What will pumping $30 billion more into A.I.G. do that the other billions didn't do?

[brentspeak]

There's absolutely no other way to deal with A.I.G. and the systematic risk of it collapsing other than to keep propping it up, over and over again, with mega-billions of dollars?

[leftofthedial]

1. it will keep the bonuses rolling in

and give the masses the illusion that capitalism still works.

[Horse with no Name]

2. You probably don't want the answer to that

:(

[dkf]

3. We're bailing out all those people who bought credit default swaps from AIG

to insure their now worthless bonds.

[stillcool]

4. I don't know...sure looks like..

no one else does either...

Propping Up a House of Cards
http://www.nytimes.com/2009/02/28/business/28nocera.html?_r=1

By JOE NOCERA
Published: February 27, 2009

Next week, perhaps as early as Monday, the American International Group is going to report the largest quarterly loss in history. Rumors suggest it will be around $60 billion, which will affirm, yet again, A.I.G.’s sorry status as the most crippled of all the nation’s wounded financial institutions. The recent quarterly losses suffered by Merrill Lynch and Citigroup — “only” $15.4 billion and $8.3 billion, respectively — pale by comparison

At the same time A.I.G. reveals its loss, the federal government is also likely to announce — yet again! — a new plan to save A.I.G., the third since September. So far the government has thrown $150 billion at the company, in loans, investments and equity injections, to keep it afloat. It has softened the terms it set for the original $85 billion loan it made back in September. To ease the pressure even more, the Federal Reserve actually runs a facility that buys toxic assets that A.I.G. had insured. A.I.G. effectively has been nationalized, with the government owning a hair under 80 percent of the stock. Not that it’s worth very much; A.I.G. shares closed Friday at 42 cents.

Donn Vickrey, who runs the independent research firm Gradient Analytics, predicts that A.I.G. is going to cost taxpayers at least $100 billion more before it finally stabilizes, by which time the company will almost surely have been broken into pieces, with the government owning large chunks of it. A quarter of a trillion dollars, if it comes to that, is an astounding amount of money to hand over to one company to prevent it from going bust. Yet the government feels it has no choice: because of A.I.G.’s dubious business practices during the housing bubble it pretty much has the world’s financial system by the throat.

If we let A.I.G. fail, said Seamus P. McMahon, a banking expert at Booz & Company, other institutions, including pension funds and American and European banks “will face their own capital and liquidity crisis, and we could have a domino effect.” A bailout of A.I.G. is really a bailout of its trading partners — which essentially constitutes the entire Western banking system.

I don’t doubt this bit of conventional wisdom; after the calamity that followed the fall of Lehman Brothers, which was far less enmeshed in the global financial system than A.I.G., who would dare allow the world’s biggest insurer to fail? Who would want to take that risk? But that doesn’t mean we should feel resigned about what is happening at A.I.G. In fact, we should be furious. More than even Citi or Merrill, A.I.G. is ground zero for the practices that led the financial system to ruin.

[OffWithTheirHeads]

5. Uhhmmm, Give me a bonus? That I can live on with my family

for the rest of my life, without ever having to work again? I will make enough money to insure that only the little people will clean my toilets. This is as it should be because I am special and should NEVER have to clean up after myself, just like my hero GW . His daddy fixed everything for him. My daddy will fix it for me, Fuck poor people!

[w4rma]

6. This is the policy of a bunch of DLC Rubinites. It won't do any good for the overall economy. (nt)