Guido Gossip - Sue us, baby, we're broke.

Guido is in the very far Western part of the US. Today, at a party, he bumped into this personal injury attorney that he's known for years. 

Basically, this acquaintance told Guido that  the past year has not been kind to him financially. Though he has the same batting average in winning cases, it appears the insurance companies have no money to pay him or his clients. They claim they're broke.

Odd, this. Considering most of their investments and reserves should be in high rated bonds. And the bond markets are doing great.< See Anecdotes on Construction and Bond Markets - The Fix is in?   on this site.  >

 But Guido suspects over the past few years that these "paragons of financial probity" have gotten a little reckless, and exchanged their Brooks Brother Suits for the latest Boyz outfit.

By now everyone knows about the scandal at AIG. But Guido, for one, has heard not a peep concerning American insurers. My guess, based on what this attorney said, is that other insurance companies may have the same problems as AIG. In other words, Collateralized Debt Obligations and other risky paper instruments, that they had no biz even considering.

But a smiling, fast talking tap dancer of a securities sales person can make us forget our probity. Particularly if they're wearing the right clothes or lack thereof.

Meanwhile, Guido knows this lady from Japan staying in Los Angeles. She doesn't really have any time to spend with Guido because she's too busy fighting AIG.. Basically, she's representing this large estate and going to court next month to recover the beneficiaries assets that AIG refuses to relinquish. It is an interesting, though not amusing tale. Seems some influential political figures in Japan are involved and insisting AIG pay all attorney fees. Even the CIA has stuck it's nose into this. < This is all public record from the court trials in Japan. > . This Japanese lady, who fervently wishes she never took on the case, has told Guido that AIG has seventeen full time attorney's in LA alone.

Well, now maybe US taxpayers know how the Federal government bailout money is being used. Besides AIGs arrogant bonuses, they have to pay all those lawyer bills to contest their fiduciary responsibility. And we know lawyers like to get paid. If you don't know, you'll soon find this out if you need one. < For the record, many attorneys do pro bono work. In other words free services for the poor. Though Americans love to hate the legal profession, it is really the attorneys that kept Bush from turning the country into a complete Fascist state. >

Guido just checked the recent stock market prices of some of these insurance companies. Particularly the causality insurers. They all seem to be up over 50% from their March lows. Does this give you an idea of how "make believe" these markets have become? If these companies can't pay claims already legally decided, they are de facto bankrupt.

Risk is not only high, my friends. It's getting stratospheric.

"Usually the old folks are the easiest to scam. I never really explain what is in the release that they sign" - Anonymous claims adjuster  < When one signs a release form, they basically waive all rights to any future claim with said insurance company. It is almost impossible to overturn in court. Whatever you get prior to the release claim is it. After this, that wonderful smiling insurance representative will literally tell you to drop dead. It is advisable to see a good attorney first before signing anything. >