The VF article actually notes that AIGFP initially wrote credit-default swaps on corporate debt and then the big investment banks buying the CDSs on corporate debt got AIGFP (and others) to apply the same models to consumer debt, then mortgage debt, then sub-prime mortgage debt. When someone at AIGFP finally got the balls to stand up to Cassano and explain the dangers to him, Cassano stopped writing CDSs. The investment banks got into the business instead to take up the slack.

The problem was that the investment banks squeezed concessions out of AIGFP that would require them to first put up collateral and then let the investment banks price the assets and collateral.

So when the inevitable happened and subprime went south, the investment banks were a) significantly more exposed to the latest and worst batch of subprime-mortgage securities because AIGFP had stopped writing CDSs in about 2005/2006; and b) had a mechanism for covering some of these loses by sticking it to AIGFP.

Once AIGFP was downgraded, AIGFP had to provide collateral and the investment banks could undervalue the collateral to force a default on the AIGFP CDSs.

AIGFP had significant exposure to subrime, but the real interesting thing is that they got snookered into having to not only backing up their own bets, but also - via their collateral requirements - the later even riskier bets made by the investment banks.

This really shows why the governemnt (through Paulson as treasury secretary and Giethner as NY Fed chief and later treasury secretary) backed the AIGFP CDSs at 100% face value. They hoped to keep the genie in the bottle by appearing to only give money to one firm instead of dozens and they could pin the blame on a small group of traders led by a Wall Street outsider.

All that said, AIGFP screwed up and sometimes you lose the farm. The traders complaining about being vilified for taking their bonuses also need to grow the hell up. Their argument that they didn't do anything wrong and maybe even did some things right could apply to any amployee anywhere. Auto workers at plants GM is closing may have done nothing wrong, did their jobs superbly, but they are still getting laid off. If your company or division goes belly up, you're SOL. Just because you work in finance doesn't mean that you aren't subject to the same treatment.

The same banks that played the CDO game know exactly how much these CDOs are worth. They're idiots, but they aren't that big of idiots. They know exactly how these CDOs were packaged and they know which ones are full of loans that will most likely go bad. They claim that "it's complicated" and "the market is broken" on the hope that the market will come back or the Fed or the government will buy up or gurantee these worthless assets.

More importantly, the whole point of an audit and capitalization requirements are to get an accurate estimate of your current position. Capitalization requirements are there specifically to make sure that you won't go belly up if a panic hits, not some random requirement that is only relevant during non-panic times. If you have to sell assets to cover your obligations, then the current market price is the only price that matters.

It wasn't clear, but it sounded like the author was saying that Apple is breaking new ground with A2DP functionality. I'm on my second Windows Mobile-based phone that has had A2DP. Also, the app that controls a phone from a bluetooth headset that the author wishes for (and implies that the vast mighty power of the app store can only solve) is a standard bluetoothe profile (AVRCP). Again, available on both my current phone and previous phone. I've also been using a 3rd party media player with DSP and an equalizer for almost 3 years with WM phones.

If Apple was a car company they would be saying, "iCar 3.0. Breaking new ground by including power steering and air conditioning. And that's not all, you have strong fabric straps that hold you in your seat in case of an accident! In the next update, we will include a cushion that opens up in front of you on impact once that technology meets our demanding specs."

Yes, slower acceleration will save mileage verus quicker acceleration - if you are the only car on the road.

If you choose to accelerate slowly onto the freeway you are a tremendous safety hazard. Merging into traffic at 50 mph when traffic is moving at 70 mph is like driving backwards at 20 mph and expecting others to get out of your way. (Do Priuses even have rear-view mirrors? If they do, their drivers certainly don't use them when getting into and blocking the carpool lane.)

Accelerating slowly and coasting to exit ramps or stop lights also causes congestion since people behind you are getting stuck at traffic lights and in freeway bottlenecks. So now you and everyone behind you get stop-and-go traffic which drops highway mileage to below city mileage.

And I second the request that hyper milers get out of the passing lane and the carpool lane!!!!

Gas mileage for gasoline-powered internal combustion engines tops out at 35 mpg or so for two simple reasons:

1. Gasoline only has a certain amount of energy in it

2. Minimum useability and safety standards require a minimum weight/size

A minimum weight and size means a minimum amount of force needed to accelerate, climb hills, and overcome friction. Combined with a maximum energy content of the fuel gives you a maximum mileage constraint.

The amount of energy in the fuel that can be used is pretty constant if you use a gasoline-powered internal combustion engine (ICE). ICEs are great at utilizing liquid fuels, but at the price of low thermal efficiencies (10-15%). You can increase mileage a bit by sizing the engine and transmission properly, but you're going to top out eventually, and it appears that top is at about 35 mpg.