Abstract Badger

The Nationalization of AIG

It seems there can be only one way they will play this out. They pushed marking to market Fannie and Freddie's debt until the end of '09 and now they have pushed AIG's out until the end of '10. It's unpalatable and not in the plan to put FNM's/FRE's debt in the government budget and they will liquidate AIG and never exercise their option for 80% ownership(of the debt most importantly). They simply will have to print/inflate massively in all sections of the economy over the next 2(or n with extensions) years to trivialize this insurance debt with all the global economic consequences that could/will entail. Get in TIPS soon until of course they cancel the program as insolvent!