Duude

Why Would Treasury Cut AIG's Interest Payment?

There is an inconsistency with the terms offered AIG versus Bear Stearns, versus Lehman Brothers versus the remaining banking institutions. I think I understand how the Treasury settled on the various terms, but the reasoning had more about timing than the health of the company. Additionally, Congress has already agreed to make loans to the Automobile industry at very favorable terms. How can we compare AIG's deal to that offered the automobile industry? Its conceivable AIG may survive with terms such as offered the automobile industry. But it isn't likely the automobile industry will survive without a continuous stream of cash infusions for as far as the eye can see. Their business model is broken and unlikely to be repaired as union members have an ally in the Congress, and the next administration.