You can blame AIG for practically anything these days, be it the collapse of the Roman Empire, your testing positive for dope or the weird look a stray cat gave you walking home, on account of the fact that said pussy is inhabited by the spirit of Hank Greenberg. The latest is the foreclosure of the St. Regis Monarch Beach, whose owners defaulted on a $70 million loan from Citigroup Global Markets Realty Group. Unless some white knight rides in to the rescue (be it on horse or Zamboni), the place is going to auction on July 7. Where did things go wrong? Well, there's the whole "economy" situation, but that's just noise. This thing can be blamed squarely on a certain insurer's penchant for manicures, pedicures, and $200,000 worth of facials.
The St. Regis became something of an emblem of corporate excess and greed last October, as the global financial system was threatening to melt down.
The taint arrived by association with AIG, the giant New York insurer that, because of massive wrong-way bets on the mortgage markets, became the largest recipient of bailout money from the federal government.
The event was widely vilified and lampooned, and bookings at the St. Regis dropped by 20% in the months following it, St. Regis marketing director Michael Mustafa told Hotels Magazine. By Mustafa's estimate, about a third of the drop-off was attributable to what the magazine termed the "AIG curse."