That is it? Just a flippant answer?
If I am spreading misinformation, which is not my intent, then please correct me so others won’t be mislead by my misinformation.
Please explain the purpose and need for the $85 billion loan, where the money is going to and how much money AIG lost on derivatives.
They thought AIG would only need to raise $40 Billion, then $70 Billion, now $85 Billion? So why did AIG need $85 Billion today or declare bankruptcy tomorrow?
The purpose of the $85bn loan is to facilitate an orderly sale of assets and the dissolution of the company as we know it.
This is NOT a solvency crisis as much as a liquidity crisis. AIG can cover the vast bulk of their obligations IF they have a chance to sell them in the (relatively) normal course of business in arms-length transactions, on a basis beyond firesale.
“Bailout” is not even the proper term for this. The Fed stepped up to easy AIG into oblivion at a workmanlike pace, rather than in a sudden mushroom cloud.