AIG may still be too big for government to let it fail

AIG is the king of derivatives. Credit Default Swaps were their specialty. Lehman's failure caused turmoil, AIG's would cause Armeggedon. AIG is the U.S. taxpayer's black hole. Too big to fail is an understatement.-Lou

AIG may still be too big for government to let it fail

.............If AIG collapses, counterparties including several major European financial institutions could be left waiting to be repaid along with other creditors in bankruptcy. Such a scenario could bring the financial system to its knees as nearly happened when Lehman Brother collapsed in September.

"The Federal government is maintaining a life support system for AIG," said Sean Egan, president of Egan-Jones Ratings, a rating agency that's paid by investors rather than investors. "If they pull the plug, they are dead. We don't want that to happen yet."

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