Is AIG 1 Year CDS A Seller's Dream?

Reader Mike points out an interesting potential selling opportunity in AIG 1 Yr CDS, which is trading on one of the most inverted curves in CDS land. As a collapse of AIG would be equivalent to the blasphemous "credit event" of U.S. Sovereign CDS, having to pay for the settlement on 1 years in AIG seems like an oddly armageddonesque prospect. Yet unlike buying US CDS, an account selling AIG protection picks up nice solid carry assuming the world doesn't end, and if the worst happens and AIG folds, there will likely be nobody left to collect on the default and the seller can quietly tiptoe out off the trading floor into the nearest version of McFadzen's.

"We all know how dangerous it is these days to believe that the worst wont happen, and I understand all the issues around ratings-based collateral calls after the AIG mess. But with $36 bn in cash, $20 bn in marketable securities, $98 bn of access to the CPPF, $70 bn of access to the TGLP, $34 bn in tangible equity and a TCE ratio of 5.3% that any bank would die to have......why are people buying default protection for 1 yr at 15% (other than those told "hedge or be fired" on some correlation desk)? What is the catalyst for the implosion people are fearing here? Are people seeing AIG demons when maybe they shouldn't be?"