AIG has blown through $90 billion of the $123 billion that the government gave…oops, I mean “loaned” them (like we’re ever going to see that money paid back), in a month. Even for Wall Street that is an impressive burn rate. So what were they doing? Nothing more than rolling the dice and losing in the world’s biggest casino:
AIG has borrowed $90.3 billion from the Federal Reserve’s credit line as of yesterday, the bulk of it to pay off bad bets the company made in guaranteeing other firms’ risky mortgage investments.
Yep, that’s it, they weren’t producing anything, they weren’t lending money for production, they were merely counter-parties in huge, unregulated bets made by hedge funds and Wall Street investment firms.
Oh…and did I mention that if they go down, the whole financial system will implode?