AIG's failure could be catastrophic!

Last updated on Mar 4, 2009

Posted on Mar 4, 2009

AIG is in trouble….. again!  And its wants fresh induction of money in it to survive.  Its recent results have been terrible.

Another (fourth such bailout) 30 billion dollars have been promised to AIG taking the total commitment to $160 billion.  Worse this is not even the end of the road.  There is more to come.  Many Republicans have been arguing against this bailout suggesting that the Government should let it go.  But all those who say the Government should let AIG go belly up are not necessary the greatest Financial wizards or not the ones to share the downside of the fall – since they arent in the Government anyways.  They are professional career critics.

AIG is not just a simple Financial Institution.  It guarantees the loans of other institutions so that they can function.  All those S&P, Moody ratings.. of AAA or whatever are based on these guarantees.  If you lose that, the chances are no more credit will flow.  Liquidity markets are bad right now.  Wait till AIG goes belly up!  That will END the credit in the market.  Watch this interview with JIm Cramer – an explosive guy but very smart!  He almost suggests that if such a thing happened, the Dow may go down to below 2000 levels!  I don’t think people are getting it!!

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