I have a few shares of AIG stock, which is currently trading at 35 cents a share. I do not like to dwell on the pathetic disappearance of this particular asset, so it’s an opportune time to seek comfort in history. This is not the first collapse of a financial empire, nor will it be the last.
The financial products division that brought down AIG rented space at One Curzon Street , a tony part of London. The building, owned by the Abu Dhabi royal family, features elegant curves, polished white stone, sweeping windows and a panoramic atrium. On the street it’s known as the hedge fund hotel. Its tenants include GLG Partners, a once high-flying fund that has fallen on hard times, the struggling Swiss bank UBS, and on the fifth floor, its most famous tenant, AIG.
Nice digs for Joe Cassano and his crew. A great place to gamble with other people’s money and pocket nearly $300 million in personal swag. If you are going to lose half a trillion dollars, you may as well do it in style. The bad news is that tax payers have already ponied up over $200 billion to cover Cassano’s bad bets. The really bad news is that we may eventually be on for more than double that amount!
The Fall of Empires
Joe Cassano, the son of New York City cop, became a financial moghul, hanging his hat in the fanciest building on Curzon street. The street was named, of course, for Lord Curzon, one of the great figures of the Victorian age. Curzon’s fame derived mostly from his time as Viceroy of India. He shot tigers from the backs of elephants, took his afternoon tea on the veranda, and made policy for India’s millions. Like most of the British administrators who ran India, he came away with a substantial personal fortune.
In 1899, India suffered from a terrible famine. The death toll was six to nine million people, give or take a couple million. Among other administrative actions taken during the crisis, Curzon cut back on rations, which he characterized as “dangerously high” and tightened relief eligibility requirements. You know: stiff upper lip and all that. Even as Curzon ruled India with an arrogant hand, a dimunitive Indian national named Mohandas K. Ghandi was organizing fellow Indians in South Africa. Ghandi would eventually lead the movement toward self rule for India, and in doing so, would bring a formal end to the British Empire.
Curzon was born at Kedleston Hall, built on the site where his family, who were of Norman ancestry, had lived since the twelfth century. While at Oxford, he was the inspiration for a piece of doggerel which stuck with him in later life:
My name is George Nathaniel Curzon,
I am a most superior person.
My cheeks are pink, my hair is sleek,
I dine at Blenheim twice a week.
Joe Cassano cannot match Curzon’s pedigree, but he surely lost more money than Curzon ever dreamed of. Joe did his thing and brought down the biggest insurance company in the world. One hundred years from now, other folks, consumed by a similar raw greed, will bring down some corporate entity beyond our current imagining. But one thing is certain. The street where the debacle takes place will not be named Cassano Way.
