In Soviet America, insurance buys YOU!
All kidding aside, it looks like someone convinced Bernanke and Paulson that AIG is too big to fail. AIG insures a lot of credit risk for other banks, allowing them to reduce the amount of reserves they are required to have. The insurance is worthless if AIG were to go belly-up and the global finance system might implode as every major bank scrambles to increase their reserves.
The Wall Street Journal is reporting that the federal government is putting in $85-90 BILLION to save AIG. Anyone know where that money is coming from? I mean does the government have that much cash just sitting around? Or are we just borrowing it all from Russia and China?
We’re borrowing it.
If it is down to the US Gooberment, its employees, their pensions and your grandkids being worked like Haitian street dogs on Chinese Food Day, the kids lose.
Good point. We are looking at a Depression if AIG fails.
We already have 100 banks on the watch list.
Bernanke is doing an excellent job keeping the lid on it.