer.
–Andrew Ross Sorkin, “Taking a Chance on Risk, Again“; The NY Times (9/17/09)
Here’s a thought: when a rogue subsidiary blows a hole the size of Singapore’s economy — $175 billion, to be exact — in your company’s balance sheet, you’re way past “almost” bringing down the company.
You’re not “almost down.” You’re very down.
In fact, in the history of capitalism, it really doesn’t get much “downer” than that, at least for an individual company.
AIG exists today only because it received a $175 billion infusion (so far).
It got that money from the U.S. government — which means us, which means our kids — for exactly one reason: it owed it to so-called Too Big to Fail institutions like Goldman Sachs.