[kenavi]

Bailing out a giant insurer is about as politically popular as putting a tax on ice cream.

That two Administrations as different as the Bush Administration and the Obama Administration did this nonetheless, catching hell for it, indicates a purpose other than some secret arrangement like "money-laundering" as you charge them with.

I believe the underlying reason is that aside from all the securitized debt crap they guaranteed, AIG is also one of the largest guarantors of municipal debt in the U.S., which is traditionally held by and for mom and pop investors looking for safety.

Your preferred solution of Chapter 11, by the way, wouldn't accomplish your aim of punishing foreign holders of U.S. obligations, U.S. bankruptcy code doesn't distinguish creditors by nationality.