Jason Rines (iThinkBig)

AIG: Paulson's Folly

Liquidity creates bad habits in management at all levels, private and public sector. In a free for all deflation, best for mass bankruptcies to emerge and assets sold at pennies on the dollar and liabilities shed.

In AIG's case holding a large albatross of CDO's, all obligations should be restructured in banruptcy court.

That of course would upset a lot of nations. But that is part of investing, you can win and you can lose. Why should the American citizenship subsidize the failures for the entire globe? How about all of those investors return there profits, those at the top of the giant pyramid scheme? No? Then all investors take there losses globally and the globe isolates those that hatched the pyramid scheme and if nothing else make sure these people never have a job in the financial sector - EVER.

The citizenship will take matters into there own hands at some point regardless of government being retroactive in dealing with this. If the American government must pick winners and losers, perhaps it is better to start deciding that the American citizenship is in the winners camp.