Buying AIG is likely going to be a good deal for the tax payer.
It was an $85B 79.9% convertable preferred at 12% and subs all the debt. The Treasury can dump all the paper back on the counterparties and sell off the insurance companies at a profit. If I had $85B and power to sub the debt. I would do this deal also.
It is a great trade.
Saving MSH, GSH, and MER or allowing them to merge with FDIC insured entities is a huge mistake and probably a NYC area jobs bill.
The USA now has its own sovereign fund (sort of) to fight deliberate destabalization efforts.
(ala currency manipulators)
Sounds good, but what happens to the money once it hits back in the Treasury? Who will manage it? Will it be spent on what or used to pay off the national debt,what is mandated?
Most of this is admittedly over my head and one of the reasons I like the see govt. out of the business of business.