A report in Thursday's The Wall Street Journal [subscription required] reveals that American International Group (NYSE: AIG) is actually reaping the benefits of its risky bets in the credit-default swap market.

AIG was forced to shell out billions to Wall Street banks amid last year's credit crisis, as the assets backed by the credit-default swaps plummeted in value. However, the market's reversal of fortune means that banking heavyweights, such as Goldman Sachs Group (NYSE: GS), are now returning collateral to the infamous insurance giant.

The American International Group (NYSE: AIG) bonuses controversy took a turn for the bizarre today, when The Financial Times reported that the company had paid $168 million in bonuses and retention payments to 400 employees in the troubled financial products unite between December 2008 and March 2009.

And $7,700 of that amount went to a kitchen assistant.

Look: The point here is not to beat up on "the little guy" and in the grand scheme of AIG's malfeasance, $7,700 to a kitchen assistant isn't that big of a deal.

Allstate Corp. (NYSE: ALL) has selected former American International Group (NYSE: AIG) executive Matthew Winter to head its struggling life insurance and retirement unit, Allstate Financial.

Allstate Financial returned to profitability in the three months ended June 30 after losing money each quarter since September 2007. The unit has been run by an interim president since January. The ongoing delays had prompted some Wall Street analysts to call on Allstate to sell its small life unit, which was largely responsible for investment losses that led Allstate to post a big loss last year.

American International (NYSE: AIG) closed at $48.40. AIG options were active on volume of 380,937 contracts on September 21. October and November call option implied volatility is at 140, puts are at 152; above its 26-week average of 109, according to Track Data, suggesting larger price movement. AIG puts are more expensive than calls because AIG is difficult to borrow.

UltraShort Financials ProShares (NYSE: SKF) is recently down 70 cents to $24.71. SKF is an exchange traded fund seeking daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Financials Index. SKF October call option implied volatility is at 65, puts are at 59, November is at 63; below its 26-week average of 92, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Late Thursday Sirius XM (NASDAQ: SIRI) disclosed it had received a notice from the Nasdaq stock exchange on Tuesday that its share price has closed below $1 for 30 consecutive days, and is therefore not in compliance with the exchange rules. This means it could possibly be delisted.

Sirius has until March 15, 2010, to regain compliance with the minimum bid price rule, meaning its stock has to close at or above $1 for 10 consecutive business days.

Let's dive into the world of breaking news here, as the New York Attorney General's office has decided to mark the one-year anniversary of the financial meltdown by preparing charges against some Bank of America (NYSE: BAC) executives. Reportedly, the charges stem from the failure to disclose details about the company's acquisition of Merrill Lynch.

The Attorney General (Andrew Cuomo) is likely to file charges against the executives because of their failure to alert shareholders to mounting losses and accelerated bonus payments at Merrill. Earlier, a federal district judge rejected a $33-million settlement between BAC and the SEC over the same executive bonuses. This settlement was in relation to the fact that BAC did not inform shareholders of an agreement to pay Merrill Lynch execs billions of dollars worth of bonuses, the deal was struck before BAC acquired Merrill.

It has been about a year since Lehman Brothers failed and this financial crisis started, and it has hit many of the banks hard including Bank of American (NYSE: BAC), Citigroup (NYSE: C) and America International Group (NYSE: AIG).

There has been one thing that has been bugged me in the coverage of it since then. Frequently, reporters use words like unprecedented or unparalleled to describe it. That is false! Financial crises, panics, crashes, bubbles, and bank failures are really about a dime a dozen.

Analyst upgrades:

• Bernstein upgraded Lincoln National (NYSE: LNC) to Outperform from Market Perform based on relative valuation and expectations the company will repay TARP without a capital raise. The firm raised its target to $34 from $26.
• Thomas Weisel upgraded Ticketmaster (NASDAQ: TKTM) to Overweight from Market Weight and raised its target to $12 from $8 citing dynamic ticket pricing and the potential merger with Live Nation (NYSE: LYV).
• Citigroup upgraded Harley-Davidson (NYSE: HOG) to Hold from Sell after channel checks indicated retail sales have improved since Q2. The firm raised its target on shares to $26 from $14.
• McDermott (NYSE: MDR) was upgraded to Outperform from Neutral at Credit Suisse.
• Ericsson (NASDAQ: ERIC) was upgraded to Hold from Sell at Deutsche Bank.
• General Electric (NYSE: GE) was upgraded to Overweight from Neutral at JPMorgan.

