AIG reveals the insurance business scam

I heard the question asked today "how could AIG reack up credit defaults losses so great that it threatened the entire world economy?" Simple answer "it is is the insurance business." Insurance companies are not in the business of paying insurance. They are in the business of collecting premiums and making money while paying insurance claims as infrequently as possible. Why is it that people pay premiums religiously year after year and then a storm hits and the insurance company goes belly up? HMMMMMM go figure. Well AIG collected premiums on credit default swaps to insure the purchasers of these mortgage derived securities in case of default. They made enormous sums of money over the past few years but when the defaults began to pile up and claims were made, they company was not able to meet its obligations. Lo and behold in steps the federal government to save the day. Here is the tip. Get in the insurance business and collect premiums as large and as often as you can and then when the sludge hits the fan and your customers are in dire straights you can go out of business. Just make sure you get as much stock and cash in bonuses and salaries as you can and spend it on something of value so they can't get it back from you later. Ever wonder why so wealthy people want to get in the insurance business? Well now you know. Do you think Warren Buffet is in the insurance business because he wants to help people? Maybe, Maybe not but I would guess that the cash cow that come with it is likely the more applicable reason.