The saga at AIG just gets more and more pathetic; the government is repeating the same pattern (Sep 16, 2008: Federal Reserve Considering Loan Package to AIG) - when they swoop in to rescue they claim losses will be limited, it's a long term "investment" and "heck we may even make money in the end". They said we'd be limited to $200 Billion in commitments "worst case" with FranFredron - already Freddie has come to the trough twice and Fannie is on its way.... now we go on with AIG. (Nov 9, 2008: AIG Needing More of Your Grandkids Money) My initial cynicism towards the "cost" of the AIG bailout has been more than justified - it started as $85 Billion, and before today had grown to $150 Billion.

As is typical with government the initial number floated is only a fraction of the final cost. Based on how involved AIG (AIG) is with the credit default swap market I don't even think $85 billion... err, $123 billion... err $150 billion will be sufficient.

.....the case of AIG is getting to be so egregious I want it in front of readers eyeballs. Why this sham of an "ongoing concern" is allowed to live, and suck off our money is a joke; we're going to take a loss on this deal so just take it over fully, sell it off piece by piece and hope that what we sell off pays off 20 cents on the dollar for the liabilities we are on the hook for. Throwing bad money after good is useless - we're subsidizing a zombie.

The sick thing is the original bailout, as reported by Bloomberg, was basically a payoff to Goldman Sachs (GS) and Morgan Stanley (MS) - i.e. direct transfer of taxpayer dollars to those firms (via conduit called AIG) - you really should read this one if you are a newer reader (Oct 17: Your Tax Money Paid to Investment Banks and Hedge Funds via AIG)

Oh but we're not done yet - the absurdity of this all is much like Citi we are going to get common shares! (yee haw!) in return for our money! Joyous! Shares in what would be a stock worth $0 in return for taking on the risk of propping up said entity.