Maybe this is how to handle AIG

[Mike 03]

Wild idea.

1. The Fed takes over AIG and basically it would cease to exist as its own entity.
2. We locate the most important counterparties who--if they were to fail--would result in the collapse of pension funds and 401ks. In other words, we pick and choose which counterparties to provide restitution to in order to preserve the life savings of innocent victims, but do not honor contracts with irresponsible counterparties.
3. If there are counterparties who are reckless hedge funds or something like that, we invalidate the contract. They get nothing. They are just shit-out-of-luck, and their investors are like Citi investors: This is the sacrifice they make to restore the equilibriium of the world economy by preserving AIG's ability to make good on its most important obligations.
4. No further injections of capital into AIG as an entity.
5. Those successful operations (the "subsidiaries") that AIG does oversee, which ARE functional and of value would be sold off and the revenue returned to taxpayers.

Is that workable?

[MarjorieG]

1. can't help you, but trying to save AIG, banks, is still worthy. We took down the world with our

recklessness and have to act honorably-or they take us down with their control of our debt.