Michael Lewis on AIG

Just found this Michael Lewis Vanity Fair article on what, exactly, happened in AIG Financial Products during the housing boom and bust. Goes into detail about what caused the subprime blowup, what institutional factors inside AIG allowed it to happen, and why it was probably AIG FP's fault despite the fact that everyone inside was acting in good faith.

Fun fact: the AIG FP employees invested something like half their income back into AIG. The single guy probably most responsible for the blowup invested almost all of it. Financially, they were all incentivized to look to long-term gains--contrary to the usual narrative about the crash from, well, almost everyone. They just screwed up.

(hat tip Conor Friedersdorf's roundup of 2009's best journalism).