Since I read anywhere from 20 to 100 articles on finance a week I thought it would be a nice addition to the blog to share the best ones here. So in the future I’ll be posting my favourite article from the previous week on Fridays along with some runner-ups if there are many good articles that week.

This week’s article is The Big Takeover by Matt Taibbi in Rolling Stone magazine. Following is a small excerpt and link to the print friendly version of the article. I recommend reading the print friendly version since it’s directly flowing instead of having to continuously load a new page:

I. PATIENT ZERO

The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders — people who wear seat belts and build houses on high ground — and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people’s money would make his dick bigger.

That guy — the Patient Zero of the global economic meltdown — was one Joseph Cassano, the head of a tiny, 400-person unit within the company called AIG Financial Products, or AIGFP. Cassano, a pudgy, balding Brooklyn College grad with beady eyes and way too much forehead, cut his teeth in the Eighties working for Mike Milken, the granddaddy of modern Wall Street debt alchemists. Milken, who pioneered the creative use of junk bonds, relied on messianic genius and a whole array of insider schemes to evade detection while wreaking financial disaster. Cassano, by contrast, was just a greedy little turd with a knack for selective accounting who ran his scam right out in the open, thanks to Washington’s deregulation of the Wall Street casino. “It’s all about the regulatory environment,” says a government source involved with the AIG bailout. “These guys look for holes in the system, for ways they can do trades without government interference. Whatever is unregulated, all the action is going to pile into that.”

Honestly guys (or gals), did you even notice the reference to the article on the cover ?

Related posts from the blog:

• Article of the week (28/2009): Goldman Trading-Code Investment Put at Risk by Theft
• Article of the week (21/2009): Joseph Cassano: the man with the trillion-dollar price on his head
• Article of the week (20/2009): My Personal Credit Crisis
• Article of the week (14/2009): My Manhattan Project
• Article of the week (18/2009): Geithner, Member and Overseer of Finance Club