billschannel, with video (03:54)from C-SPAN 3:
Rep. Gary Ackerman at House Financial Services subcommittee hearing claims AIG was selling "snake oil" with nothing in the bottle. He tells a funny joke to describe what a "credit default swap" is. 'Two men are in a life boat in the middle of a storm. One man says he is scared so the other one sells him some insurance.' His basic point here is that AIG was selling insurance with nothing to back it up. The people who created these financial instruments called them "swaps" to avoid regulation. If they were called "insurance" they would have been regulated by the government. He also compared credit default swaps to "I can't believe it isn't butter." Hearing was labeled Federal Aid to AIG Insurance. Those being questioned were Joel Ario, National Association of Insurance commissionaers. Rodney Clark from Standard and Poors rating agency. Scott Polakoff Office of Thrift Supervision (OTS).