Oops, we lost another $4.36 billion

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Good morning. L.A. Land is an equal opportunity provider of opportunities to second guess. For the past couple of days, many of you have been second-guessing the borrower who owes roughly $400,000 and wants to pay it back at $1,600 a month.

So why don’t all you financial geniuses and giants pick on someone your own size, like American International Group? From Reuters via CNBC: ‘American International Group, the world’s largest insurer, disclosed that the value of some of its risky debt portfolio had plunged by $5.96 billion, not $1.6 billion as reported earlier. The disclosure cast doubt on AIG’s past contention that it didn’t face major problems stemming from the credit crisis that has slammed other financial institutions.’

If AIG is the world’s largest insurer, that certainly means the company is one of the world’s experts in risk management, right? And it appears they are lousy at it. We could have raffled off a ticket to one of their board meetings on the blog, and when the subject of exposure to risky debt came up, any one of you could have raised your hand and said, ‘It’s bigger than you think. Way bigger.’

Thoughts? Comments? E-mail story tips to peter.viles@latimes.com.