What I believe the Fed is trying to do is unravel this thing in as graceful and orderly manner as possible. AIG will probably cease to exist in the not too distant future.
These people weren’t buying and selling Buicks, they were dealing in hideously complex financial instruments on a global scale.
“they were dealing in hideously complex financial instruments on a global scale.”
I design hideously complex avionics systems. If my company fails, I can I have taxpayer money, too?
They were dealing in extremely risky and unsupported contracts, most of which were probably illegal in the first place. Bad business practices should never be rewarded but the entire financial system is based on fiat currency that can and is created out of thin air.
They were not dealing in proper and sound financial markets. They were shuffling paperwork and money in a grand pyramid and Ponzi scheme. There was no “business” to it.
We need to confiscate all the monies these thieves took, return it to the shareholders, then let the frauds fail. It will do the honest markets a lot of good.