Robert Benmosche has been CEO of American International Group (NYSE: AIG) for less than a month, but he's already established a reputation as an arrogant jerk -- which is exactly not what AIG needs at this particular moment in history.

Benmosche drew some sharp criticism for his comment that New York Attorney General Andrew Cuomo "doesn't deserve to be in government" and his comment that he will deal with "all those crazies down in Washington."

Those are pretty ambitious comments given that he and every single AIG employee around the globe literally owe their jobs to an unprecedented episode of taxpayer largesse -- brought to you by, at the expense of much well-deserved populist resentment, those "crazies down in Washington."

Gold usually has an inverse relationship with the dollar. When the USD goes up, gold goes down, because theoretically a stronger dollar can buy more gold. Additionally, commodities in general tend to fall on a stronger dollar because it is often correlated with lower expectations for growth.

This week we saw a major correction in equities with banks leading the way. American International Group, Inc. (NYSE: AIG) was down more than 20% on Tuesday alone. This is a fear-driven decline, and we can see evidence of that in a positive correlation between gold and the dollar.

Bailout coverage has taken on a celebratory tone in recent days as a slew of banks including Goldman Sachs (NYSE: GS) have repaid TARP money, leaving taxpayers with what looks like a handy profit. In addition, equity stakes in Citigroup (NYSE: C) and Bank of America (NYSE: BAC) are sitting on a handsome paper profit.

The only problem is that hundreds of banks have received TARP money. Of course, the most healthy ones are paying it back quickly. The rest are still in limbo, and the result is that the Treasury Department is realizing plenty of gains while all the losses -- investments in companies like American International Group (NYSE: AIG), General Motors, and Chrysler -- remain unrealized and largely ignored.

Analyst upgrades:

• Credit Suisse upgraded Motorola (NYSE: MOT) to Outperform from Neutral after the close Monday. The firm believes Motorola's devices segment will approach breakeven in 2010 while operating margins in nonhandset segments will expand, and that a break-up story will reemerge. Credit Suisse raised its target on shares to $9.50 from $7.
• UBS upgraded BHP Billiton (NYSE: BHP) to Buy from Neutral. The firm cites BHP's leverage to iron ore, coking coal, copper, and oil for its upgrade after raising its commodity price forecasts.
• Merriman upgraded Walter Energy (NYSE: WLT) to Buy from Neutral to reflect higher met coal price forecasts. The firm believes Chinese demand is strong and has a target range of $66-$72 on the stock.
• Intersil (NASDAQ: ISIL) was upgraded to Outperform from Perform at Oppenheimer.
• Coach (NYSE: COH) was upgraded to Buy from Neutral at BofA/Merrill.
• Lockheed Martin (NYSE: LMT) was upgraded to Buy from Hold at Citigroup.

This morning's revised GDP and still high jobless claims were of no concern to the bulls. After a key DJIA component had news, and after interest perked back up in the financial stocks, traders forgot about selling and just started buying all over again. Seven days in a row of an up market is becoming a normal event, it seems.

Here were today's unofficial closing bell levels:

Dow 9,576.47 +32.95 (0.35%)
S&P 500 1,030.91 +2.79 (0.27%)
Nasdaq 2,028.09 +3.66 (0.18%)

Top Analyst Upgrades
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Executive pay czar Kenneth Feinberg could approve the compensation package for income American International Group (NYSE: AIG) CEO Robert Benmosche as soon as next week.

According to The Wall Street Journal (subscription required), "Mr. Benmosche, a former CEO of insurer MetLife Inc., was pressing for a quick resolution in large part to energize AIG employees and show them that AIG employees could be well-compensated, according to people familiar with the matter."

TheStreet.com's Jim Cramer says the bizarre rules these days make it worth looking at stocks through a different lens.

How much should we care about low-dollar speculation? How much should we care about the incessant trading in CIT (NYSE: CIT) (Cramer's Take) and Fannie Mae (NYSE: FNM) (Cramer's Take), Alcatel-Lucent (NYSE: ALU) (Cramer's Take), or Vonage (NYSE: VG) (Cramer's Take) and Sprint (NYSE: S) (Cramer's Take)? Or even Citigroup (NYSE: C) (Cramer's Take)?

First, I have to tell you that I worry about it less than I used to. Why? Because when we used to have rules and government officials that were willing to speak the truth about stocks, we wouldn't have these single-digit players out there every day. But without it, how in heck can people not believe that Fannie and Freddie Mac (NYSE: FRE) (Cramer's Take) are the biggest and best bets on a turn in housing?