Updated: Read these chilling words from Paul Kedrosky’s Infectious Greed to get a sense of the enormity of the AIG problem. You can read the rest of his post here.
Take your second deep breath of the week. We are at a cusp tonight, with a Treasury deal apparently on the table to provide a $80b bridge loan to doombound insurance company AIG. It seems clear that were that not to happen tonight then AIG would file for bankruptcy tomorrow, and that would have immense and unknowable consequences.
From Barry Ritholtz at The Big Picture:
Too big to fail? So much for no taxpayer bailouts. I hope there are lots of Congressional hearings, reports, studies and some public hangings that we can sear into our brains the next time we decide to actually believe our government.
From Bloomberg:
The U.S. Treasury is considering taking over American International Group Inc. under a conservatorship as one option to address the insurer’s crisis, according to two people briefed on the discussions.
Executives from AIG, bankers and Treasury and Federal Reserve officials are meeting today on the company’s situation at the New York Fed. A number of options are under being discussed to fill a shortfall of $75 billion to $100 billion in funding, one of the people said. The talks are continuing, he said.
Goldman Sachs Group Inc. and JPMorgan Chase & Co., which have been leading efforts to find a private-sector solution, informed the Fed that such an effort would be difficult, the person said. Under another option, the Fed would extend a loan to New York-based AIG, according to a person informed of the matter.
Last 3 posts by Morgan
- Subprime Bananas - June 28th, 2009
- Roubini: No confidence in government exit strategy - June 24th, 2009
- Goldman bonuses largest in firm's 140-year history - June 21st, 2009
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