It’s tough to watch grown men cry, especially when they are unemotional, conservative bankers. The credit crisis has caused a world-wide financial funeral as bankers and financial execs mourn their careers and any profits they may made have made along the way.

But before we all start to feel bad for them, we need to remind ourselves that these guys got rich off greed and the easy lending practices of the past two decades.

Easy Come, Easy Go

This whole period of financial chaos is merely the greedy getting their just desserts. The latest company to get its serving is American International Group, Inc (AIG). Today, AIG announced a massive loss of $5.36 billion for the 2nd quarter as losses on credit default swaps continue to swell. This number is in stark comparison to the gain of $4.28 billion in the same quarter last year.

Easy come, easy go, I guess.

For so many years, AIG was the shining star in a complex financial world. With some of the brightest minds in the industry, the company crafted a web of transactions that generated billions of dollars in profits.

Unfortunately all the company really did was to build a house of cards that has now come crashing down. In fact, analysts are afraid to call a bottom for the company, citing AIG’s increase in reserves for future losses.

There is no mass sale of all derivative securities here. Instead, the company is betting that such a fire sale would only recover cents on the dollar, when in reality the value of such securities may be higher.

The problem with this scenario is that nobody really knows.

Know When to Fold Them

So how can the average investor determine the proper market value for AIG? Well today, shares are down some 17% alone and now trade for one-third of what they were worth before the credit crisis hit. Is it time for investors to play their cards on AIG?

I’m holding mine close to my vest.

Unlike Merrill Lynch (MER) who decided to take their medicine in full, there may be more ghosts in the closet for AIG. This company is beyond complex. With more quant power than you can shake a stick at, AIG is unbelievably difficult to value–credit crisis or not.

I’m not calling a bottom here.

There is simply no way to know when this storm will end, so therefore I would stay away from AIG for the time being. There are other falling knives to catch with less complexity (see, “Wachovia’s Steel Resolve“).

The company did announce that it raised some $20 billion in capital in attempts to shore up its balance sheet, with no word on the dividend, although with the recent stock price decline, AIG’s dividend yield increases greatly.

Is it safe? I’m not wagering that bet…not yet anyway.

This article was written by Jamie Dlugosch, editor, InvestorPlace.com. For more actionable insights likes this, go to: www.InvestorPlace.com.