AIG’s contribution to the world financial crisis may be bafflingly complex, but a single villain is emerging, writes Michael Lewis in Vanity Fair. Joseph Cassano was a "cartoon despot" who ran AIG's Financial Products division, now infamous for its credit-default swaps. Cassano, unfortunately, "didn’t fully understand all the calculations and (his) judgment was clouded by his insecurity." He "wanted to be one of Wall Street’s big shots," writes Lewis. "He wound up being its perfect customer."
Cassano's unit took on "the vast majority of the risk of all the subprime-mortgage bonds created in 2004 and 2005," with Cassano insisting all the while that housing prices could never tank. He could have undid much of the damage in 2006 but chose not to accept the costs of doing so. "Joe Cassano was the perfect man for these times—as responsible for a series of disastrous trades as a person in a big company can be. He discouraged the dissent of subordinates who understood them better than he did.”